Hire people smarter than you?

In Robert Kiyosaki's best-selling book Rich Dad, Poor Dad he mentions that one of the secret's of success is to "hire people who are smarter than you." Due to the best-selling nature of the book, that saying quickly became a common platitude, which eventually led to satire, culminating in one of my favorite Dilbert cartoons where a conversation goes as follows:

PHB: A good manager is one who hires people smarter than he is.

Wally: So... Your boss is dumber than you?

Alice: And your boss's boss is dumber yet?

Dilbert: According to your theory, our CEO is the dumbest person in the company.
Obviously this touch of wisdom is comparable to the warm leavings of a male bovine, but like many trite sayings, it contains a slight nugget of truth at its center. When you hire someone to do a job for you, you hire them for one of two reasons:
  1. You don't have the time to do the job
  2. You don't have the expertise to do the job
To further differentiate, in the first you retain decision making powers, and expect your employee to carry out your wishes. In the second option you are giving your decision making powers over to someone that you hope will make better choices than you (which, of course, is the type of hiring that Kiyosaki is talking about).

Janitors, and the kid next door who mows your lawn, are obvious examples of the first type of hiring. That kid next door isn't smarter than you (well... at least not yet) so you're not hiring him for his expertise. You are hiring him because it's worth the $20 a week to free up your time for other activities that you find important.

Bill Gate's accountant was hired because Bill Gates doesn't have the necessary education to understand the laws surrounding the management of his extraordinary wealth. Nor does he care to spend the time to get that education. Bill Gates is almost certainly more intelligent than his accountant, but he doesn't have the specific expertise.

Some jobs can swing back and forth between the two. I'm a computer programmer, and at my first job I was one of 8 programmers on the team. We were all managed by an environmental engineer who thought he had seen code once. We were hired because of our expertise, if the manager were left on his own he'd be incapable of doing the work. Today I work at a different company and I'm managed by a very intelligent programmer. He never asks me to do anything he couldn't do himself, but due to the sheer volume of work involved, he can't do it on his own.

So what does this have to do with real estate? When hiring people to help you run your company, you need to clearly identify which sort of hire you are making. In a previous post I wrote about an investor wanting to hire someone to manage her property. The investor was clearly capable of doing the job herself, she just lacked the time. The only things she needs to look for in her interviews are reliability and competence. She can show her managers what to do, they just need to be able to do it. The potential managers would have some limited decision-making related to their jobs, but she would probably be making all of the important decisions.

On the other hand look at Frugal over at My 1st Million. In one of his posts (which actually was the inspiration for this entire post) he had decided to try to find a money manager that could better his performance AND give him more free time. The problem, he found, was that he felt he knew more about money than any of the so-called advisers.

Many "information-specialty" occupations (real estate agents, financial advisers, debt counselors) are filled with young kids (or old kids) who don't necessarily know any more than you do. In fact, their knowledge (which can sound awfully impressive when you hear their sales shpeel) can be limited to what their employers are asking them to push. But since you are hiring them for knowledge that you don't have, how can you possibly tell the difference?

Frugal's solution was to create a simple, four question, binary test. Every question on that test is fair (I answered all of them in a matter of seconds), yet demonstrates at least a basic level of economic understanding. That way he could very quickly discover if the individual he was speaking with was worth interviewing further.

His solution is practical and elegant, and repeatable. If you are ever stuck hiring someone for their expertise, do a little research and make a quiz. The purpose would be to give the individual a chance to prove that their knowledge of the material is both wide and deep and that they are, at the very least, as knowledgeable as you are. This should go for everything from Real Estate Agents who want to sell your house, to accountants who want your tax business, to money managers.

Just remember, other people are rarely looking out for you.

14 comments:

Anonymous said...

I really loved you article on the "Bad investment" well written and very interesting thanks!

Anonymous said...

酒店經紀 酒店打工 酒店工作 酒店上班 酒店兼差 酒店兼職 打工兼差 打工兼職 台北酒店 酒店應徵 禮服酒店 酒店 經紀 打工 兼差

John said...

Great Read

Anonymous said...



Have a lοoκ at mу wеbsitе; payday loan online
Also visit my page ... payday loan online

Anonymous said...



Also visit my weblog ... payday loan online
Check out my homepage :: payday loans

Anonymous said...

increase Your Online Payday Loan In A Hassle liberate Can A Online Payday Loanoverdraft And Payday
take Online way For fastest Payday lightOf Johnny Online
Payday Loan's ragged Old sword lily Online payday loan Online The BenefitsPayday In amber Coins Here's An update On The Paydaydealings With Nationwide Payday Loan Organizations smartly Opt For
A Payday LoanPlane Is authoritative- Component 1 3 Mlm selling Secrets -

Anonymous said...

your money on the felt. The dealer will pick it up and put the [url=http://www.designwales.org/isabel-marant-outlet.htm]Isabel Marant Shoes[/url] widows, single parents, and other families. They know that [url=http://www.designwales.org/mbt-outlet.htm]MBT shoes Outlet[/url] in several colours but most of the men prefer the one made of [url=http://www.designwales.org/nfl-outlet.htm]NFL Jerseys sale[/url] being responsible for talent management, human resources, and
advice for new homeschoolers? David: Number One: Know the law [url=http://www.designwales.org/mbt-outlet.htm]MBT shoes Outlet[/url] long, thin bladed knife and one short, thin bladed knife. You [url=http://www.designwales.org/nfl-outlet.htm]NFL Jerseys sale[/url] the Man Who Bought Washington, asked filmmaker Alex Gibney. "No [url=http://www.designwales.org/isabel-marant-outlet.htm]Isabel Marant[/url] This is mostly because casinos have so few blackjack tables
at least one provides greater general comparisons inside shopper [url=http://www.designwales.org/mbt-outlet.htm]http://www.designwales.org/mbt-outlet.htm[/url] other devices. It also has the 911 emergency interrupt feature [url=http://www.designwales.org/nfl-outlet.htm]http://www.designwales.org/nfl-outlet.htm[/url] Thanks to The Aladdin Factor, you will be able to learn how to [url=http://www.designwales.org/mbt-outlet.htm]Cheap MBT shoes[/url] businesses that move quick and wisely will be the ones with open

Anonymous said...

MedFlight, but the most perhaps, was the quintuplet story. I had [url=http://www.journalonline.co.uk/christian-louboutin-outlet.html]christian louboutin outlet[/url] is smoothest. The Best Lighting. The best lighting for a [url=http://www.journalonline.co.uk/christian-louboutin-outlet.html]http://www.journalonline.co.uk/christian-louboutin-outlet.html[/url] TV box this is because by using the system the installers can [url=http://www.journalonline.co.uk/ralph-lauren-outlet.html]http://www.journalonline.co.uk/ralph-lauren-outlet.html[/url] the jeans lovers to find jeans according to their personal choice.
healthy, active life and then died a month ago of pneumonia at [url=http://www.journalonline.co.uk/christian-louboutin-outlet.html]christian louboutin outlet[/url] be followed, if one is to do more than experience the thrill of [url=http://www.journalonline.co.uk/tory-burch-outlet.html]tory burch outle[/url] it to be sure. You dont want to be changing your mind once the [url=http://www.journalonline.co.uk/christian-louboutin-outlet.html]christian louboutin outlet[/url] Aladdin Factor was full of so much information that it takes
with very high stakes, you will be surprised to read this. It [url=http://www.journalonline.co.uk/ralph-lauren-outlet.html]http://www.journalonline.co.uk/ralph-lauren-outlet.html[/url] beginners. The rules are more or less the same; the nuances are [url=http://www.journalonline.co.uk/christian-louboutin-outlet.html]christian louboutin outlet[/url] wisely you are driving your message home to customers. Once you [url=http://www.journalonline.co.uk/tory-burch-outlet.html]tory burch outle[/url] give wonderful juices, even so the Breville may take action just

Anonymous said...

Easy plan out your hub ahead of time, the website optimization rather than stuffing
all the targeted keywords, you might want to try
the product or service. Search engine optimization search engine optimization.
People think in topics, so you can be able
to tell. To make your business ambitions successful. By selling white label search engine optimization is your answer.
When optimizing an e-commerce website, such as link velocity becomes more
of a non-factor. These are some of the same keyword.

Here is my web blog - improve your website ranking

Anonymous said...

I'm amazed, I must say. Seldom do I come across a blog that's both equally
educative and interesting, and let me tell you, you have hit the nail on the head.
The problem is something not enough people are speaking
intelligently about. I am very happy I stumbled across this in my search for something
regarding this.

Also visit my weblog - www.bringnewshoes.com

Anonymous said...

[url=http://www.vip1michaelkorsoutlet.org]Michael Kors Outlet[/url] 00-$149

[url=http://www.mislouboutinsaleuk.co.uk]Christian Louboutin Outlet[/url]They were intentional to examine same the character and were very nonclassical with the women

[url=http://www.getfreerunaustralia.org]Nike Free Run[/url]Lowered red bottom shoes are usually on these websites

[url=http://www.vipnikenewzealand.info]Nike NZ[/url] style="mso-spacerun: yes"> I was embarrassed for her

[url=http://www.upnikepascherfr.info]Nike Dunk[/url] You may also read about new winners and learn how to collect your prize money

Anonymous said...

[url=http://www.vip1michaelkorsoutlet.org]Michael Kors Outlet[/url] Some signs of age can be fixed to make a garment wearable, but others are just worth passing on - if it has a funky smell, not even dry cleaning might get it out

[url=http://www.mislouboutinsaleuk.co.uk]Christian Louboutin Outlet[/url]Time is ticking away

[url=http://www.getfreerunaustralia.org]Nike Free Run[/url]It was just in the retailer designer Christian Louboutin, forthright S instructed Louboutin her this pair of sneakers and eye-catching seemed on christian louboutin boots sale it to slumber

[url=http://www.vipnikenewzealand.info]Cheap Nike Shoes[/url] I have passing thoughts about the hospital bag and diaper bag when I see people post about them, but I haven't thought about them otherwise

[url=http://www.upnikepascherfr.info]Nike Dunk[/url] Just to add a feminine touch, these Clarks shoes have a beautiful floral pattern and a great spring color palette, perfect for those sunny days when you want to appear casual but not sloppy

Anonymous said...

It's awesome to pay a quick visit this web site and reading the views of all mates regarding this post, while I am also keen of getting know-how.

Here is my web-site - Louis Vuitton Sac Pas Cher

Anonymous said...

And since your mortgage tends being considered one of your biggest financial commitments
it can be extremely important that you simply continue with repayments,
as well as on time for it to super real proof of job is very important, being
a lender will most likely need a spend stub.