The flaws in how we select experts

Organizations scour the earth — or LinkedIn — for the talent or perfect expert to provide that fresh edge and perspective needed to overcome the obstacles to greatness.

It turns out that maybe they’re looking too far afield. Perhaps the guy who can see around that corner is sitting right there.

Many of us can think of a time we shared an idea with a boss, superior or even a loved one, only to be brushed off. It’s all too common.

And in the worst-case scenario, suggestions are ignored initially but implemented later — with much fanfare — only when presented by an outsider or highly paid expert. Why are these outsiders perceived to be more credible? One reason may be their anonymity.

The degree to which we know and trust someone should enhance his or her credibility. Unfortunately, it often doesn’t work that way. In the words of Mark Twain, “An expert is an ordinary fellow from another town.”

Dan Ariely, a Duke University professor and noted researcher on irrational behavior, said this bias is real: “Often, people give more benefit of the doubt to people who are coming from the outside.”

He points to studies he has conducted on online dating. Participants were remarkably optimistic in their view of strangers. Because people know little about a dating prospect, Ariely discovered, they interpreted that relational ambiguity in pretty much any way they wanted to.

In another study Ariely conducted on chief executive salaries, he found that CEOs who come from the outside tend to land higher pay compared with CEOs elevated from the inside.

So are CEOs from the outside consistently more qualified than inside candidates? Are they more devoted to the company? Not exactly.

Matthew Bidwell, assistant professor at the University of Pennsylvania’s Wharton School, has insight on that.

He discovered that while external hires are paid up to 20 percent more, their performance reviews were worse than those of their internal counterparts, according to his study in the journal Administrative Science Quarterly.

To add insult to injury, these highly paid outsiders were 21 percent more likely to ditch the company that paid so handsomely and were 61 percent more likely to be laid off or fired.

Why do we make this error again and again? Why do we pay for lesser advice from unknown outsiders? Francesca Gino, a professor at Harvard Business School and author of “Sidetracked,” has an explanation.

“When you pay for advice, whether it’s from a doctor, lawyer or business consultant, you can be confident that you are accessing expert information,” Gino said. “Yet my research shows that we are not especially focused on the quality of the advice for which we pay. Rather, the cost of the advice weighs more heavily in our decisions, even when free advice is of the same quality.”

How does the old saying go? You get what you pay for — or at least you believe you do.

I’m not saying hiring outsiders is always a bad idea, but ignoring internal talent is a tremendous waste of an investment already made.

Many leaders or teams believe their biggest challenge is simply finding that one genius with all the answers, but that groundbreaking hero could very well already be in your midst.

• Justin Brady founded the Iowa Creativity Summit and lives in Des Moines, where he owns Test of Time Design. Contact: j@justinbrady.me

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