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When you find a fabulous person, hire him (or her)... then figure out where they fit later.

We advocate the need to go beyond training and development because we recognise that neither is enough and each has its characteristic limitations. Development is too open, training not open enough. Training cannot cope with a world of uncertainty, while development may accept it to the point of giving no guidance in how to shape the world. Training cannot deal with a high degree of complexity: development does too little to bring order to complexity.

The different priorities that employees have can be described by the acronym MORE - Money, Opportunity, Respect, Experience

We've heard that old refrain before: Our schools would be better if only we had better teachers, and government would be better if only there were more competent civil servants. In fact, such conventional wisdom is more often than not a rationalization for poor leadership. Because the top 10 percent of any group is a finite number, it is incumbent on leaders to create conditions that produce extraordinary results from ordinary people. From that perspective, a company that creates talent and uses it well is better led than one that expends all its energy on the futile task of hiring only great people.

People who don't share our values are cancerous to the organization, regardless of their performance. In my experience, every time you invest trying to save these people you end up regretting it. It's simply too difficult to change people's values.

For a complete set of career resources check out our Career Center

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The job hunt is still basically done in the same way as it was done 30 years ago, despite all of the technological changes. For "Parachute", I created a diagram called "Our Neanderthal Job-Hunting System." It's a large pyramid, segmented by different job-hunting techniques. Employers start at the bottom of that pyramid. They try to fill vacancies by looking internally and hiring from within. Only after that do they go up the pyramid to other methods, such as contacts, employment agencies, unsolicited résumés, and ads. But the job hunter takes exactly the opposite direction -- exactly the opposite! The job hunter starts by mailing résumés and looking through ads, and only then moves down the pyramid to the strategies that employers prefer. The job hunt hasn't changed one whit in 30 years. It's just as Neanderthal today as it was then.

It's the worst thing in the world, the layoff. You shouldn't have a manager in your company that enjoys doing it. But you shouldn't have one there that can't do it.

Note: Business 2.0 is now part of CNNmoney and some older articles are no longer available

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Some companies that have lived through the free fall of their market value have learned to reprice with the frequency of a fat man visiting the refrigerator. It's always defended as a way to keep employees, yet no one ever seems to ask: If they feel entitled to share so lavishly in the upside yet not bear any responsibility for the downside, do you think maybe we've got the wrong employees? What seems to be forgotten here is that stock options are by their very nature speculative; if they were meant to be guaranteed, why not hand every new hire a fat, juicy check for deigning to occupy one of your cubicles?

So let's try some logic, Ms. CEO: Nasdaq tumbles. Your stock goes down. If market conditions are to blame, so does everyone else's stock. If you're worried that all the talent will flee, the company across the street is probably worried too. So why not just hire all of its panicky, selfish, greed-motivated employees to replace your own?

In interviewing potential hires, I look for passion first. Second, interpersonal sensitivity. Do they listen? Do they display a care and respect for other people and their points of view? Third, a willingness to articulate a point of view. I don't care whether it's right or wrong, but they do need to have one. Skills come after that. Always. You can always teach people the skills they need, but if they are a schmuck, they're a schmuck.

For a complete set of career resources check out our Career Center

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Experts generally agree that four traits are essential to predicting how a person will perform. Those traits are dominance, extroversion, pace (or patience), and conformity. If you understand which of those traits is most salient and how the other three factor in, you can identify the kinds of environments where a person will thrive. The logic works the other way too: If you can figure out which trait profile is right for a job and then hire people with that trait, you'll avoid a lot of frustration.

People from the military have a higher internal drive for excellence. We see that they're self-policing. They have less of a disposition to blame outside events or organizational issues for lack of success. They typically are self-driven and have a higher moral compass, as well. In military terms, given a mission, they set out to achieve it without a whole lot of oversight.

Developing and promoting internal talent who are already performing successfully within a company's unique culture is preferable to hit-or-miss recruiting of senior executives from the outside. For one thing, success in senior positions depends on whether a new leader is accepted by his or her peers; so many external candidates fail because the culture rejects them. For another, promotions send a signal that an organization values its current cadre of managers. Yet, too often, companies overlook the talent within their ranks and seek a savior from outside.

[When hiring] I look for character, intelligence and work ethic. And if I screw up on the first one, I pray they're dumb and lazy.

Traditionally in human resources, we ask: "Have you done this work before? How long? Where did you do it? Where did you go to school?" But these questions just scratch the surface. They overlook talent. And people who lack the core talents needed for success in a role are never going to achieve and sustain superior levels of performance; they're never going to grow at an exponential rate. But if you're able to select someone who has the right talents, as well as useful experience and the right educational background, that would be the complete package.

Gallup's studies show that if you could select someone with talent, you could teach him or her the nuts and bolts of the position. Very soon, this person will start to outperform those who have tenure or experience in that industry but don't have the right talents, and after a while, you'll see that the person you hired just outperforms like crazy.

Organizations that want to increase employee engagement need a performance management system that is geared toward developing it. Giving people more opportunities to learn can play a part, but companies must manage all the dimensions that drive engagement, not focus on just one.

The world's best companies recognize that employees flourish when they are placed in roles that play to their talents. Thus, organizations should not try to "bestow talents" on their employees; instead, they should work to maximize the greatest talents within those individuals. To become world-class, companies must first focus on selecting the right employees into each role -- then on helping them develop into excellent performers in those roles.

We grow because you can't otherwise provide an opportunity for talent. You have to provide that, or else change your view of who your talent should be.

By focusing on the end points of managing talent (acquisition and retention) rather than on the middle ones (deployment and development), organizations ignore the things that matter most to employees. When this happens, companies set themselves up for inevitable churn, which becomes especially hazardous in a tight labor market.

...Rather than focus on metrics and outcomes ("acquisition" and "retention"), they must concentrate on the things that employees care about most: developing in ways that stretch their capabilities, deploying onto work that engages their heads and hearts, and connecting to the people who will help them achieve their objectives. By focusing on these three things, attraction and retention largely take care of themselves.

It isn't surprising that most organizations hold people to the confines of their resumes. It is risky to hire or reassign people based on their potential, rather than their experience. But inviting talented people to explore their options is not as risky or costly as paying them when they're disengaged, or losing them altogether to the competition.

It is not unusual for people to try on different roles before they find the one (or two, or three) for which they are best suited. For every airline pilot or doctor who knows his or her passion at nine years old, there are likely more who are still trying to figure it out at 30. Indeed, interests and goals may shift over time. But by and large, people don't find the right fit until they "taste, touch, and feel" it.

Managers manage what they can measure--and they find it hard to measure people. While they can calculate payroll expenses, they typically don't have the tools to determine causal relationships: why valued employees really leave, what happens when new staff are promoted rapidly, how training influences productivity. And when economic pressures dictate that labor costs should be adjusted to business realities, many managers don't know when they are discarding valuable knowledge assets rather than simply cutting costs. Absent the facts, managers are hard-pressed to apply systems thinking to the management of human capital. They've had to make such decisions piecemeal, with little sense of their broader impact and the economic tradeoffs involved.

The biggest challenge for many great front-line managers may be using their employees' talents as the basis of building strengths in an organization that is fixated on correcting talent weaknesses.

Few great men could pass personnel.

We must hold people in the same role accountable for the same performance outcomes but challenge each person to reach these outcomes by capitalizing on his unique talents. We must teach managers how to distinguish between talents -- which cannot be transferred from one person to another -- and skills and knowledge, which can. We must build performance management systems that label a person's talents his "areas for development" and that encourage him to "work on" strengthening his talents with the relevant skills and knowledge. And we must stop promoting people out of their areas of talent, and instead build alternative career paths that encourage them to grow within their areas of greatest talent.

One popular reason for giving equity is "We want people thinking like owners." But think again. Most employees don't want to think like owners; otherwise, they'd be out there starting companies...We say, "think like an owner" when we mean, "be cost-conscious." And equity is supposed to do that?

Companies also fail to realize that the really talented people don't fear turnover. What drives them out is the toleration of mediocrity. If you tolerate mediocrity in your organization and then claim to be the best, I can tell you right now you're not. And if you look at those who are the best at what they do, their turnover rates are generally somewhat lower.

A simple test: Who does your company's vice president of human resources report to? If it's the CFO -- and chances are good it is -- then HR is headed in the wrong direction.

For a complete set of career resources check out our Career Center

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In 1969, in his book, The Peter Principle, Laurence Peter warned us that if we followed this path without question, we would wind up promoting each person to his level of incompetence. It was true then. It is true now. But, unfortunately, in the intervening years, we haven't succeeded in changing very much. We still think that the most creative way to reward excellence in a role is to promote the person out of it. We still tie pay, perks and titles to a rung on the ladder: the higher the rung, the greater the pay, the better the perks, the grander the title. Every signal we send tells the employee to look onward and upward. "Don't stay in your current role for too long," we advise. "It looks bad on the resume. Keep pressing, pushing, stretching to take that next step. It's the only way to get ahead. It's the only way to get respect."

These signals, although well intended, place every employee in an extremely precarious position. To earn respect, he knows he must climb. And as he takes each step, he sees that the company is burning the rungs behind him. He cannot retrace his steps, not without being tarred with the failure brush. So he continues his blind, breathless climb to the top, and, sooner or later, he overreaches. Sooner or later, he steps into the wrong role. And there he is trapped. Unwilling to go back, unable to climb up, he clings onto his rung until, finally, the company pushes him off.

We are all spiritual beings. To unleash the whole capability of the individual -- mind, body, and spirit -- gives enormous power to the organization. This has nothing to do with religion. People of many faiths, or no faith at all for that matter, can join together in a common cause of service to others through their work.

Note: Business 2.0 is now part of CNNmoney and some older articles are no longer available

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People are not your most important asset; the right people are.

Note: Business 2.0 is now part of CNNmoney and some older articles are no longer available

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Give people responsibilities, not jobs.

Empowerment can be abandonment when employees are given responsibility without guidance or training. A vice president who suddenly shows up one day and tells his plant manager that he will have sign-off authority for $1 million instead of the $5,000 he formerly had isn't empowering his employee, he's setting him up to fail.