Organizations constantly scour the earth for talent that will provide the fresh edge needed to overcome the challenging obstacles that stand in their way to the top. In their pursuit of excellence, however, would you be surprised to learn the criteria they use to define expertise is flawed? It’s called The Nazareth Factor and it severely damages our judgment.
Anonymity Increases Credibility
Many of us can think of a time we made a recommendation to a boss, superior, or family member only to be brushed off—almost 25 percent of workers are ignored at work. What really makes the blood boil is when suggestions are ignored but implemented later — with much fanfare — when presented by a highly paid expert. Why are these recommendations perceived as bad ideas when suggested by employees, but suddenly brilliant when a lesser-known individual suggests the same thing? Why are these outsiders perceived to be more credible? As nutty as it sounds, it might be due to their anonymity.
If this sounds irrational, I agree. The degree to which we know and trust someone should enhance their credibility, after all, internal folks should have an intimate understanding of our challenges. Unfortunately, the scenario doesn’t often play out that way. Instead, distant individuals are the ones perceived as more credible. Those close to us are “meh.” In the words of Mark Twain, “an expert is an ordinary fellow from another town.”
Duke professor and two-time New York Times best-selling author Dan Ariely, is a noted researcher on irrational behavior and I asked him if this bizarre phenomenon was real. Not only did he confirm its existence, but he points to the underlying reason it exists. “Often, people give more benefit of the doubt to people who are coming from the outside.” Evidence for this phenomenon can be found in Ariely’s studies in online dating, of all things.
Ariely explained he observed the way online dating users narrowed down factual options. Instead of being cynical about others, participants were remarkably optimistic in their view of complete strangers. Because they knew little about a person, they interpreted that relational ambiguity in a positive light. For example, if someone were to tell their potential date they liked music, the potential match would likely assume their interests were similar, instead of stopping to think that perhaps their music preference would be repulsive. “When people know little about a person, they appreciate them in a higher degree,” Ariely said. This problem scales up beyond online dating.
Ariely conducted another study on salaries given to chief executives. It showed a trend that CEOs who come from the outside tend to get higher figures compared to CEOs hired from the inside. “People have more faith and trust in CEOs hired from the outside,” Ariely said. “In fact they prefer them.” Is this because externally hired CEOs do better than ones hired internally? Actually, no.
External hires are more costly and peform worse.
In the journal Administrative Science Quarterly, Matthew Bidwell, assistant professor at the University of Pennsylvania’s Wharton School, discovered while external hires get paid up to 20 percent more, their performance reviews were worse than their internal counterparts. To add insult to injury, these highly paid outsiders, were 21 percent more likely to ditch the very company that paid so handsomely to hire them. They were also 61 percent more likely to be laid off or fired.
People fill character gaps in ways that favor unknown individuals. When you fill personality gaps with pixie dust and rainbows, this results in an impressive individual, and of course, a skewed comparison. What normal individual can stand up against an outsider or expert made up of pixie dust and rainbows? “When we don’t know much about somebody, we are freer to interpret their actions,” Ariely explained. “We are positively disposed to think about people in over-optimistic ways, leading us to have this bias.” When we go looking for a better expert, we tend to find them, even when they don’t really exist.
Paying For Advice Increases Perceived Value
Even though we have the data that shows this is wrong, why do we keep falling into this pattern? Why do we pay for lesser advice from unknown outsiders who aren’t a great fit? Francesca Gino, a professor at Harvard Business School and author of Sidetracked, conducted a study that helps explain what’s really going on. It’s as simple as attaching a dollar sign to the advice given.
“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. 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,” Gino said.
Even though external talent delivers the same advice internal employees in the same roles have given, it is perceived as more credible, for the simple reason, it was paid for! This sunk cost problem might explain why executives can’t see their fruitless hunt beyond their own organization’s talent pool. This is because of what I call, The Nazareth Factor.
The Nazareth Factor
It turns out, the people we should trust most, who have a unique understanding of our situation, are overlooked. Instead, we favor distant and more expensive individuals, whose results are proven as poor. I call this phenomenon the Nazareth Factor, referring to an interesting Bible story from Mark, Chapter 6. After experiencing celebrity-like welcomes from city after city, Jesus is completely rejected when he returns to those he knows closely in his hometown. My favorite quote in this section sums it up:
What’s this wisdom that has been given him? What are these remarkable miracles he is performing? Isn’t this the carpenter? Isn’t this Mary’s son and the brother of James, Joseph, Judas, and Simon? Aren’t his sisters here with us?” and they took offense at him.
The Bible. Mark 6:2-3
It’s obvious the implications of the Nazareth Factor are quite significant. The employees or friends that truly have an intimate understanding of your challenges are the least likely to have their ideas heard. This has tragic results, leading to employee disengagement. Disengagement destroys creative potential and overall, it’s quite costly.
Ignoring Employee Ideas Is Costly
Gallup found that when employees’ ideas are ignored, 40 percent become disengaged, and this ends up costing U.S. companies $450 to 550 billion annually. The Nazareth Factor and the rejection that comes with it creates jaded employees and today, 70 percent of employees don’t speak up with relevant advice that could save their company time or money. Trusting the team you’ve put in place is critical because they have a greater understanding of the problems you deal with on a daily basis (and not to mention they’re cheaper).
I’m not saying hiring outsiders is a bad idea, there are great reasons you may want to consider outside help. If the expertise or role you need simply isn’t in the company, go find someone great! Evidence, however, shows how catastrophic it can be to ignore internal talent—the Nazareth Factor’s impact on organizations is profound. Many leaders or teams believe their biggest challenge is simply finding that one genius who has all the answers, but in many cases, the hero you need is already in your midst. What if your predisposition to favor outside and unfamiliar help, has caused you to overlook a Jony Ive in your very own organization?
Tangerine can relate, an award-winning design agency based in London, they design products from cell phones to the kitchen sink and have worked with big brands such as LG, Samsung, Toyota, and Cisco, to name a few. It turns out, they had the Jony Ive working at their company. For years Ive’s work went largely unappreciated by the clients Tangerine served. In 1992, even into his career at Apple, his brilliant mind when unnoticed for years. As he contemplated leaving, not until Steve Jobs returned in 1997 did all his designs receive the recognition they deserved. Ive had been there all along, but no one had noticed.
Employees, but even friends and family feel the full weight of the Nazareth Factor. They are disregarded daily for irrational and foolish reasons. So I wonder, whose potential could you be ignoring, and what’s it costing you?
Updated August 24th, 2021. This article originally appeared in The Washington Post.
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