One Question That Filters 90% of Executive Candidates
Why the key-parameter method begins long before the first interview, and why it does not work at all without consulting work before the search begins.
TL;DR. Gerd Gigerenzer, together with Daniel Goldstein, showed that under conditions of uncertainty, one correct heuristic often matches or outperforms a complex multi-factor model. In hiring, this means the following: for every role in a specific company, there is one key parameter that determines everything else. But finding it is a separate piece of work, one that sometimes takes weeks and requires several rounds of alignment inside the company. Those who skip this step and open the role straight away often hire the wrong person three months later.
In this article: the theory, a case from practice, and one question a CEO should ask before opening any role.
Eighteen candidates and one wrong question
Three months. Eighteen candidates. Two interview rounds for each one, a competency test, and three reference calls.
In the end, the founder hired a BizDev with the right résumé, two years of industry experience, and confident performance in the final interview. Seven months later, it became clear: the person had been building funnels, meeting hundreds of clients, testing conversion across the entire base, and steadily burning through the budget.
Not a single Anchor Client had been closed.
The founder said what people usually say in such situations: “Wrong person.” He fired him and started searching again.
The problem was not the candidate. The problem was that no one, neither HR nor the founder himself, had formulated the right question before the search began.
They were looking for a person with the right résumé. They needed a person with the right paradigm.
These are different tasks. The standard hiring process does not distinguish between them.
Why a simple heuristic beats a complex model
In 1996, psychologist Gerd Gigerenzer, together with Daniel Goldstein, published a result that went against what the academic world believed. Under conditions of real uncertainty, simple heuristics based on one key signal often match or outperform complex multi-factor models.
They called it Take The Best.
The logic works like this: instead of weighing all available variables, a good decision-maker selects the single most informative signal and makes the decision based on it, ignoring the rest.
Not because the rest does not matter. But because under conditions of noise, extra variables do not help. They mask the signal.
This is counterintuitive.
The HR industry has built an entire infrastructure on the opposite logic: batteries of tests, competency frameworks, structured interviews with a dozen evaluation criteria. More data seems more reliable. Multi-factor analysis seems more serious. It is easier to sell complexity than to explain why one question can replace three months of work.
Gigerenzer and Goldstein first demonstrated this in a series of computer simulations and later confirmed it in field studies involving customs officers, doctors, and other experts who make decisions under time pressure.
Their conclusion is inconvenient for those who build businesses on complexity: a person who knows how to choose the right parameter makes fewer mistakes than a person who weighs everything.
What am I willing to tolerate him for?
In our team’s work, we call this the key-parameter method.
For every role in a specific company, at a specific stage, there is one skill that determines everything else.
Not five competencies. Not an eight-factor profile.
One parameter. And it is different for the same role in different companies and at different stages of growth.
In practice, it sounds like a question I suggest every CEO ask before opening any role:
What am I willing to tolerate him for?
This is not a question about tolerance. It is a question about priority.
When a CEO answers honestly, he names the single skill for which everything else becomes background. One key skill justifies fifty percent of the salary. Everything else is context that can be developed or compensated for.
But here is what matters: this question rarely gives the answer on the first attempt.
Before looking for the candidate, find the parameter
Finding the key parameter is a separate piece of work.
It is not an elevator insight and not a five-minute exercise before opening a role. It is a consulting process that, in practice, sometimes takes several days, and sometimes weeks, followed by several rounds of alignment inside the company.
As a rule, the CEO comes with a hiring request.
“We need a strong BizDev.”
“We are looking for a CFO with SaaS experience.”
At this stage, it seems as if the task is clear and the role can be opened. In reality, this is where the hiring mistake usually begins.
Our work at the very start of the process is to stop this impulse and ask a different question:
What exactly must this person do better than everyone else in the room, and why is this, rather than something else, critical for the company right now, at this stage, under these conditions?
The answer to this question is not obvious.
Inside the company, there are often competing ideas about who is needed. One partner wants someone with a network of contacts. Another wants operational discipline. The CEO is thinking about one thing; the board is thinking about another.
All these points of view may sound reasonable.
But none of them is the key parameter until it passes one test:
If this person does only this one thing, does the company win or not?
This work, clarification, alignment, and reality-testing, comes before any hiring process when the key-parameter method is used correctly.
If this step is skipped, the interview question loses its meaning. Because without a clear parameter, there is no one, and nothing, to evaluate the answer against.
One question. Ninety percent were gone
A mid-market European logistics company was hiring for a BizDev role with a focus on Anchor Clients: strategic partners on whom the company’s core revenue is built.
In logistics, such clients are rare.
One right Anchor Client creates predictable load and margin for years ahead. One wrong one becomes an artery of time and resources through which the company slowly bleeds out.
The first step was to convince the CEO to abandon the standard screening routine.
Then the work began on formulating the key parameter, with several iterations inside the team and corrections to the initial wording.
The standard request sounded like this: “a person who knows how to negotiate, build funnels, and close deals.”
After joint work, the parameter shifted to something fundamentally different: the ability to select Anchor Clients according to clear criteria, not through a volume-based trial-and-error process, where the company meets a hundred potential partners in the hope that something will stick.
Not how to work with these clients.
But how to choose them.
From ten options, to identify one or two that fit best, and not waste resources on the rest.
Only after this parameter had been formulated, aligned, and tested inside the company did we introduce one question for candidates instead of hours of interviews:
What is the key parameter when working with Anchor Clients?
The answer had to be explained in five to ten sentences.
Fewer than ten percent answered to the point.
Most built their hypotheses around negotiations, funnel organization, meeting hundreds of clients, and then filtering out the most promising ones.
In other words, they proposed exactly what the company wanted to move away from: a long cycle of trial and error with an unpredictable outcome and guaranteed resource losses at the entry point.
Ninety percent of candidates were proposing to spend the company’s time and calling it strategy.
Those who moved forward already understood the main paradigm in practice:
The hardest and most valuable part of working with Anchor Clients is not negotiation and not the contract.
It is selection.
The right Anchor Client is identified before the first meeting, or never identified at all.
A combination of psychometric and projective tests was then applied to the remaining fewer than ten percent.
Two candidates made it through to hiring.
The result: according to the company’s assessment, the cycle of work with new clients was reduced by thirty to forty percent. The costs of acquiring Anchor Clients fell significantly.
The company stopped financing trial and error.
All of this was the application of one of Gigerenzer’s heuristics: Take The Best.
One parameter instead of multi-factor analysis.
But first came the work that found that parameter.
Where the heuristic breaks
The method works on one condition: the key parameter must be found correctly.
At the BizDev level, a mistake in the parameter costs money and time. Painful, but recoverable.
At the CFO or CRO level, it costs the company its stage. A Series C that never happens. A round that does not close.
Two years during which the company stands still while everyone around it interprets the problem as a market issue.
Here, a question arises that Take The Best does not answer.
What determines which parameters a particular candidate actually sees, and which parameters the particular CEO hiring him sees? Why does one CFO see cash discipline as the only possible key parameter during the first serious cash crunch, while another continues working with Series A tools when the company has long since reached Series C? This is not a question of competencies in the usual sense.
And it is not something a standard self-report questionnaire will reveal.
That is what the next two weeks are about.
References
“Reasoning the Fast and Frugal Way: Models of Bounded Rationality” — Gerd Gigerenzer and Daniel G. Goldstein, Psychological Review (1996)
Bounded Rationality: The Adaptive Toolbox — Gerd Gigerenzer and Reinhard Selten, editors, MIT Press (2001)
Gut Feelings: The Intelligence of the Unconscious — Gerd Gigerenzer, Viking Press (2007)
“Conditions for Intuitive Expertise: A Failure to Disagree” — Daniel Kahneman and Gary Klein, American Psychologist (2009)
Simple Heuristics That Make Us Smart — Gerd Gigerenzer, Peter M. Todd, and the ABC Research Group, Oxford University Press (1999)
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Excellent piece, Daryna!
I'm thrilled to see how powerfully Gigerenzer’s "Take the Best" heuristic can serve as a fundamental filter in the hiring process!
Nice take on the hiring process. Everytime I read an article on the challenges of hiring, I think about how firms should invest much more on the “firing” process. Even the best at hiring do so poorly over half the time. Identifying, managing and then quite possibly moving them out the door, shouldn’t take a year. It shouldn’t be malicious but it should be effective.