The one thing you need to know to run an effective organization

Luigi Zingales:

I think that the first thing is spend time in hiring the best possible people. I think that one thing that works well in university is that we spend a huge amount of time selecting faculty. A lot of what we do is listening to seminars, reading papers, refereeing papers, selecting the next generation.

What I’ve learned in various organizations is the best, most successful organizations are the ones that spend a huge amount of time selecting the good people. Because it’s very costly to fire — you don’t want to fire unless you have to. Once you get the right people in place, organizations, I wouldn’t say run themselves, but almost. If you don’t have the right people in place, you spend a lot of time fixing the hiring mistakes.

From an interview by Tyler Cowen. Zingales is a Chicago finance professor, who among other things has studied culture and governance in organizations. The interview ranges from what we learn about Trump from Berlusconi, how northern Italy subjugated Southern Italy and what it tells us about the European Union, why Italian cafe’s are so productive, and why Italy has the best secretaries and the worst managers.

As if Tyler Cowen wasn’t the greatest intellectual blogger of the age, he is also hosts what I think are the greatest interviews. See his interview of Jeff Sachs. I look forward to Dani Rodrik next week.