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Ask the Experts: Stop Shooting From The Hip

In an ongoing effort to Add Value for you as a Leader, I’ve been seeking out Experts who have unique talents to ask them for their experiences. This week Doug Wick, a Professional Coach and Business Advisor, shares some of his thoughts on how you can improve your hiring.

[JDavis] What do you see as the biggest challenge your clients face when they make hiring decisions?

In most cases they’re shooting from the hip. Most of them have, at best, a 50/50 chance of someone they hire being the right fit. Not only that, they often don’t have any clue to figure out or determine if someone is a solid candidate when they make their final decision. They’re simply not confident in their “system” for hiring and, even those companies who who have taken the time to build a “system” aren’t sure whether or not it’s telling them the right things about people that they’re interviewing.

[JDavis] What are the top 2 or 3 recommendations you’ve made in the past year to your clients on how to improve hiring effectiveness?

1. Embrace and utilize Topgrading. The methodology is terrific.

2. I’ve built a process to measure and review my clients’ hiring “batting average.” Through this I’ve learned to encourage people to look back and reflect on their recent hires and rank “good” and “bad”. I had a client who used the Topgrading Methodology but they still missed on a key hire and this reflective activity that I took them through following that mis-hire helped them get a better grasp on what their culture is and how to screen more for cultural fit during the interview process. If you don’t evaluate why you’ve been making mistakes you are bound to repeat the same mistake in the future. The hiring process is often very subjective. Recognizing your mistakes moves you from making a largely emotional decision to a decision steeped in objectivity with a seasoning of emotion which provides the best hiring outcome.

3. When hiring salespeople, I encourage our clients to use the Objective Management Group’s sales screening test. The outcomes [according to OMG research] produce a 96% effective sales hire. From what I’ve seen, the results do actually match up with those claims. They’re very thorough and accurate. Despite their effectiveness we still recommend doing the Topgrading interview with the candidates the test recommends to make sure their test results and track record match.

[JDavis] How instrumental do you feel regular Strategic Planning is to making the right hiring decisions?

It’s important. While it’s not as important as employing Topgrading, if a company is doing Strategic Planning they’re likely to be more aware of where they are going (and from what I’ve seen, most companies plan to improve and grow). With that sense of awareness, they are more cognizant of the need to upgrade their existing staff or add additional staff to achieve their vision. Strategic planning helps companies better understand how important it is to get the right people on the bus because they spend the time understanding their business and its trajectory.

[JDavis] Who are the companies that you’ve witnessed that have done a great job of hiring the right talent and why?

Ideal Computer Systems (Cedar Rapids, IA) – they have a really solid interviewing process that is based on a step-based interview process that makes people who are candidates go through stages that include really tough interview questions that require someone to prove that they’re an “achiever”. They also consistently do great reference checks and also ensure that they’re always doing background checks on everyone.

Meta Law (Ventura, CA) they had a very long and disappointing process of spending more than 18 months searching for a “successor” to the President of the company. They interviewed local talent and they got discouraged when they didn’t find the right person for the role. On my suggestion they went out and ran ads in places like their association newsletter that resulted in them getting introduced to a great candidate who was moving back to the city/location they are based in. Then utilizing Topgrading and not “settling” for someone just because they were tired of looking or because they didn’t want to expand their geographic reach, they made a great hiring decision. I always find it so rewarding as an outside consultant when a company can really use Topgrading and it results in an exceptional hire.

Doug Wick

Doug Wick is a certified Gazelles Coach with 12 years of coaching experience and 9+ years as an E-Myth Certified Consultant. Doug coaches his clients on how to develop Strategic Discipline. He focuses on small to midsize business owner/CEO with a ravenous appetite to improve their leadership skills and business results. Positioning Systems provides unrelenting personal commitment combined with foundational and dynamic best practice tools that enhance management proficiency and produce measurable performance.

Tags: A-Player, hiring, Interview, Objective Management Group, talent acquisition, Topgrading, topgrading methodology, verne harnish

07 Oct 10 | Interviewing, Recruiting, Topgrading | Read on | Comments (0)

You’re Rescuing Others and It’s Killing Your Interviews

In observing an interview on-site with a client earlier this month I recognized a disturbing trend across everyone in the organization that, upon further research, is happening in nearly every company and in every interview. When asking someone a tough question, instead of waiting for a response, the interviewer is rescuing them.

We’ve modeled our interview process on the best practices of Topgrading® and they all start with:

In your most recent role, what was the situation when you accepted the position with respect to talent, resources, systems and efficiency?
What were your top 2 or 3 responsibilities?
What were your top 1 or 2 accomplishments?
What are the 2 mistakes that you made in the role or what would you do differently if you were starting that role again today?

What we’ve witnessed is that nearly everyone is more than willing to answer the first three questions – and when asked in this order, they feel more and more confident as you give them permission “brag” about themselves. However, when you get to the 4th question, a significant number of candidates (whether for fear of appearing weak or not wanting to have to talk about the tough parts) will respond with, “You know, I can’t think of anything.”

Because interviews are often scheduled for 30 or 60 minutes at most companies, hiring managers and interviewers often feel like there’s a ticking clock that doesn’t allow them to stop and wait and (this is the hard part) endure the awkwardness of silence. Yet throughout history, the top business leaders are in agreement that our greatest learning opportunities happen when we are making mistakes – not when things are going really well.

To learn more about the skill of the skill of purposely allowing candidates to struggle, I interviewed Christopher Mursau, the Vice President of Smart & Associates in Chicago, IL.

JDavis: What’s the benefit of letting someone struggle through a tough question?

CMursau: It sets the stage early on that you’re going to ask the questions that allow them to give positives but you also need to know about the negatives and you’re not going to let them off the hook. It’s important that they understand that when you ask them a question they need to answer it honestly and if they need some time to think – that’s ok!

JDavis: How have you learned to be patient during these difficult stretches of an interview?

CMursau: It depends on where we are in an interview – if I’m talking about someone’s career when they were just coming out of college and they can’t think of a mistake that they made (in a position from 20 years ago) I’ll often use the opportunity to let it slide to get to know them a little better. I’m also starting to “train” them about what’s coming up in future questioning – that’s why it’s called a CIDS Interview (Author’s Note: CIDS = Comprehensive, In-Depth, Structured)

There’s a difference between pushing and building rapport. Ultimately, I want the candidate to give me their best and honest answers about their most recent positions. If they’ve had 5 jobs in their career, I might let them off the hook on the 1st one but the next 4 jobs (leading up to the present day) I’m going to be more patient and more insistent on them answering the tough questions. Because I’ll ask the questions in the format you mentioned above about every position, the person I’m interviewing realizes quickly that it’s going to be awkward for them and unacceptable to me when they say, “I don’t remember” twice in a row about the same difficult question.

JDavis: How much significance do you give to the questions around admitting weakness or owning up to mistakes?

CMursau: Incredibly significant – it’s possibly the earliest warning sign for me of an interview that won’t end well. When someone is unwilling to talk about weaknesses or mistakes, it’s been my experience that they won’t respond to constructive criticism, they’ll be hard to coach and more often than not they’ll be prone to blaming others when something goes wrong. When someone has shallow insights into their strengths and weaknesses I seldom advise a company to hire that person.

JDavis: What counsel would you give to an interviewer to help them deal with the candidate who can’t find it within themselves to share the mistakes that they made?

CMursau: Give the candidate opportunities. Ask the question around the mistakes about 3 straight jobs (if they struggle twice in a row, try asking it in a slightly different way the 3rd time). Employ the “pregnant pause”. If, after the third time they can’t think of anything, it’s likely they have low self-awareness. When this is present, I’ve found it to be a leading indicator of a lot of other red flags and the likelihood of that person being a fit for your company is very, very low. I’d strongly encourage someone to end the interview if the candidate shows lack of awareness about 3 consecutive roles in their career.

Chris completed his undergraduate degree in psychology at The University of Wisconsin, and his MBA at St. Thomas University. He joined Smart & Associates, Inc. in 2001 and provides the full range of professional services.

Tags: A-Player, A-Players, chris mursau, hire better, Interview, talent acquisition, Topgrading, topgrading methodology

24 Aug 10 | Interviewing, Recruiting, Topgrading | Read on | Comments (4)

Build a Better Scorecard

Patrick Thean is the author of Execution Without Drama and in June 2010 I got the opportunity to hear him share some of his thoughts on creating specific scorecards for Manager Level talent and, because I get so many questions from hiring managers and business leaders about this exact topic, I felt like a blog post to share his suggestions was worthwhile. Here they are:

KEY PERFORMANCE INDICATORS FOR MANAGERIAL SCORECARDS:

RELATIONSHIPS & PEOPLE

Employees:

Voluntary Attrition
Keep Smart (learning, furthering themselves)
Employee Net Promoter Score

Customers:

Net Promoter Score

Shareholders:

Dry Powder
Burn Rate
# of Months of Cash (Runway)

PROCESS

Make/Buy:

Quality & Bugs
Supplier Mistakes
Project Health Index (actual vs. plan)

Sell:

Sales against plan/quota
Pinkie Report (Patrick’s idea for his sales team – if this deal doesn’t close I get your pinkie)

Records (Finance):

A/R Quality
Cashflow
# of days to Close & Report

Tags: A-Player, EO, patrick thean, Retention, Scorecard, Topgrading, topgrading methodology, verne harnish

11 Aug 10 | Compensation, Employment, Retention, Topgrading | Read on | Comments (3)

Do Your Employees Know What Equals Success

The following letter was written by a fellow Entrepreneur who needed his top Technical Talent to really understand what he was getting into by asking to take on the role of CTO as the company continued to grow. I’ve taken out any personally identifiable information but I DIDN’T remove any of the CEO’s requests because I wanted each of you that read this blog on a regular basis to be able to see how well thought out this is and how he did such a good job of explaining his vision for the role, what it would take for the current employee to move into that role and what they would be responsible for. But he didn’t stop at that, he gave him options! Proactively realizing that it would be likely that the employee wouldn’t want the role of CTO after seeing what went into it, he described the four other roles that the employee should consider pursuing instead so that the employee didn’t read this and get the wrong message that maybe he wasn’t “wanted” any more.

There’s a lot that everyone, including myself, can learn from how well this CEO communicates.

A CTO’s role and responsibilities

A Chief Technical Officer is an executive-level position in a company who is focused on technological issues within an organization. It typically involves overseeing Research and Development activities, and formulating long-term visions and strategies at the officer level.

CTO’s focus on planning, budgeting, and business management. They see technology as a tool to solve business problems. In my option, the challenge we’re currently facing is that we view technology like a toy – one that we enjoy playing with but not focusing on its real purpose – to finance our team and solve business problems (with a focus on the finance). We solve problems with technology, we respect it, we enjoy working with it, can sell it, but there is a higher order ROI (Return on Investment) and applicability function that a CTO must perform. And that’s where I see us coming up short.

What it takes to be a great CTO

Admittedly, we’re both inexperienced with defining this particular role. To compound the issue, you haven’t been part of a bigger company to observe what a CTO does. You don’t know what you don’t know yet. If you’re restless and in a rut, this may surface in future challenges as well in terms of how you perceive your value. I learned long ago that technology is perishable and you have maybe 6-8 years of being a super geek before you need to reinvent yourself or face becoming obsolete. And with the extreme changes in technology, that window is getting smaller and smaller. To take the next step in your career development, I suggest changing your perspective. Perhaps try thinking the following ways:

Think bigger. Be responsible for the transformation of capital – be it monetary, intellectual, or political – into technology to further our objectives. You must combine your strong technical background with business development skills in order to create and monitor business value from IT assets.

Think differently. I get the impression that you’re struggling with knowing what our business is supposed to be. Simply put, it’s a machine that solves problems for money. Period. We need to accept and remember business fuels technology. Technology does not fuel the business.

Think strategically. Start looking at things differently. Technology is nothing more than a tool that is used to solve business problems. As a corporate officer, your primary concern should be long-term strategy and “big picture” issues while still having deep technical knowledge of the relevant fields we occupy.

How do you get there?

Becoming a great CTO and technology leader is going to require you to at least double the amount of effort you’re currently putting in – and that’s no exaggeration. There’s a lot you’ll need to learn. This requires a great deal of restraint and will force you outside of your comfort zone. I realize this will not happen overnight. But, I believe in you, and if you want to take the next step in your career development, here are the things you’ll need to do.

Read every day. You must set aside time every day to read blogs, newsletters, books and magazines. This is non-negotiable. Put the time on your calendar, shut off your phone, IM, email, etc and read.

Better communicate your vision. Be more proactive in what you want the team to accomplish, what our product should do, and what you hope it can achieve. You’re the driving force with building our product suite, and it needs to show! This needs to be done on a daily basis. You must reinforce your views every day.

Know the competition. You should be able to rattle off a list of our competitors without hesitation. You should be able to tell me exactly what they’re doing, who they’re targeting, what kinds of features and benefits they have, and how we’re different and better than them.

Know the players in the space we occupy. You should be obsessed with our marketplace. You should be able to list off every major company out there we could possibly do business with. You need to know how their technology works and how we can work with it.

Know the latest technology trends. You must be up to date on the latest platform decisions whether it’s .NET or PHP. You need to have a view on whether Ruby on Rails is worth the hassle. What I’m getting at is technology is changing very fast. You don’t want to be left with an obsolete skill set in case .NET falls out of favor and/or something better comes along. The only way to prevent this is to know what’s happening now and what’s coming down the road later.

Forge relationships with the players in the space we occupy. You need to get out there. You need to become comfortable in the role of wearing the company’s public face when it comes to all things technology. This will require you to start proactively talking to people and introducing yourself to them. Start attending trade shows and conferences, contribute to discussions on online forums, find people on LinkedIn and introduce yourself. Consider even taking a public speaking class through your local Toastmasters club.

Meet other CTO’s. Start rubbing elbows with people like you at other companies.

Properly manage and mentor the team. This means you must make time every day to meet with your team to discuss issues and roadblocks, discuss technology trends, and get to know them better. In addition to, I suggest meeting every other day to or two times a week to do code review as well.

Travel to our office at least once a month. I’m not convinced what we are doing can be done remotely. Being successful will take a herculean effort. As such I’d like you to plan on spending most of your time here each time working face-to-face with the guys.

Find a mentor. I highly suggest a mentor. That’s the only way you can be sure that the CTO role is right for you. You’ve got to talk to someone who actually does it. I certainly haven’t been a CTO but I have worked alongside them. It’s a demanding job and not right for everybody.

Take ownership and be more accountable. You know what’s required to get the job done, not me. You have to enforce deadlines and dates. This is what successful companies demand. We can’t be any different otherwise we’ll always miss our deadlines and dates.

Do you still want to be CTO?

As you see, it takes a ridiculously large amount of work and discipline to be a CTO. I’ve never faced this issue before and it isn’t easy. But being in it now and seeing how much is required of a CTO, I don’t want to presume that this is something you want to be. I’d like you to reflect on my suggestions above and work with me to define what role you want to play in the company.

Other roles for you to consider

I want to help you find out what you love doing while being careful at the same time not to pushing you into something that you’re not, or not ready for. If you decide the CTO hat is not for you, I want you to consider the following alternatives:

1. The Lead Architect – Every great technology startup needs one of these – this is not unique to our company. If we don’t have somebody inside our organization that is setting the technology direction then I’m convinced we’ll never head for greatness. Either our core is innately technical or it’s not. It’s what makes Google, Google and Facebook, well, Facebook.

I believe that every great technology startup has the technology visionary inside the company. This needs to be you! You not only need to own all the technology but you need to dictate what it is we’re building and why – every day.

Trying to work without this person is like wanting to build a world class sky scraper but not having a great lead architect and civil engineer. They provide the vision for our infrastructure. The problem that many inexperienced startup CEO’s like me make is confusing these people for the people who lead the technology team. Most often they are not. The deepest thinkers on technology architecture are seldom good team leaders. They often aren’t great at planning development work. The best technologists often aren’t amazing people managers. Sometimes they are introverts.

2. VP Engineering – First and foremost, a VP of Engineering is a people manager. They have the respect of their team because they’re technical by training. But they’re that rare breed that also understands the human element. They know how to motivate their people. They know how to get people to hit deadlines. They know when it’s OK to push hard for the team to hit a deadline even if it means yet another all-nighter or weekend. And they know when to tell me (the CEO) to shove it because the team has reached maximum stress / effort. A great VP of Engineering manages me (the CEO) as well as the team below him.

In my view it is important to distinguish the difference between the CTO and the VP Engineering. The VP of Engineering is the person who still has great technical chops but prefers not to be a developer.

The VP Engineering aspires to manage teams. They feel comfortable with C# but are also whizzes in Excel. They are sticklers about managing unit tests, system tests and regression tests. In fact, they’re passionate about automating testing overall. They know how to estimate work units, how to manage the agile development process and how to get the most out of their teams. VP’s of Engineering are essential to making sure the trains run on time. The VP of Engineering is also our company’s primary interface to our future head of product management and often the VP of Engineering is somebody I would bring with me to meet clients and to win big deals.

3. Program Manager – This title almost sounds like a consultant’s job. It is not somebody that we need just yet. However, it is one of the more critical roles as we scale our company. As we head into the phase where we get real customers paying real money for a period of time we’ll have a whole new set of issues. Examples include:

Every time you release new features you need to update our technical documentation

Updating our marketing documents including our website

Somebody needs to be sure that customer service is alerted to the new features and are trained in how to handle these functions with customers

New features need to be rolled into PR strategies and competitor analyses

New features need to be documented so the rest of us know the latest and greatest about how to differentiate from the competition.

Many startups have never faced these challenges because they haven’t hit scale. Trust me, as we grow these issues become the key to winning large customers and keeping them happy.

4. Lead Developer – This person is the most senior of all developers on staff. They are typically the go-to person on projects they are assigned. Their entire function in the company is to product top-tier code while acting as a mentor to other developers that are more junior.

The lead developer typically reports to a CTO or VP of Engineering and is a key part of their team.

Closing thoughts

In summary I hope this didn’t scare you away. On the contrary I’m here to help you. You’re an incredibly gifted and talented individual that does so many things right. At the same time, however, you have a lot to learn and achieve. We both do. I hope this letter identifies what steps we need to grow this company and helps you to reach your full potential.

Tags: A-Player, EO, hire better, proactive recruiting, Retention, Scorecard, Topgrading

03 Aug 10 | Employment, Retention, Topgrading | Read on | Comment (1)

I Can Smell You From A Mile Away

I had the good fortune of hearing Cameron Herold today while I am in Boston for EO’s Entrepreneurial Masters’ Program. His topic was “Leadership at 100 MPH” and a lot of the focus was on hiring with predictability and not making mistakes that really could really hurt your company.

For 2010 we’re proud to sponsor Cameron because we agree with what he teaches to Entrepreneurs and Business Leaders around the world. While I’ve heard him speak a number of times I always get a few new things each time I hear him. Here’s some quick thoughts from today that hopefully you can benefit from:

Culture’s hard to build and easy to destroy. One of the fastest ways to destroy it is to not fire people who clearly can’t do the job they’re in. Not only that, you’re doing that “problem” employee a disservice by asking them to live on pins and needles while you’re “too chicken” to let them go.
When you’re hiring someone new onto a team, don’t ever let your team’s “average performance” drop. More pointedly: if you’ve got 6 people on your marketing team and you’re about to hire a 7th, make sure that the person you’re hiring is at least more qualified and better than 3 or more of the existing team members to keep raising the bar.
Ensure that you’re very clear on what your needs are when hiring and then make sure you can “smell the right person from a mile away”. Cameron used the example of going duck hunting with his grandfather as a child. Early in the morning, as the sun was coming up, small V’s of ducks would appear on the horizon and even as they were just specs a mile away Cameron’s grandfather would be able to tell whether or not they were the right ducks for them. “Nope, put your gun down” he’d say. When pressed to explain why he would clearly describe wingspan, formation of the flock and altitude. The business application isn’t a hard jump to make: it’s easy to get excited when you’re in the thrill of the hunt but you have to be very clear about what you’re hunting.
Staying with the aforementioned parable, when Cameron was out duck hunting they’d always bring decoys to go by their blind. To an amateur, a decoy is a decoy. However, to the experienced sportsman, the use of decoys will make or break your time on the water. Choose the right decoys with the proper placement and you’ll have plenty of opportunities but choose the wrong one and you won’t attract a single target to shoot at. Business application: if you walk outside your office and look at the front door and you’re not impressed with the look, what’s an A-Player going to think? If your reception area is unattractive and your office sounds like a funeral home, how’s that 28 year-old superstar going to feel when they show up to learn more about your company culture? The morale of the story: if you’re not using the right bait, you’re going to end up eating really nasty fish or not eating at all.
Are all of your Hiring Managers fully aware of the background that you’re looking for in team members 2 years from now? If you’re hiring for the people that your company needs TODAY, and with the scorecards of the performance targets they need to hit this month, you’re likely not attracting the A-Players who will move your company forward. Instead, they’ll be the people who will keep your company stable. Are your Hiring Managers guardians of your culture? Are they clearly aware of your company goals?
Tread carefully during negotiations with top performers and try to avoid including profit sharing as part of their compensation plans. When you’re growing like crazy, profit-sharing can be a great bonus for people for their work but if your key players rely on profit-sharing bonuses to pay their bills and maintain their lifestyle they’ll bail as soon as the company hits any rough spots – and that’s when you’re going to need them the most. Build compensation packages that key team members feel is fair for the work that they’re doing and then have any profit-sharing programs be the cherry on top.

And lastly, Cameron shared the matrix of Jack Welch at GE used when evaluating his teams. Nicknamed “Neutron Jack” for his often rash and emotionally-devoid decisions, he was also widely regarded as one of their very best evaluators and developers of talent. In fact, Jack was the first CEO to implement executive-level Topgrading. This simple 4square was his way of slotting and categorizing talent that he already had on his team. I found it both really easy to understand/remember while also profound.

Here’s the image:

The Definitions:

F = FIRE THEM. NOW.
C = COACH THEM – THERE’S STILL A CHANCE.
H = HANDCUFF THEM. MAKE SURE THEY”RE LOCKED UP FOR THE NEXT 5 YEARS.

Tags: A-Player, A-Players, Brad Smart, hire better, hiring, hiring manager, Interview, jack welch, job description, recruit don't absorb, Retention, Scorecard, talent acquisition, Topgrading, topgrading methodology

25 Jun 10 | Compensation, Employment, Interviewing, Recruiting, Retention, Topgrading | Read on | Comments (2)

The 5 Best Ways to Judge People

I’ll admit it, I’m a bit of a geek when it comes to evaluating talent and Topgrading is about the best way that I’ve ever seen to do it. It’s objective, gives you a structure to follow and makes it easy to judge prospective employees without a lot of emotion.

To keep up with the latest and greatest tips for Topgrading better, I’ve subscribed to Brad’s newsletter. You can sign up here.

His most recent newsletter was fantastic – it was titled “The 5 Best Ways to Judge People”. The most significant parts of that newsletter can be seen below. Enjoy!

When people are just learning Topgrading, it’s easiest to use the A, B, and C categories, to show the dramatic differences. Topgrading professionals are able accurately put people in the right categories. In doing this they actually have three slightly different categories – A Player, A Potential, and Non-A. We define A player as someone in the top 10% of talent for the pay, in your location, in the industry, and reporting to you.

Following are 5 of the best ways I know of to judge people in a fair, objective, legally defensible way:

1. How A, B, and C players differ on key competencies. The following chart is a bit simplistic because not all A players are that great on all competencies and not all C players are that bad on all the competencies. Indeed, in real life C players usually are A players on some competencies.

2. Look for patterns of success. The “magic” of Topgrading comes from understanding, bottom line, how successful a person was in job 1, job 2, job 3, etc., with the greatest weight given to the most recent jobs.

Last year I interviewed a smooth talking executive who had clearly been a superstar in the industry, but the guy had not worked hard for years. He had peaked years ago, was on a decline and frankly the pattern showed he was “over the hill,” someone who had lost his energy, drive, resourcefulness, and passion.

3. Recruit a replacement. This really is the best way to see if your employee is truly among the top 10% of talent available.

After you have argued with your employee, complained about unsatisfactory performance, and heard 1,000 excuses, the simplest way to see if there are better people is to actively recruit them. This can be done secretly, but go through all the Topgrading hiring steps including talking with former bosses.

Over the years I’ve heard it hundreds of times: “It became very easy to replace my employee after going through the Topgrading hiring steps, because I became absolutely certain my excuse-making employee was a C player, and I had three A players very willing to join me at exactly the same salary as my C player.”

4. Never stop building your recruitment networks. As a Topgrader, you know the best way to recruit is by staying in touch with 40 A players you’ve worked with and also stay in touch with 20 “connectors,” people who know a lot of A players.

But in addition to using your networks to recruit, staying in touch helps you figure out if your team consists of A, B, or C players. As you chat from time to time with A players you’ve worked with in the past you hear about their accomplishments, what they pay people, the standards they set … and when you share your frustrations with a certain employee, your network will give you feedback that your expectations are too high or too low.

5. Assess employees using Topgrading methods. You might already know that my first consulting engagement with General Electric was to improve their success promoting people. They improved from 25% to well over 90% success, and the internal assessment methods are almost identical to Topgrading hiring methods. Two trained interviewers conduct the tandem Topgrading interview and instead of talking with outside references (for hiring) they talk with bosses, peers, and subordinates in the company.

Tags: A-Player, A-Players, Brad Smart, career history, chris mursau, Fame, Family, Fortune, Fun, hire better, hiring, Interview, recruit don't absorb, Recruiting, Scorecard, smarttopgrading, talent acquisition, Topgrading, topgrading methodology, TORC, virtual bench

01 Apr 10 | Interviewing, Recruiting, Topgrading | Read on | Comments (7)

Only the Employed Need Apply (Especially in Sales)

I’ve been sitting on this blog post for a while thinking that its efficacy would get better and better as the economy and job market failed to recover at the pace that the economists thought (hoped) it would. It looks like my hunch was right.

Nine months ago, the Wall Street Journal published an article called “Only the Employed Need Apply“. The premise of the article was that many employers were only interested in talking to people who were already employed – even if the candidate who had applied had lost their job even after performing at a high level.

Bobby Fitzgerald, a partner in five restaurants in three states, says these days he gets two dozen or more unsolicited résumés each day at one of his Phoenix restaurants, the White Chocolate Grill. But Mr. Fitzgerald says his top candidates, for jobs ranging from servers to management, usually are people who are employed elsewhere. He currently has 50 openings across his five restaurants and has told recruiters to bring in only people who are working.

When you consider that in March 2010 our unemployment rate is still on the precipice of 10% and the average time that someone is unemployed is still over 1/2 of a year, it would appear that Business Leaders like Bobby Fitzgerald aren’t alone.

At Hire Better, we’ve seen a significant up-tick in the number of clients who want us to assist them in hiring salespeople. For those salespeople who we see as applicants, the statistics are NOT in their favor if they’re applying for a role in which Hire Better is involved. Here’s what we’ve found:

In a typical hiring cycle, assuming that we have 100 people to consider for a role:

82-85 will be Direct Applicants
12-15 will be People who are “headhunted” or from our Network
1-3 will be Referrals from internal employees at the client company

When we get down to the Top Three Finalists, they’ll look like this:

1 Direct Applicant
1 “headhunted” Candidate
1 Referral

And when the finalist is hired: The chance of the Direct Applicant goes DOWN exponentially as the salary and responsibility goes UP.

For a Sales role, the prospects of a Direct Applicant are even WORSE. The same statistics will apply to the Candidate pool as before but I have to expand the pool to 5 people when you look for Finalists:

1 is a Direct Applicant
3 are “headhunted”
1 is a Referral

And when this is the case, the Referral has more than a 50% chance of getting hired and the Direct Applicant has less than a 10% chance. In the case of sales candidates – I believe these stats are just about right. And they’re justifiable! If you’re considering hiring an unemployed salesperson or sales manager, you should be asking yourself “Why would a good salesperson be unemployed?”

Dave Kurlan, who I haven’t mentioned in quite awhile, recently shared his findings on how long it takes to get an ROI on a salesperson. His bold mathematical formula looks like this:

If you have a 12 month sales cycle and an 8 month learning curve, it will take nearly 2 years to get your new salesperson producing consistently. In that 2 years, maybe you’ll pay out close to $150,000 in subsidies.

Using your average margin, how much revenue must be gemerated to offset that subsidy?

How much revenue must be generated to produce a satisfactory ROI?

How long must the salesperson stick around in order to produce that ROI?

To bring it all back together, if a prospective sales candidate (who, for the sake of this blog post is unemployed) has found him/herself in a new sales role every 2-3 years, what are the odds that anyone who is hiring them is going to experience a positive ROI?

When we look at candidates through this lens we find it’s a lot easier to not find ourselves getting “sold” during an interview by someone who has all kinds of great excuses for why “things just didn’t work out” at that last job they were in…

Tags: A-Player, A-Players, bad hires, Baseline Selling, challenges of hiring salespeople, Dave Kurlan, hire better, hiring, hiring manager, Interview, Kurlan, mediocre salespeople, Objective Management Group, recruit don't absorb, Recruiting, recruiting salespeople, Salespeople, talent acquisition, unemployment, unemployment rate, virtual bench

10 Mar 10 | Compensation, Employment, Interviewing, Networking, Retention | Read on | Comment (1)

Team Motivation When You Need It Most

It’s that time again: I dug up an old gem from Dave Kurlan as I was working on building the incentives for our Executive Team at Hire Better.

Earlier this year, Dave shared his opinions on the 5 Steps To Motivation. We Tweeted just this past week about ensuring that you’re worrying less about Motivation as a Leader and more about De-Motivating your employees.

Below are some of Dave’s thoughts. Of note: he suggests that various people react to these in different ways. I found that doing a Communication Builder with my Sr. Team and Executive Assistant was really valuable (thanks to the suggestion of my Mentor Lois Melbourne). Knowing how each of them wants to receive information and how they want to be Praised/Critiqued was really valuable but I still have found that the #1 item on his list is the most valuable. I’ll only (personally) use #2-5 as the situation gets more dire.

“I believe that motivation is very misunderstood. You can’t motivate by being a cheerleader, nor can you motivate by reciting somebody else’s inspirational quotes. Motivation comes from within and you must find out what your people’s internal motivators are. Why are they doing this thing called selling?

The other thing that’s important to know is that everyone reacts differently to motivation and motivation takes many forms. For instance, perhaps you have some people who respond to one of these methods when trying to get them to perform:”

Challenge them (I have a challenge for you…do you think you’re up to it?)
Feign that you’ve lost faith in them (Tell them that you don’t think they can do it)
Encourage them (I just know you can do this!)
Demand that they perform (You are required to do this)
Ultimatums (If you don’t do this you’ll be out of a job)

Tags: A-Player, A-Players, Baseline Selling, challenge, Dave Kurlan, demand, encourage, Fortune, hire better, job description, lois melbourne, lose faith, motivate, motivation, Scorecard, Twitter, ultimatum

23 Nov 09 | Compensation, Employment, Retention | Read on | Comments (0)

Winners Never Cheat and Cheaters Never Win

I’m a HUGE St. Louis Cardinals (and baseball) fan. It struck me with a huge amount of disappointment when the Redbirds announced that they had voided a contract that they signed with a 16 year old from the Caribbean who they had been working to sign for quite some time.

Why would they void a contract after beating out a dozen other teams and offering $3.1mm (a record for the Cardinals in signing an Amateur)?

Because, as it turned out, his Agent lied about the fact that the young man had a degenerative eye disease that was robbing him of his vision. They hid it in the hopes that he could get signed fast enough to just start playing and put the money in the bank.

Yes, I understand that most business owners and hiring managers aren’t dealing with salary numbers anywhere near the millions BUT, if someone’s been unemployed for a period of time, has a mortgage that’s overdue and has bill collectors calling every day, how honest do you think they’re being during their interviews?

Some things that you should be closely evaluating to be sure that you’re getting as close to the truth out of prospective employees during the evaluation process:

Do your Job Descriptions give away too much about the job? In other words, if it was a personal ad, does it explain too much about your likes and dislikes so that someone could “fake it” on a first date?
Are your interviews structured and planned in advance? If you’re making up your interview questions on the fly based on the answers you’re getting, are you getting to the meat of what you need to learn about a prospective employee or are you having great discussions about all of their strengths and letting them withhold their weaknesses?
Are you conducting INTENSE Reference Checks? I’ve gotten a ton of positive feedback from a blog post from a couple of weeks ago about how to dig in during the Reference Process. Without really pushing to talk with previous hiring managers, are you getting the truth from candidates or just their half of the story?
Are you running Credit History Reports on candidates to evaluate if they’re in such dire straights that they are more likely to tell you whatever you want to hear?

People in tough situations will often be pushed to do things that they normally wouldn’t do. Many times, we’ve seen that this includes bold-faced lies during their interviews and on their resumes. A prime example: just this past week we had an applicant suggest that she had 10 years of Business to Business Marketing Experience. She had such a good story that an inexperienced interviewer probably would have ‘bought’ it. Because the Hire Better Team Member who was interviewing her knew how to dig in further it was discovered that her 10 years were really only 9. And that B2B experience: working as the Office Manager for a Flower Shop that had a local relationship with 1-800-FLOWERS and a $500/month budget for Google AdWords.

Bottom line: expect the best from people but, especially in this kind of economy, don’t just accept what you’re hearing as the truth.

Tags: A-Player, A-Players, career history, cheating, dishonest, hire better, lies, recruit don't absorb, Recruiting, Reference Check, talent acquisition, Topgrading, unemployment, virtual bench

19 Oct 09 | Compensation, Employment, Interviewing, Recruiting | Read on | Comments (0)

How Would Socrates View Topgrading?

This past week, one of our Clients was presented with a difficult situation: through working with the Hire Better Team and allowing us to follow our Methodology and engaging in the theory of Topgrading, we acquired so much information about an Executive Level Candidate that it almost resulted in the Candidate NOT being offered a position.

How could this happen?

I’m going to reference a lot of what is now widely referred to as the “Allegory of the Cave”. What follows is from Wikipedia and, while it’s a little verbose for a single blog post, it’s worth a read. I’ve summarized my thoughts right below this entry.

Inside the Cave

Socrates begins by describing a scenario in which what people take to be real would in fact be an illusion. He asks Glaucon to imagine a cave inhabited by prisoners who have been chained and held immobile since childhood: not only are their arms and legs held in place, but their heads are also fixed, compelled to gaze at a wall in front of them. Behind the prisoners is an enormous fire and between the fire and the prisoners is a raised walkway, along which people walk carrying things on their heads “including figures of men and animals made of wood, stone and other materials” The prisoners can only watch the shadows cast by the men, not knowing they are shadows. There are also echoes off the wall from the noise produced from the walkway.

Socrates asks if it is not reasonable that the prisoners would take the shadows to be real things and the echoes to be real sounds, not just reflections of reality, since they are all they had ever seen or heard. Wouldn’t they praise as clever whoever could best guess which shadow would come next, as someone who understood the nature of the world? And wouldn’t the whole of their society depend on the shadows on the wall?

Release from the Cave

Socrates next introduces something new to this scenario. Suppose that a prisoner is freed and permitted to stand up. If someone were to show him the things that had cast the shadows, he would not recognize them for what they were and could not name them; he would believe the shadows on the wall to be more real than what he sees.

“Suppose further”, Socrates says, “that the man was compelled to look at the fire: wouldn’t he be struck blind and try to turn his gaze back toward the shadows, as toward what he can see clearly and hold to be real? What if someone forcibly dragged such a man upward, out of the cave: wouldn’t the man be angry at the one doing this to him? And if dragged all the way out into the sunlight, wouldn’t he be distressed and unable to see “even one of the things now said to be true”?

After some time on the surface, however, Socrates suggests that the freed prisoner would acclimate. He would see more and more things around him, until he could look upon the Sun. He would understand that the Sun is the “source of the seasons and the years, and is the steward of all things in the visible place, and is in a certain way the cause of all those things he and his companions had been seeing”.

Return to the Cave

Socrates next asks Glaucon to consider the condition of this man. “Wouldn’t he remember his first home, what passed for wisdom there, and his fellow prisoners, and consider himself happy and them pitiable? And wouldn’t he disdain whatever honors, praises, and prizes were awarded there to the ones who guessed best which shadows followed which? Moreover, were he to return there, wouldn’t he be rather bad at their game, no longer being accustomed to the darkness? “Wouldn’t it be said of him that he went up and came back with his eyes corrupted, and that it’s not even worth trying to go up? And if they were somehow able to get their hands on and kill the man who attempts to release and lead up, wouldn’t they kill him?”

The relationship I’m hoping to make here is that when a company initially begins to consider Topgrading, it often results in companies quitting before they even get started (note: @Topgrading protects their tweets but our request was approved). It’s hard, it takes a significant amount of time and it isn’t for the faint of heart. But when it is implemented effectively, what a company is able to find out about prospective candidates can sometimes be so overwhelming that it’s like the prisoner who steps out of the cave and walks into the Sun.

In the case of this Client, their existing interview process was really good. But it was designed to determine if candidates were cultural fits and didn’t really dig much deeper than the surface. When they were able to see the results of a full 4.5 hour Tandem Topgrading Interview that included personal challenges, a full career history and in-depth self-analysis and critique by the candidate around weaknesses and things that frustrated them, it was almost too much. Their old process would never have unearthed about 75% of what came out of the Topgrading process and, armed with this new information, they agonized over the final decision.

This all goes to show that Topgrading is really about the best methodology available today but it has to be adopted by an entire organization and not rolled out piece by piece alongside a rudimentary assessment and interviewing process because of how hard it is for people (Executives and Front Line Employees alike) to digest the stark differences that they must try to balance when making final decisions.

Tags: @hirebetter, @hirebetterceo, A-Player, A-Players, allegory of the cave, Brad Smart, executive level recruiting, Fame, Family, Fit, Fortune, Fun, hire better, hire better methodology, hire better systems, hiring, hiring manager, Interview, plato, recruit don't absorb, Recruiting, Scorecard, smarttopgrading, socrates, talent acquisition, Topgrading, topgrading methodology, TORC, wikipedia

29 Sep 09 | Interviewing, Recruiting, Topgrading | Read on | Comment (1)

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