Delivering the Systems and Expertise You Need to Confidently Make Great Hiring Decisions
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
- Voluntary Attrition
- Keep Smart (learning, furthering themselves)
- Employee Net Promoter Score
- Dry Powder
- Burn Rate
- # of Months of Cash (Runway)
- Quality & Bugs
- Supplier Mistakes
- Project Health Index (actual vs. plan)
- Sales against plan/quota
- Pinkie Report (Patrick’s idea for his sales team – if this deal doesn’t close I get your pinkie)
- A/R Quality
- # of days to Close & Report
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.
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.
I’ve just returned from the EO President’s Meeting in Dallas, TX and one of the biggest topics that they were discussing was the significance of delivering value to members. The major reason why value is so important: retention of members. Like most organizations and companies, acquiring a new member (or customer) is very expensive and time-consuming. It seems obvious that, once you’ve acquired them, retaining members should be a heavy area of focus for any leadership team. As the discussion continued it began to shift to the age of our members and the risks/rewards of eliminating the ceiling that is currently placed on new members.
I found myself sitting in this large conference room with 100+ other business leaders reflecting on the amount of preparation and time that had gone into evaluating this topic. The most amazing thought I had was that the collective revenues of these 100+ businesses represents the GDP of a fairly significant nation and this was the most important thing on their minds.
When EO was started just over 20 years ago, it was created for Entrepreneurs who were under the age of 40. When I joined EO 5 years ago it was called the Young Entrepreneurs’ Organization (YEO). At the time, the average age of a member was about 37. Today, the age limit of 40 has been eliminated and the average age of a member is now 41. To put it in a more simple perspective: every year that I’ve been part of this organization, the average age has gone up by 1 year. This is quite indicative of our entire population as well as a major challenge for businesses around the US.
Something we’ve been looking at a lot here at Hire Better is directly related to this particular topic. The area of focus for us: as businesses continue to grow and mature, they’re worried about the retention of their employees as well as the age of their teams. Jason Dorsey, widely known by the business word as the GenY Guy, has some incredible data points that he’s been publicizing to business leaders around the world. Here are a few:
- For the first time ever we have FOUR generations working together in the same workplace (GenY, GenX, Baby Boomers and “the Mature” Generation)
- The average life expectancy of a Baby Boomer is about 78 while the “retirement age” is still 65
- GenY’ers are the first generation in history that will likely need to WORK for 65 years (that’s retirement at 87-90 years old)
On top of these points, here are a couple of other really scary ones (if you’re a business leader)
- While Baby Boomers are finally comfortable with email and are actively learning about Facebook, GenY’ers aren’t using those mediums much any more because they’re cumbersome and/or they’re no longer “cool” now that their parents are part of the community
- GenY’ers believe that long term tenure in a role is 13 months. Baby Boomers want to give them employee reviews once a year.
- GenY’ers aren’t really motivated by money as a “carrot” the way most previous generations have been. Why? Because their parents (those same Boomers) have given them a credit card to pay for things like gas, groceries, vacations, etc.
Driving retention, loyalty and performance from the GenY population is becoming a real challenge for businesses around the US. This is a generation that is affordable and hard-working as well as passionate about their work but they can’t be relied on to work diligently from 8 AM to 6 PM every day. They aren’t interested in sitting in meetings to talk about the next meeting. And they’re no longer even “tech savvy” (Jason calls them “tech dependent” because they don’t have any idea how their smart phone works – they just know they can’t live without it).
What in the world are you supposed to do as a business when you wake up and realize that the future of your organization depends on leveraging this new population of workers that you can’t relate to? Here are a couple of quick suggestions:
- Accept that while Work/Life Balance is something that Baby Boomers dream about and GenX’ers talk about, GenY lives it. You won’t be able to keep them around if you expect them to sacrifice their friendships and social time. Create a workplace that inspires them and encourages hard work in short spurts and then downtime to go “be a kid”.
- Let them work in teams as often as possible. This is a generation that was raised playing soccer, baseball and other team sports starting at age 3. They were on tournament teams starting at age 8. When then went to these tournaments, even if they finished in 8th place they all got trophies. If you’re asking them to work solo and independently without praise, they’re not going to stay engaged.
- Start with the outcome and then work backwards to to talk about the steps. This is counter-intuitive to the way most people are used to teaching and also to how our educational system has educated every generation for the last 5 generations. By starting with the big picture and driving universal awareness of the challenges, GenY will embrace the challenge and buy-in to the goals instead of zoning out at step 4 of a 200 step process.
- Give employee reviews all the time – 10 minute check-ins every week or two are significantly more powerful than an annual review. Let this new generation know what they are doing right, give them praise, offer corrective actions and make minor adjustments all the time instead of hoping they’ll be around for their 1st annual review.
Doing a quick search in Google for “common interview questions and answers” will yield you 25,100,000 results.
I’m not sure what’s more surprising: the results or the questions that people typically ask in an interview?!
A few years ago, I had the unique opportunity to join an organization called EO. One of the first things they require you to do upon joining is go through a full day of “Forum Training” in which you get interested to a bunch of fellow Entrepreneurs and you also learn how to no longer offer opinions or advice. It really messes with your head – even today, after 5 years of practicing, I still find myself struggling to avoid hearing a challenge a fellow member is having and not offer feedback based on my opinions. As a society it’s present in our lives from the moment we can crawl and reach out for things like power outlets, hot stoves, etc. ”Don’t touch that!” we yell as parents. Yet, as our children get older and ask, “Why not, Daddy?” it’s sometimes hard to justify why we told them not to do something.
…focuses more on process (what is happening) than content (what is being discussed). The emphasis is on what is being done, thought and felt at the moment rather than on what was, might be, could be, or should be.
Gestalt therapy is a method of awareness, by which perceiving, feeling, and acting are understood to be separate from interpreting, explaining and judging using old attitudes. This distinction between direct experience and indirect or secondary interpretation is developed in the process of therapy.
Put more simply, by sharing my experiences and how I reacted to a situation that previously happened to me is much more valuable to a colleague than what I would do if I were in their shoes at that moment. In other words: opinions are worthless.
Mary Schmich wrote an OpEd piece in the mid-90′s titled “Advice, Like Youth, Probably Just Wasted On The Young”. In that was a very appropriate quote:
Be careful whose advice you buy, but be patient with those who supply it. Advice is a form of nostalgia. Dispensing it is a way of fishing the past from the disposal, wiping it off, painting over the ugly parts and recycling it for more than it’s worth.
To bring this idea back to the focus of this blog, how to help you HIRE BETTER, I’d offer the following random questions from that Google Search of 25,100,000 results:
- What’s your biggest weakness?
- What motivates you to do a good job?
- How are you when you’re working under pressure?
- Are you a team player?
- How long would you expect to work for us if hired?
Can you guess the common theme in every one of those questions?
The answer: EVERY ONE OF THEM CAN BE ANSWERED WITH AN OPINION
One of the ways that we’ve made our process so consistent and effective is that we don’t allow people to share their opinions in interviews. Opinions in an interview are, simply, worthless. As a hiring manager you’ll find that you’ll have a LOT more success if you are asking questions that require someone to share with you how they behaved in a situation. We actually use a lot of the questions from the book Topgrading to assist in our evaluation of talent. Here are some examples:
- What are a couple of the best and worst decisions you have made in the past year?
- Describe a situation or two in which the pressures to compromise your integrity were the strongest you have ever felt.
- What are examples of circumstances in which you were expected to do a certain thing and, on your own, went beyond the call of duty?
- Describe a complex challenge you have had coordinating a project.
- When was the last time you missed a significant deadline?
Upon review, what do all of these questions have in common?
They require the candidate to answer based on their experiences.
The Bottom Line: if you’re asking questions in an interview that allow for someone to offer their opinion, there’s a high likelihood that they’ve been to a lot of the 25,100,000 websites that Google returns when you go hunting for common interview questions and how to answer them so you sound like a superstar. But for job-seekers, there isn’t a single website they can go to that will give them the answer to a question that requires them to share their past experiences.
While there are a lot of people who will argue that past experience is NOT the greatest indicator of future success, you, as a hiring manager, often have the choice of either relying on those past experiences or listening to someone’s rehearsed answers and opinions instead.
Tags: A-Players, advice, Advice is a form of nostalgia, behavioral-based, Brad Smart, career history, chris mursau, EO, hire better, hiring manager, Interview, Scorecard, smarttopgrading, talent acquisition, Topgrading, topgrading methodology
Hanging out with Early Stage Entrepreneurs is about my favorite thing in the world to do. For the past 18 months I’ve been actively involved in EO‘s Accelerator Program which is dedicated to helping companies between $250k-$1mm grow faster and more efficiently through peer to peer learning, introductions to advisors and facilitated learning opportunities.
This morning I got the chance to share some of our best practices with the Portfolio Companies of Austin’s newest Incubator: Capital Factory. (If you’re interested, you can follow them on Twitter: @capitalfactory). I find it exhilarating to spend time with new companies and brilliant minds and I’m proud to have American Workforce be a supporter of this organization. This morning we focused on how each and every one of their companies has a chance to do things right – right from the start. None of them have started to hire employees yet but each of them has the plan to in the very near future. We talked about a number of strategies and the ways that they can make their companies attractive to top talent without having to spend a lot of money. But what I really challenged each of them to do was to analyze their Virtual Bench, build a repeatable screening process that gets to the point of what they need to find out about someone before hiring them, and thinking about the candidates’ perspectives when they are considering joining these new companies.
There were FOUR main questions that I asked them to really think about as we were wrapping up. If you’re a Business Owner, aspiring Entrepreneur or Manager, you should be thinking about these questions too:
- What is the first impression we provide to prospective A-Players when they come on-site to meet us?
- If we’re interviewing an A-Player and everyone knows it, are we willing to make our decision on the spot? If not, what else needed to happen during screening to make us comfortable and confident?
- Have we acknowledged the spouse or significant other and included them during the recruiting process? How could we?
- Are we ready to have new A-Players on our team? Can our management style challenge them so that they’ll stay and thrive in our company?
And the BONUS Question: Are we comfortable hiring people that have the potential to take our position?
Sure, Topgrading is tough to implement. But in the 2 years that I’ve been involved with it, I’ve found that it’s the questions above that impair companies and limit the effectiveness of the process more than conducting 4 hour interviews or executing on TORC. What are you doing in your company to Hire Better?
Tags: @capitalfactory, @joshuabaer, A-Player, A-Players, aspiring entrepreneur, Austin, capital factory, chris mursau, emerging entrepreneur, EO, EO Accelerator, Fame, Family, Fortune, Fun, hire better, hiring, Interview, job description, josh baer, recruit don't absorb, Recruiting, Scorecard, talent acquisition, Topgrading, topgrading methodology, TORC, Twitter, virtual bench, who the book
For the past 2 years I’ve been fortunate to be involved with something called the Accelerator Program. Established by the Entrepreneurs Organization, the Accelerator Program was built around educational content focused on four key issues faced by first-stage entrepreneurs: strategic planning, sales & marketing, people and finance. Unlike Business Schools or Government Programs, the Accelerator Participants learn from actual Entrepreneurs who are running their organizations day to day and have businesses that are over $1mm in Revenue (less than 4% of companies in the US ever attain this level).
In July, my role as the CHAMPION for Central Texas (essential the Chairman of the Program here in Austin) expires. My Champion-Elect, Jeffrey Stukuls, will take over. I’ve been working hard on a transition plan and wanted to be sure that I had:
- Chosen the right person for the position
- Assessed them on the skill sets and competencies needed to be successful
- Clearly set expectations so that they knew both (a) what success meant and (b) what was expected of them
As I was going through all of this I had one of those light bulb moments of clarity. I thought, “Why not create a Top Accountabilities document like we do for our clients here at Hire Better?” In case your not familiar, the Top Accountabilities idea was established by Dr. Brad Smart in his book Topgrading.
It’s funny that this kind of idea never struck me as being a solution before but when you really think about it, when have you ever gotten something as simple as a Job Description for a Volunteer role that you had?
Because this blog post wouldn’t have that much meaning unless I showed it to you, I asked Jeffrey if he would mind if I published the document. Hope you enjoy it! Click HERE and it will open in a new window.
Tags: A-Player, A-Players, Accelerator Program, Austin, Board, Brad Smart, business school, central texas, Champion, Champion-Elect, chris mursau, competency, competency library, comptencies, Entrepreneurs, Entrepreneurs Organization, EO, first-stage entrepreneurs, Interview, Jeffrey Stukuls, job description, non-profit, revenue, Scorecard, Top Accountabilities, top accountabilities document, Topgrading, topgrading methodology, volunteer, what success means, YEO