Delivering the Systems and Expertise You Need to Confidently Make Great Hiring Decisions
Conor Neill, a close friend of mine and a prominent Entrepreneur in Spain, wrote this short story below for the Entrepreneurs’ Organization’s blog. It’s a great reminder of just how important attitude is in hiring.
Two men, Bill and Frank, begin working at a hotel the same day. They are intelligent, educated and ambitious. The manager of the hotel greets them and hands them both doorman uniforms. They are to begin opening and closing the doors, helping with bags, flagging taxis, etc.
Bill thinks “Doorman? I am worth more than this! I could manage this hotel better than the current guy.” But he doesn’t have an alternative offer and he needs the money, so he does the job anyway. He maintains a pained grimace on his face and deals with customers and other staff in a negative way because he is “better than this.”
Frank, in contrast, thinks “Okay, doorman. It’s not what I had in mind, but hey, I get to spend some time outside, get to meet the customers, and I’ll learn about how this hotel works.” He sets to work with a smile on his face and finds that he quite enjoys the small challenges he faces as a doorman at such a prestigious hotel.
After six weeks, a position at the front desk opens up, and the hotel manager immediately thinks of Frank. Frank is promoted and immediately brings his positive attitude to the front desk of the hotel. Several years later, Frank is the hotel manager. He leaves late one evening and there, opening the door with a hard-wired grimace, is Bill.
Is it luck, or is it fate? Bill will spend forever in a job that he hates and Frank will love every job that he is given. This story is such an inspiration, because it encourages me to always stay positive about my responsibilities and to find the reward in every remedial task. When hiring staff I spend more time exploring attitude and self-motivation than I do exploring capabilities. I also spend time looking to direct my employees toward challenges that are motivating for them.
When it comes to running a business, I’ve learned it’s not just about the results, but the work you put in. That’s where successful people thrive.
The story told of Icarus was his attempt to escape from Crete by means of wings that his father constructed from feathers and wax. He ignored instructions not to fly too close to the sun, and the melting wax caused him to fall to his death.
What in the world does this have to do with making better hiring decisions?
Simple: in order for Icarus’s wings to melt there had to be a sun. And in hiring, the sun means a lot more than you can possibly imagine.
I grew up in the Northeast (AuSable Chasm to be specific). Summers were exceptional! We had long days where the weather hovered around 80 degrees and the sun wouldn’t set until about 9pm. My sisters and I would play for hours in the river behind our house. I’d compete in baseball games that would start at 6 and end at 8:30 but there was never any need for the fields to be lit because the sun hadn’t set yet. The way I’m describing it you’re probably thinking to yourself, “that sounds like paradise.” For those couple of months a year, it was.
But with every ray of light there’s usually a dark tunnel.
For us, that was winter. It was dark when we woke up, dark when we got on the school bus and then dark again when we got out of school around 5pm. We’d literally never see the sun except through some windows as we walked from classroom to classroom. Add to that it was often so cold and overcast that you couldn’t go outside anyway. This kind of environment became oppressive to a lot of people (my Dad, for one). It wasn’t until just 25 years ago that people started recognizing what was happening. Wikipedia has this to say:
Seasonal affective disorder (SAD), also known as winter depression, winter blues, summer depression or summer blues, is a mood disorder in which people who have normal mental health throughout most of the year experience depressive symptoms in the winter or summer, spring or autumn, repeatedly, year after year.
Once regarded skeptically by the experts, seasonal affective disorder is now well established. Epidemiological studies estimate that its prevalence in the adult population of the US ranges from 1.4 percent (Florida) to 9.7 percent (New Hampshire).
The US National Library of Medicine notes that “some people experience a serious mood change when the seasons change. They may sleep too much, have little energy, and may also feel depressed. Though symptoms can be severe, they usually clear up.” The condition in the summer is often referred to as reverse seasonal affective disorder, and can also include heightened anxiety.
How can this knowledge help you as a Leader and Hiring Manager? Simple: Behavioral-based interviewing, when conducted properly, means you should avoid questions that allow someone to answer with their opinions. Whether or not someone has lived and thrived in “the North” or “the South” before should absolutely be part of your interviewing process. Just because someone says they’ve “Always dreamed of living in Seattle because they’ve heard great things” doesn’t mean they’ll be able to survive the lack of sun. The same goes for Austin – the summers are brutal and we don’t go outside much at all from late June until early September.
SAD is real. Accept that and use the knowledge to your advantage when making a critical hiring decision that will involve moving someone from one latitude to another.
On February 9th, 2011 I began this series on Discrimination with some thoughts on the reduced productivity of smokers.
I also started the conversation with this:
What I’m hearing from Business Leaders all over the United States is, “I want to hire US workers but their costs are too high for me if I end up hiring people who aren’t productive enough.”
During the course of this series on Discrimination I’m going to say some things you won’t agree with, may take offense with and that will border on legality. However, until employers ARE allowed to “discriminate” based on these things, the value of the US Worker will continue to decline (on average) and the fiduciary pressure to hire off-shore talent will be greater.
If I haven’t scared you away yet, here’s the next installment:
About a month ago the Comptroller of the State of Texas tallied the business costs of obesity. This is what they said, “Obesity is expensive for Texas employers, costing them $9.5 billion a year in worker health costs, absences, disability and reduced productivity.”
That number is nearly 3 times what the same office calculated it to be in 2007.
The report, Gaining Costs, Losing Time, estimates that Texas employers paid $4 billion in direct health insurance costs in 2009. Indirect costs included $1.6 billion for obesity-related work absences, $3.5 billion for reduced productivity of obese workers, and $328.1 million for disabilities linked to obesity.
$3.5 BILLION for reduced productivity in Texas alone.
In 2006, Leade Health published a report entitled The Business Case for Weight/Obesity Management Using Health Coaching Interventions.
They called Obesity “The Number One Factor in Productivity Loss”. The paper goes on to cite the following statistics:
- Medical costs for obese employees are 77 percent higher than for healthy weight employees; obesity-related disabilities cost employers up to $8,720 per claimant.
- Obese workers have the highest prevalence of work limitations, with 6.9 percent experiencing such limitations compared to three percent among normal weight workers.
- Obesity is estimated to account for 43% of all health care spending by U.S. businesses on coronary heart disease, type 2 diabetes, hypertension, hypercholesterolemia, stroke, gallbladder disease, osteoarthritis of the knee, and endometrial cancer combined.
Lastly, in August 2010 the Brookings Institute released a report that went even further than most people have ever been willing to go. It’s called Economic Impact of Obesity in US and it includes results like:
- There is a positive and statistically significant correlation between obesity and measures of absenteeism. Specifically, at a North American division of Shell Oil Company, 3.73 additional days of work were lost per year for each obese employee relative to their normal-weight co-workers.
- A similar report referenced in this same white paper was able to prove that employees considered at risk for obesity were 1.23 times more likely to be in the ‘high-absenteeism’ group than those who were not. That author (Durden) showed that obese workers were 194% more likely to use paid time off than their counterparts.
- In conclusion, the report found that the productivity losses to Shell Oil Company alone due to absenteeism effects of obesity were worth $11.2 million per year. This amount includes only the direct productivity costs of absenteeism (that the employee is paid while not at work); it does not account for any secondary effects on training, morale, or other network effects.
In closing and in defense of discrimination (especially based on the above facts): it is my opinion that obese workers should absolutely be considered inferior to their non-obese counterpart if the skill sets are on an equal level.
A couple of months back I interviewed Patrick Thean about the success he’s experienced in building scorecards for new hires. He provided some great suggestions of the metrics he’s used along with the real-life example of presenting a scorecard to a prospective hire to help her “opt out” of the interviewing process because she determined she wasn’t capable of the job.
- You failed (as the Hiring Manager) to clearly articulate what you needed someone to do
- You failed (as the Hiring Manager) to tell the new hire what you needed them to do
Having a scorecard is a HUGE first step in making sure that you’ve put in the time to define what will determine success for someone who’s just joined your team.
Last month (January ’11) I had the opportunity to meet Pepe Charles from MAP. He’s an expert in helping organizations develop what they call “VITAL FACTORS”. You won’t be surprised to learn that these vital factors are another name for…wait for it…scorecards.
I asked if they’d be willing to share their proprietary vital factors with you as readers of this blog. They graciously said yes and so you can find a very robust list of things that you can measure across departments and skill sets here.
The day that I heard Pepe speak about these vital factors he brought something up that really stunned me (and I was also a bit embarrassed for not having thought of it myself earlier). There’s a very high likelihood that you’ve heard of the acronym SMART for goals. It commonly accepted that the acronym stands for:
- S: Specific
- M: Measurable
- A: Attainable
- R: Realistic
- T: Timely
What Pepe suggested was that the A (typically referred to as attainable) should actually stand for AGREED TO. What a revelation!
In summary, I now have 3 reasons why someone you’ve just hired won’t work out:
- You failed (as the Hiring Manager) to clearly articulate what you needed someone to do
- You failed to tell the new hire what you needed them to do
- You failed to come to an agreement with the new hire on what they needed to do
[Author's Note: at no time during this series centering on Discrimination will I ever suggest or condone discrimination of anyone based on race, gender, nationality, religion, etc, etc.]
On February 7th, 2011, President Obama spoke to the Chamber of Commerce. One of the statements that he made in that speech was
“I understand the challenges you face. I understand that you’re under incredible pressure to cut costs and keep your margins up. I understand the significance of your obligations to your shareholders. I get it. But as we work with you to make America a better place to do business, ask yourselves what you can do for America. Ask yourselves what you can do to hire American workers, to support the American economy, and to invest in this nation. That’s what I want to talk about today – the responsibilities we all have to secure the future we all share.”
What I’m hearing from Business Leaders all over the United States is, “I want to hire US workers but their costs are too high for me if I end up hiring people who aren’t productive enough.”
During the course of this series on Discrimination I’m going to say some things you won’t agree with, may take offense with and that will border on legality. However, until employers ARE allowed to “discriminate” based on these things, the value of the US Worker will continue to decline (on average) and the fiduciary pressure to hire off-shore talent will be greater. I’ve chosen to focus my efforts on the characteristics of American Workers that reduce PRODUCTIVITY.
Part 1: SMOKING
Maryland-based Scotts Miracle-Gro, in March 2006, issued a new policy stating that they will not hire people who smoke on or off the job, and will seek to eliminate smoking in its existing work force.
Shortly after that they were sued for wrongful termination after a recently hired worker (Rodrigues) tested positive for nicotine. He had been on the job for 2 weeks. In December 2009 Scotts won the legal battle (in Massachusetts, no less).
Rodrigues’s lawyer, Harvey A. Schwartz of Boston, said he is appealing the ruling to the US Court of Appeals for the First Circuit. He characterized the firing as an extraordinary example of a company meddling in an employee’s private life in an attempt to promote healthy habits and drive down an employer’s healthcare costs.
Scotts was on the very bleeding edge of a new movement by employers to “discriminate” in the application process by making smoking an automatic disqualifier.
What justification did Scotts have for putting a ban like this in place?
- In Germany they were able to prove that healthcare costs for smokers was nearly 4x that of non-smokers and that costs due to work-loss days for smokers was over $16.4 billion DEM
- Tobacco Control, an international peer review journal that studies the impact of smoking determined that, “Current smokers had significantly greater absenteeism than did never smokers, with former smokers having intermediate values; among former smok-ers, absenteeism showed a significant decline with years following cessation. Former smokers showed an increase in seven of 10 objective productivity measures as compared to current smokers, with a mean increase of 4.5%. While objective productivity measures for former smokers decreased compared to measures for current smokers during the first year following cessation, values for former smokers were greater than those for current smokers by 1–4 years following cessation. Subjective assessments of “productivity evaluation by others” and “personal life satisfaction” showed significant trends with highest values for never smokers, lowest for current smokers, and intermediate for former smokers.
- LiveStrong’s studies have shown that smoking lowers the health of your body, which can lead to being sick more often — in fact, according to the Americans for Nonsmokers’ Rights, smokers miss an average of 6.16 days of work each year due to sickness. Nonsmokers, by comparison, miss an average of 3.86 days. In addition, 1.24 percent of smokers were admitted to hospitals due to their sicknesses, compared to 0.76 percent of nonsmokers, and the average length of stay for smokers was 1.44 days longer than nonsmokers, which contributes to time away from work.
- According to the U.S. Centers for Disease Control and Prevention, smoking and secondhand smoke cost an estimated $92 billion dollars annually to businesses in the United States. This works out to an estimated $3,391 dollars lost in productivity to each smoking worker, which is divided up into amounts of $1,760 lost in direct workplace productivity and $1,623 lost in costs related to medical expenditures. What’s more, nonsmokers can be affected by secondhand smoke — their costs can reach $490 per affecting smoker each year.
In closing and in defense of discrimination (especially based on the above facts): it is my opinion that smokers should absolutely be considered inferior to non-smokers if the skill sets are on an equal level. If America is going to become competitive again in the global marketplace, employers shouldn’t be scared of discriminating based on this vice of prospective employees.
Last week Major League Baseball was rocked by an incredible story that screamed “Blog About Me!”. Cliff Lee, an 8 year veteran pitcher who’s had the chance to play in Cleveland, Philadelphia, Seattle and Texas, was the most sought after free agent of the off-season. The Rangers, who had his services for a mere 15 starts (plus the post-season) were so enamored with him that they attempted to “break the bank” to keep him in Texas. The Yankees, who have more money than any other team and like to throw that money around, offered him the second most lucrative contract for any pitcher in the history of the league (second only to their other starter, C.C. Sabathia). Lots of other teams had visions of sugarplums as well thinking that they had a chance.
In the end, Cliff Lee shocked everyone and returned to Philadelphia. A “dark horse” that didn’t even show up on the radars of any of the sports writers, Lee accepted LESS money ($50mm less to be exact, from the Yankees) to come back and play with the teammates that he really liked.
“You can definitely sense the fact that these guys step up and are up for a challenge and rise to the occasion and come up big when they need to,” Lee said before the 2009 World Series. “It’s not just one or two guys, it’s everybody. It’s a special team. To win the World Series (in 2008) and be back just proves that fact. There’s a lot of confidence here. Everyone expects to be successful.”
His former (and now current) teammate Raul Ibanez did a nice job of reinforcing what Lee was saying:
“We have a bunch of guys who are not concerned with getting attention,” Ibanez said. “They just want to win and they don’t care if they get the credit for it. It’s amazing what you can accomplish when you have that mind-set, and that’s not by accident.
No one doubts that Cliff Lee is a special, special talent. What else can you deduce when a single guy shows up and changes a team’s entire track record? Some examples:
- In 2008 Cliff arrives in Philadelphia and they win their first Championship since 1983. They returned to the World Series in 2009.
- In 2010, after a mid-season trade, he arrives in Arlington and helps the Rangers reach their first World Series in Team History.
What can you learn from Cliff Lee, Philadelphia, Baseball and the Yankees? Culture really does make a difference. Below, I’ve included a video (one of many) that were created by people who LOVE this guy and are so excited to have him back in Philly – quite a different story from a place like NYC where the money’s great but the egos are huge, the spotlight is brighter and the pressure is exponentially stronger.
One other thought: Jack Daly shared with me that people who make a Career Change typically regret their decision twice in the first 30 days of being in the new role. If you had someone great who left your organization recently for more money or for more spotlight, you might consider calling them and taking them to lunch just to catch up. You just might be surprised how many times the grass wasn’t greener for them on the other side of the fence and, with just a bit of urging, they’d happily come back.
Author’s Note: The song that accompanies this video is explicit – and I’m not going to apologize.
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 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.
While it’s not necessarily scientific, the HireBetter Team has determined that there are two reasons why a new hire doesn’t work out: (1) You weren’t clear on what you needed someone to do OR (2) You failed to tell the new hire what they needed to do.
In Patrick’s experience, for a manager to get better at visualization within hiring as well as company leadership, they will find the most success in doing the following four things:
- Listen to what others have to say. Too often we are pushing people to listen to how we want them to do it. Instead, ask others “What does success look like? How would you view this journey? How will the person feel or look if they’re doing well?”
- Explain the exact outcomes you want to see. Then assess the work environment that you’ve got and be honest with how much time you can spend as a manager coaching and advising them.
- Walk through a single successful day with your new employee. What are the things that they might do that would drive you nuts that would cause you to want to jump out your window by lunch?
- What does success look like? What are the few things that you see as the few activities that new person will be engaged in that would make them successful? What makes YOU successful during your day that they’ll need to do?
For those of you who are old enough to have watched Michael Jordan in the 80′s & 90′s, you’ll likely remember the stories of him visualizing every shot before he would take them. This exercise isn’t nearly as hard as you think it is!
According to Patrick it’s unlikely you will be “spot on” during visualization. You’re probably going to make mistakes. But if you can explain what a successful day looks like for a prospective employee and they don’t like what they are hearing, they’re probably going to self-select out!
Patrick Thean is an award-winning serial entrepreneur who has started and exited multiple startups. He received the Ernst & Young Entrepreneur of the Year Award for North Carolina in 1996 and achieved a ranking of 151 on the Inc 500 in 1997.
An international speaker and the author of Execute Without Drama, Patrick has spoken to thousands of business owners on the topics of sustaining business growth, venture capital, and strategic exit strategies. He provides practical insights on building a culture of execution.
I read a few blogs on a very regular basis and this week I want to share with you a really great post from one of them. Conor Neill, on his blog The Rhetorical Journey, recently featured a video by Randy Nelson, the Dean of Pixar University, where shared how the PROOF of a portfolio is significantly more valuable than the PROMISE of a resume.
The things that you’ll read below are truly some of the most powerful tips that I’ve ever read or heard and if you’re in any kind of leadership capacity within a business, you absolutely need to read this at least once (and I’d encourage you to read it more than once) and then take the time to watch Randy’s video. This is incredibly insightful – I hope you agree!
- Depth (in any area) – Randy believes that the best predictor of ability to master any one area is if somebody has already mastered another area. It is more likely that someone who has achieved mastery in golf will achieve mastery as a Pixar artist or programmer than any set of pre-existing talent as an artist or programmer. Mastery requires discipline more than talent. Discipline requires humility. In the highly important NASA search for the astronauts to travel to the moon they were looking for mastery after some form of setback. They placed a huge value on people who had failed and recovered. In doing new things (buzz word “Innovation”) the key skill is “failure recovery”.
- Breadth - He says they look for interested people more than interesting people. People who are broadly curious rather than just “different”. The key question is does this person “amplify me”? Can this person take my ideas and return them with passion?
- Communication - Communication requires a process of translation. When a techie speaks to an artist she must speak in language that the artist understands. Randy says that nobody can be considered articulate, because the only success of communication is that the listener can say “I understand you”.
- Collaboration - This is far beyond simple cooperation. Cooperation is for assembly lines [e.g. Ford Model T production workers]. Knowledge work requries the ability for team members to amplify each other – creating truly connected human beings.
The video for this is about 10 minutes long and it’s worth the time. You can view it below.
In the Davis Household, the start of the NFL Season is always a momentous time for our family. As we’ve been watching HBO’s Hard Knocks (I’m a huge Jets Fan) and reading about the players’ reactions to having the coaches’ critiques of them being aired for everyone to see as well as how hard the coaches push the players to perform, it got me thinking about how this kind of situation applies to businesses that don’t employ professional athletes.
Specifically, a few months ago, in advance of the NFL Draft, there was a situation where a Wide Receiver from Oklahoma State was being interviewed by the Miami Dolphins and a General Manager stepped over the line. While interviews with management are very common before these Teams make their decision to spend millions of dollars, the reason this particular interview received so much press was because the GM asked Mr. Bryant, “Is your mother a prostitute?”
I’m not interested in debating whether or not this was a fair question.
Rather, I’d like to offer the following thoughts for you to ponder as a Business Leader:
One of the common complaints I hear from Business Leaders is that the process of Topgrading is too arduous to implement or, even more common, they question why an A-Player would allow someone to put them through filling out a Career History Form or go through a 4 Hour Interview. They challenge me by saying, “Other companies that want that person won’t ask them to go through all of these steps – won’t we lose the best talent if we ask them to do so much more than our competition?”
My belief is that this a simpler situation than many would make it out to be: it’s Economics 101 where you learn about Supply and Demand. However, it’s not supply and demand from the perspective that these aforementioned Leaders would think [that A-Players are in short supply and thus have high demand]. Rather, it’s whether or not your COMPANY is in demand and the SUPPLY of positions available are limited.
Everyone is aware of those companies that have such a great culture and reputation that they have thousands of people who want to get considered for each role – Companies like Google, Oracle and DELL back in the 90′s, Bazaarvoice here in Austin a couple of years ago.
With the NFL, so many young Athletes want to have a shot at “working” for a professional team that they are more than willing to subject themselves to the Combines where they are poked and prodded and then stripped down to their underwear and asked to sprint and lift weights. They take mental acuity tests (remember Vince Young 3 years ago?). Even in the college ranks, there are young men across the country who pay hundreds of dollars to attend “camps” at major universities where the instruction that they receive is secondary to their dream of getting “noticed”.
The ultimate question I would pose to you is: What are you doing to make your Culture and your Organization one where people people WANT to get in and they’re more than happy to go through an extensive Assessment Process (like Topgrading) with a smile on their face because they know that there’s a brilliant career opportunity waiting for them on the other end if they make it through?