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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)

5 Blog Posts of Significance [Motivation]

At the suggestion of Kristen Doyle, our Director of Strategic Marketing, I’m going to begin occasionally sharing some Top 5 Lists of great blog posts that I have read around certain areas of Recruiting and Retention that I believe will have a huge impact on you as a Leader.

With so much in the news today about worker productivity and its impact on the US and global economy, Motivation seemed like a very logical place to start. Add to it, the last 3 CEO’s that I’ve spoken with all listed “Self-Motivated” as one of the most important traits that someone possess to be successful at their company.

What do you think about these? Have I missed any? Please comment or send me an @Reply on Twitter so that your fellow readers can benefit as well.

Animated Video about Motivation 3.0 – a few months ago, Henry Sauer of Rackspace sent me a copy of Pink’s new book DRiVE and when I read that cash bonuses have the same impact on the brain as cocaine, I started to really pay attention. If you’re not into reading books, this 10 minute video is a great summary.
If You Want Performance, Give Intent – Simon Sinek has been talking about Purpose-driven organizations and the impact it has on motivation and productivity. This post shares a military story about trust and accountability that will really cause you to think.
Dave Kurlan’s 5 Ways to Motivate Salespeople – from encouragement to demands, this one’s short but powerful.
The Significance of Purpose – A short blog post that references a much longer study completed at Wharton that confirms just how powerful a purpose motive actually is.
Zappos CEO’s Letter to His Team – his open, honest answers to all of the questions that the employees were asking of each other are a great example of how you should communicate to encourage productivity as opposed to the alternatives.

Tags: daniel pink, Kurlan, motivation, Objective Management Group, simon sinek

28 Sep 10 | Employment, Retention | Read on | Comments (0)

What You Know About Motivation…Is Probably Wrong

If you’ve read this blog for any length of time you’ll know that the impact of incentive-based compensation on recruiting and retention is something that I’m both passionate and opinionated about. I’ve often referenced Dave Kurlan as being one of the top thinkers of our time with regards to sales-based compensation. But only a small portion of the typical company’s workforce is their sales team.

People in Sr. Leadership and Human Resources are likely familiar with the studies that have come out about how, on a list of the Top 10 reasons why people take or stay in a role, money typically ranks 9th or 10th. Thanks to Henry Sauer (the Dean of Rackspace University), a friend who I’ve recently had the privilege of getting to know better, I received the book DRiVE. He sent it to me because it had a profound impact on him and the way that Rackspace is working to retain their culture of “Fanatical Support” as they continue to grow.

I began reading this book as I was on a plane last week headed up to visit with a client in the Boston area and recognized quickly that this was going to be a page-turner but its information was not going to be easy to digest (and even harder to implement). On the same flight I read a new report that Dave Kurlan just released about the tenure of salespeople and how tough it is to retain them.

I wanted to share some snippets of both the book’s most compelling findings in its first 100 pages as well as interesting things from Dave’s white paper.

From Dave & The Objective Management Group:

My most recent study and analysis has shed light on some of the characteristics that determine longevity, or to use a more familiar concept, turnover prevention. Turnover, whether voluntary or involuntary, occurs when one party, either the employer or employee, is unhappy with the other. More often than not, the turnover is voluntary, and the employee resigns when income, culture, degree of difficulty or management practices are not to the salesperson’s liking. Involuntary turnover occurs less often because most sales managers are too patient, accept mediocrity, and avoid confrontation, especially a potentially uncomfortable termination.

We live in an era where employees no longer remain with a company for most of their lives. It is not unusual for a younger employee to work for several companies before they turn 30. Today, turnover is inevitable and when you consider the unique dynamic of the odds of a salesperson succeeding, the risk of expensive turnover increases dramatically.

He goes on to talk about the 5 Factors that he’s identified that are the leading indicators in predicting longevity and success for a salesperson:

Figure It Out Factor (FIOF): In the case of retention, those who achieve overnight success tend to look for the next challenge more quickly than those who are slow and steady. Showing these talented salespeople a career path with growth opportunities, more responsibility, and promotions can offset the risk of losing “A” players too quickly.

Sales Quotient (SQ) [Author's note: the proprietary score assigned to a candidate based on the OMG pre-hire assessment test]

Supervision: Sales Managers must be able to effectively coach, mentor, motivate, challenge and develop these salespeople to increase their levels of success and earnings.

Experience: Salespeople with experience – at least 5 years – are much more likely to be retained for 5 years than salespeople with less experience.

Compensation: Salespeople who are compensated mostly by commission are twice more likely to be retained than salespeople who are compensated mostly by salary.

When you consider that salespeople are often classified as “wired to sell”, incentivized to chase deals/revenue and are often have the opportunity to earn uncapped income when they are successful dangled before them, it’s easy to think that it is because they are motivated by money. However, after reading DRiVE, I don’t believe that it is necessarily the money that is motivating them.

Here are some examples of why (taken directly from Daniel Pink’s book DRiVE):

*Author’s note: Mr. Pink references “Motivation 2.0” throughout the book. Motivation 2.0 is defined as follows: 50,000 years ago we were trying to survive as a species. Our motivations were obtaining food, running away from saber-toothed tigers and copulating – an early operating system called Motivation 1.0. As humans formed complex societies that required cooperation to get things done, M.1.0 was inadequate because it was based purely on biological drive. We developed a second drive: to see reward and avoid punishment more broadly. Motivation 2.0 was based on the theory that the way to improve performance, increase productivity and encourage excellence was to reward the good behavior and punish bad.

The trouble is that Motivation 2.0 assumes we’re the same robotic wealth-maximizers I was taught we were a couple of decades ago. Indeed, the very premise of extrinsic incentives is that we’ll always respond rationally to them. But even most economists don’t believe that any more. Sometimes these motivators work. Often they don’t. And many times, they inflict collateral damage. In short, the new way economists think about what we do is hard to reconcile with Motivation 2.0. What’s more, if people do things for lunk-headed, backward-looking reasons, why wouldn’t we also do things for significance-seeking, self-actualizing reasons? If we’re predictably irrational – and we clearly are – why couldn’t we also be predictably transcendant?

Bruno Frey, an economist at the University of Zurich, has argued that we need to move beyond the idea of Homo Oeconomicus (Economic man – the fictional wealth-maximizing robot). He suggests that the new model is Homo Oeconomicus Maturus (Mature Economic Man). He says that this figure, “is more ‘mature’ in the sense that he is endowed with a more refined motivational structure.” He goes on to write, “Intrinsic motivation is of great importance for all economic activities. It is inconceivable that people are merely motivated solely or even mainly by external incentives.”

Consider, the revelations that he revealed above were within the first 30 pages of the book. Fortunately, he’s got another 185 pages beyond this that continue to drive home his point. I’ll be blogging more in the future about many of his theories and also attempting to integrate them into the HireBetter Team’s culture and performance-centric environment. For now, if you’re not ready to go out and buy the book, I’ll share with you one other area of thought that, for me, was when I began to realize he was really on to something and that nearly all employees, even salespeople, are being motivated to perform and produce for reasons that aren’t monetarily driven. Rather, monetary reward becomes the proverbial “cherry on top” that is the result of the intrinsic motivational factors that pushed the employee to perform.

“An object in motion will stay in motion, and an object at rest will stay at rest, unless acted on by an outside force.”

Newton’s first law of motion is elegant and simple – which is one of the reasons why it is powerful. Everyone can understand it. Motivation 2.0 is similar because at its heart are two elegant and simple ideas:

Rewarding an activity will get you more of it. Punishing an activity will get you less of it.

Newtonian physics runs into problems at the subatomic level. Down there – in the land of hadrons, quarks and Schrodinger’s cat – things get freaky. The cool rationality of Isaac Newton gives way to the bizarre unpredictability of Lewis Carroll. Motivation 2.0 is similar in this regard, too. When rewards and punishments encounter our third drive, something akin to quantum mechanics seems to take over and strange things begin to happen.

Of course, the starting point for any discussion of motivation in the workplace is a simple fact of life: People have to earn a living. Salary, contract payments, some benefits, a few perks are what I call “baseline rewards”. If someone’s baseline rewards aren’t adequate or equitable, her focus will be on the unfairness of her situation and the anxiety of her circumstance. You’ll get neither the predictability of extrinsic motivation nor the weirdness of intrinsic motivation. You’ll get very little motivation at all.

But once we’re past that threshold, carrots and sticks can achieve precisely the opposite of their intended aims. Mechanisms designed to increase motivation can dampen it. Tactics aimed at boosting creativity can reduce it. Programs to promote good deeds can make them disappear. Meanwhile, instead of restraining negative behavior, rewards and punishments can often set it loose and give rise to cheating, addiction and dangerously myopic thinking.

Tags: daniel pink, Dave Kurlan, drive culture, generation Y, motivating employees, motivation, Objective Management Group, recruit don't absorb, Retention, Scorecard, talent acquisition

17 May 10 | Compensation, Employment, Retention | Read on | Comments (8)

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)

Process, Interviews and Urine

I had a few other topics that I was debating about writing on this week until I saw what Dave Kurlan had written in his blog and I realized that nothing I could write would be better than what he had come up with. Because of that, this week’s blog post is shamelessly & largely stolen from him. To read more about what Dave has to say about sales teams and recruiting, check out his blog. It’s good stuff.

****************

It was quite the claim. I remember telling my client that the next candidate we were to interview was the best sounding candidate I had ever spoken with on the phone. Robert, the sales manager, went to the lobby to get the candidate and returned, an ashen look on his face. Ray, the candidate, followed Robert into the conference room and suddenly, I had the same ashen look on my face. It seemed that the best candidate I had ever spoken with by phone was, well, a bum!

They say you make an impression in the first 5 seconds and if the first impression was horrible, it was a huge understatement. Here are just some of the things we noticed:

he had a paper bag with a bottle in it
his white shirt had yellowed
he was completely wrinkled – not a wrinkled face, but a suit that was wrinkled so bad it could only have occurred from sleeping in it – on a park bench – on multiple nights
he stunk – not like Yankees stink or Red Sox stink, but as if he had urinated on himself
his hair had not been combed – or washed – for days, maybe weeks
his clothes didn’t fit

The funny thing was that when we began to interview him, if you just closed your eyes, you would have heard the most pleasing, helpful, nurturing, lucid, quick, humorous, effective, competent salesperson you could imagine. And since this was an inside sales position…

Even that was a beyond a stretch. You couldn’t even support the logic for Ray working from home – away from the other salespeople who could find him offensive because, well, he probably didn’t have a home.

So outside of this being a great true story, there are some lessons from it.

It doesn’t matter how good the candidate’s resume, track record and phone interview are. There is a reason for a face to face interview and that must go well too.
The purpose for a recruiting process is to filter candidates out – not the other way around
It doesn’t matter how much confidence you have in your interviewing, recruiting, and selection skills. You will still be wrong about people
Your gut instinct has its place. Recruiting and selection isn’t the place to rely on it.
Your eyes can’t be fooled. Or can they? What if Ray was just plain ugly instead of repulsive and homeless? What if he was disabled? What if he had a disease?
Candidates might not be as good as advertised but rarely will they be better than advertised.
There is a reason for sequenced, multiple steps in the process. Never deviate or take short cuts.
Just because the earlier steps in the process did not effectively filter out Ray, you shouldn’t assume that the process is flawed because of one miss. Always practice what works most of the time, not what worked or didn’t work once.
Be warned about making compromises. Would you have hired Ray, a great salesperson, if everything was normal – except for the bottle in the bag (could it have been orange juice?), or except for the hair (just a bad hair day), or except for the shirt (the others were at the cleaners), or except for the size of the clothes (lost a ton of weight and still losing)?
Never hire anyone that smells like he peed on himself.

Tags: Dave Kurlan, hire better, Interview, Objective Management Group, Recruiting, recruiting salespeople, talent acquisition, topgrading methodology

10 Jul 09 | Interviewing, Recruiting | Read on | Comments (3)

Why People Ask for References

If you’ve been reading this blog with any regularity you ‘ll know that I’m a big fan of Dave Kurlan. His blog and much of his company’s focus is on how to do a better job assessing sales talent before you hire them. What he also focuses a lot of his time on is making people better salespeople.

On June 3, Dave wrote a blog post entitled, “Salespeople and Requests for References“. He wrote the blog because a prospect he was hoping to sell his wares to asked him for references before they would agree to complete the transaction. It caused him to step back and analyze why someone would ask for references.

I read the post and gathered something entirely different from what he was hoping to get across. That was: this absolutely explains why a potential employer would ask for references as well! Geoffrey Smart, in the book WHO, suggests that 25% of what you’ll learn about someone will happen during the reference process. Even knowing that, when I surveyed a room of Entrepreneurs last week that I was talking with, nearly all of them admitted to hiring someone without ever asking for references and a full 100% of them said that they had, at least once, asked for references and then never called them.

Here are some of Dave’s points from that Blog Post. Do any of these apply to you as a hiring manager (in the context of the interviewing and selection process)?

Why would people ask for References?

they are skeptical of your claims or promises;

they weren’t referred to you by someone they know and trust;

they haven’t previously bought from your company;

they don’t understand what you sell;

it’s their nature to ask (they always do that);

they must invest more money than they had planned or feel comfortable with;

they want to learn what it’s like to do business with you;

they want to learn if there is anything to beware of;

they prefer to be sold by your references, not you;

they are simply using the reference request to put you off.

Tags: ask for references, Baseline Selling, Dave Kurlan, geoff smart, hire better, Interview, Objective Management Group, recruit don't absorb, Reference Check, talent acquisition, Topgrading, TORC, who the book

08 Jun 09 | Interviewing, Recruiting, Topgrading | Read on | Comments (0)

An Open Letter to The Staffing Advisor

I’ve watched a dialogue occur over the last couple of weeks between Brad Smart, the Author of Topgrading, and Bob Corlett who owns a recruiting firm in Washington DC and refers to himself as The Staffing Advisor for his Blog.

I’m genuinely concerned that by responding to the initial post of Mr. Corlett’s called, “What Exactly is a Top Performer?” Dr. Smart provided some credibility to what was written and provided an opportunity for this blog post to get some notoriety that it didn’t deserve. After reading Mr. Corlett’s rebuttal I simply can’t stay quiet.

Disclaimer: Topgrading is not a novel. Topgrading is not an easy read. Topgrading is not a page-turner. Honestly, Topgrading is about as dry as a piece of burnt toast without butter. With that being said, it’s still one of the best business books ever written.

Before I begin, I’m going to take a small tangent. The book Freakonomics sold more than 3 million copies when it was released 4 years ago. Buried within those pages was a chapter about the imperfection of the commission model for Realtors. It closely assessed the value of a Realtor’s contribution to the home selling process and found, in short, “the commission you pay your Realtor is in essence a big fat tip”.

I’ll complete my thoughts on why I’ve included this random snippet from Steven Levitt in my conclusion but I wanted to make sure I got that in on the front end to get you thinking.

On to the Open Letter…

I’d like to point out that I’m going to be jumping back and forth between both of Mr. Corlett’s posts on Topgrading (the second being his rebuttal) and his website. I’ll lead in with a direct quote as a precursor to that section to make it easy to follow.

Part 1

“I freely admit that I gave up and only made it halfway through [Topgrading] (worst beach read ever).”

“I found nothing that would help my clients make better hires, short of implementing a massive, formal, top heavy initiative to learn how to conduct a Topgrading interview. And that is simply not practical when you are hiring only one or two of each kind of person.”

I’ve grouped these quotes together to try to point out a very significant element of my counter to Mr. Corlett. If you’re [Bob Corlett] positioning yourself as an expert in the world of “Results Based Hiring” and you’re choosing to bash your “competition” in a very public forum, might it make sense to actually read the entire book before making blanket judgments and heavy-handed criticisms of a process and methodology that is proven to be wildly successful when implemented properly? You’ve lambasted every CEO who shares with you that they want to hire A-Players through Topgrading after admitting that you personally have an inability to finish the foremost book on the topic. Is this at all indicative of how you screen candidates whom you are considering presenting to your clients – that is, seeing a resume that is more than a page long, making a judgment after reading their address and then choosing to wholeheartedly endorse or count an applicant out?

Here’s the thing: if you can’t find a single item in this book to help your clients make better hires I truly doubt that you even read half of it. My guess is, you got to page 63, read the section about Search Firms and Brad’s suggestions on due diligence, and stopped.

Here are some examples of things that we have implemented and have helped our clients implement as well that we learned from inside the pages of Topgrading:

1. Take the time to build Scorecards. When we know what we’re looking for and then we can show the new hire what we screened them on and what we expect of them, the likelihood of their success (in our experience) improves exponentially. Interestingly enough, Mr. Corlett, you even mention this exact idea later in your blog when you said, “Here is a strategy that will dramatically improve both your results and the quality of your life: set performance goals [and] manage your people against the results.”* My guess is that you weren’t able to get far enough into the book to read that part.

2. TORC (threat of reference checks). We always check references but not the ones that our candidates are interested in giving us. We require and only talk to previous managers and we don’t let candidates advance in the process until that is finished. Geoff Smart, Brad’s son, suggests that about 25% of the information you learn about a candidate is obtained during reference checks. I think he’s right on.

3. Create a Virtual Bench. Jack Daly, an esteemed Public Speaker and former CEO is famous for saying, “It’s called RECRUITING, not ABSORBING”. We’ve got a list of people that we’re always recruiting and talking to in the event we need to hire them due to growth or turnover at HireBetter. Our clients do too!

Part 2

“In a job description you need to nail down exactly what you are looking for.”

“There is no universal set of attributes. It depends on the job.” “Most companies need a diverse mix of skills and work styles, but all with a common shared set of values.”

“Small organizations need to think hard, move fast, and make the best decisions possible with imperfect information.”

Really, I love Jack Daly. I bring him up again because I got to hear him recently and so much of it rang true. One of his favorite stories is about VISION and PLANNING. The story goes something like this:

Jack walked out of his house the other day and saw his neighbor filling his car with luggage. He was really cramming it in; filled up the trunk and then the back seat too.

Jack called out to him, “Hey, where you headed?”

“East!” his neighbor replied.

“How long you think it’s going to take you?” Jack countered.

“Quite a while, not sure really.” his neighbor shouted back.

“How much money you gonna need to get there?”

“Beats me, just hope I don’t run out!” said the neighbor.

I shared this story because I think that the next-door neighbor is a lot more like most small businesses than you could possibly imagine. Simply asking a hiring manager to write a job description when they have no experience doing it and hoping that they can “nail down exactly what they are looking for” is a lot tougher than it appears on the surface. Believing that your clients need to think hard and move fast while making decisions based on imperfect information as it relates to their hiring decisions is very, very dangerous. Not only does it adversely affect your ability to screen for the right kinds of people, it leaves your clients open to hiring based on “gut feel” and emotion instead of reality and strategy.

No, Topgrading is NOT easy. Neither is being an A-Player.

Part 3

“We’ll continue…developing faster, less expensive, less cumbersome ways to help our clients consistently hire people who will drive business results”.

There was a time when we thought about touting our speed to hire or cost per hire at HireBetter. Before we learned about Topgrading we were proud of our speed. Today, the focus isn’t on speed or cost at all. Rather, we focus on helping organizations change their methodology and expectations around hiring. We know that Topgrading has been effective when (1) our clients can hire the first or second person they interview – no matter what the role because the hiring managers know what they are looking for and (2) the employees perform as expected.

When Business Owners or Hiring Managers share with me that Topgrading is or was too hard it is almost always indicative of them being ill-prepared by not knowing what they actually want to hire or too reactionary in their hiring process (e.g. only thinking about new hires when someone leaves). As previously mentioned, these companies are simply absorbing new people, not recruiting them.

Part 4

“As someone who runs a search firm, I am also cognizant of the candidate perspective, which is generally not favorable toward Topgrading.”

Dave Kurlan, Founder and CEO of the Objective Management Group, has come up with the five major challenges that salespeople face and must overcome before they can be successful in sales.

The most significant of these challenges is something that he calls a “Need for Approval”. He describes it as, “Salespeople who have a high need for approval will avoid saying or doing the things which, in their mind, would change how the prospect feels about them. This includes asking tough questions, legitimate confrontation and the potential inability to handle rejection.”

At American Workforce we’ve actually had to screen out the Need for Approval from the people on our team who conduct interviews. Why? Our interviewers need to be able to interview with the clear understanding that it’s not their responsibility to make the candidates like them. Candidates don’t hire us – companies do. If the candidates can’t handle a company doing its due diligence and lose their temper or get easily frustrated, what does that say about how they will react under pressure in front of a client six months from now as an employee? Conducting Topgrading interviews takes focus and guts. Focus to stick with the plan and the guts to be able to ask the tough questions and not back off when someone gives a weak answer to a question because they either have something to hide or they’re too lazy to go into greater detail.

Conclusion

As promised, I want to finish my thought on why I included a whole paragraph about the commission structure of Realtors in the beginning of this Letter. When he really dug into it, Levitt found that Realtors aren’t really acting in the best interest of their clients. You can pretty easily figure out why when you consider the following:

-When they are selling a house their only incentive is speed, not getting the best price. They’re going to receive 3% of the sale price. To encourage a homeowner to reduce the cost of their home from $200,000 to $180,000 results in a net loss of only $600 to the realtor but they pick up a check for $5,400. The homeowner loses 10% of their value. If they [the Realtor] turn down a lowball offer and really stand up for the seller of the house, they risk not getting paid at all.

-When they are helping to buy a house, every dollar that they negotiate in savings for a buyer results in them making LESS money.

Here’s why I think this is so applicable to why nearly every recruiting company in America is denunciatory of Topgrading:

-If a company is paying a recruiter a percentage of the first year’s salary (akin to a Realtor receiving a percentage of the sale price), the ONLY incentive that recruiter has is to get someone hired quickly so they can avoid expending more than the minimum amount of effort. They are NOT incentivized to:

- ask tough questions

- conduct reference checks with past managers

- point out red flags on a resume or a career history form

-If a company is paying a recruiter to help negotiate compensation with a prospective candidate, every dollar they help the company save is costing them part of their commission.

Your recruiters should be partners with your company. Because they are truly incentivized against doing so, why should we expect any traditional recruiting firm, and especially ones like Staffing Advisors, to ever embrace the tenets of Topgrading?

Finally, Topgrading isn’t the ONLY way of recruiting and it can’t be implemented as an initiative from HR. It must be adopted wholeheartedly and with the full endorsement of every Executive inside a company. When this happens and it is implemented properly and executed on with precision, its results are staggering – no matter the size of the company.

*Geoff Smart & Randy Street released a little more user-friendly book entitled WHO in 2008. The quick and dirty version of their scorecard framework can be found on page 44.

Tags: @bobcorlett, A-Player, A-Players, ABdynamics, birthing of giants, bob corlett, bob costello, Brad Smart, build scorecards, career history form, chris mursau, conduct reference checks with past managers, Dave Kurlan, doug wick, EO Accelerator, geoff smart, high need for approval, hire A-Players through Topgrading, hire better, hiring, hiring manager, Interview, it's called recruiting not absorbing, jack daly, job description, jonathan davis, make better hires, MIT, Objective Management Group, randy street, recruit don't absorb, Recruiting, results based hiring, Scorecard, search firms, smarttopgrading, smarttopgrading blog, staffing advisor, talent acquisition, threat of reference checks, Topgrading, topgrading interview, topgrading is easy, topgrading is hard, topgrading is not easy, topgrading methodology, topgrading TORC, TORC, virtual bench, what exactly is a top performer, who, who the book

19 Feb 09 | Interviewing, Recruiting, Topgrading | Read on | Comments (7)

Scary Statistics on Salespeople

Adding to the previous thoughts on salespeople and how difficult it is to hire predictably in Sales, I was recently forwarded these statistics (based on assessing 350,000 sales candidates) that were produced by Dave Kurlan, the Founder of the Objective Management Group. You might want to be sitting down before reading this if you’re a Sales Manager. If you’re a business owner, definitely sit down!

24% of all candidates will not prospect – at all!
Only 1% of all hunters have the complete Hunter Skill Set.
Only 8% of all candidates could be considered Hunters (and don’t you typically hire salespeople to prospect?)

Why? Salespeople who dislike prospecting dislike it for a reason. They have beliefs and fears that cause anxiety and physical reactions to even the thought of prospecting. So some won’t do it at all, some will have difficulty getting started and some will have difficulty finishing.

45% of all candidates will not close – at all!
Less than 1% of all candidates have the complete Closer Skill Set.

Why? Salespeople confuse asking with getting. Most salespeople know how to ask for the business but very few salespeople know how to get the business when prospects resist. As with hunting, there are beliefs and fears that impact their behavior and when salespeople aren’t comfortable saying the words you’ve taught them, they substitute words that make them more comfortable. What makes them comfortable?

Presenting features and benefits, actions that don’t put their prospects on the spot, that don’t create stalls, put-offs, objections and excuses, that they absolutely don’t want to deal with.

Bottom line: unless you have a recruiting, assessment and interviewing process that really helps you identify what really drives a Salesperson you’re likely going to end up, “Interviewing and offering a role to Brad Pitt but Borat will show up for the first day on the job” (Thanks K. Scheible for a tremendous word picture).

Tags: Baseline Selling, Borat, Brad Pitt, Closer, Dave Kurlan, Hunter, Karl Scheible, Market Sense, Objective Management Group, Qualifier

14 Aug 08 | Interviewing, Retention | Read on | Comments (2)

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