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All right, let’s get started.
Hey everyone, my name is Andrew Warner. I’m the founder of Mixergy.com, home of the ambitious upstart. About 700 entrepreneurs have come on here to tell you their stories, teach you what they learned along the way so that you can do this. Take their best ideas, their best lessons, use them in your business. Build it up and then hopefully come back here and do an interview where you teach other people how you did it.
We always have a focus for the interview. Today’s focus is how do you recruit A players who already have success in their DNA? Jeff Hyman is the founder, actually. Jeff Hyman, first of all before I tell you the company he founded, I want to tell you that he was named the matchmaker by Inc. Magazine. He directly hired and placed over 1,000 employees. He ran four recruiting companies and built one of the first online recruiting websites. You know he’s the right guy to turn to if you’re going to learn how to hire A players.
Today he’s the founder of Retrofit which helps people lose at least 10% of their body weight and keep it off for over a year. Jeff, it’s good to have you on here.
Jeff: Thank you, Andrew, great to be here.
Andrew: You made a mistake early on in your career that was painful. I’d like you to start off by sharing that pain. Can you tell us about the CFO and what happened with him?
Jeff: Yes. I have no shortage of mistakes so we can start with this one. This was, I was about 25 and living in Silicon Valley. It was the first company I had started. I’m now on my fourth but back at the time we had just raised a good amount of venture capital. My Board of Directors was pushing me to hire our first CFO, Chief Financial Officer. Which I had never done before. This was my first time hiring a big heavy weight CFO.
I probably made every mistake in the book. From not seeing enough candidates to not knowing exactly what I wanted. Not recruiting an individual with the right DNA. I really focused on the resume, as many people do. Here was an individual who had taken a company public in Silicon Valley and sold two companies. We hired him.
It probably was two weeks, four weeks into it that I realized that we had made, or I had made a huge mistake. Getting it resolved, getting him out of the company, back filling him with a replacement I lost a lot of credibility with the Board of Directors. We lost a lot of time and momentum. I wasted many, many hours. It was a real egg on my face experience. It enlightened me to the challenges of recruiting. Especially in a place as competitive as Silicon Valley.
Andrew: You know what’s interesting to me about this? Everything seems right. I was taking notes as you were talking. The guy took a company public already. He sold two companies in the past. On the surface everything seems fine. You’re not someone who just says I need a body. I need a CFO because I was told I need one so I’m going to go pick up anyone off the street. You did a lot of the right things but it wasn’t all right.
We’re going to learn some of the mistakes that you made and how you avoid them today. What I’d like us to do as we learn from you is figure out how we can hire the right people. It’s so easy to say you know, it’s time for me to hire a CFO, or a CTO, and you just go on and you say ‘the company’s public, great, I’m going to hire this guy, everything will be OK, he’s going to take on all my problems for me. All right, but you did eventually figure it out and we have lots of success stories we can talk about including the one at, well, can you tell us the biggest success story, where was that?
Jeff: In terms of recruiting?
Jeff: Probably this was many years later, so, probably ten years after that story, I led sales and marketing for a company called Ameritops [SP]. This was a private equity owned company that had raised VEC money and was just not executing. Great product, terrible sales alignment. They brought me in to basically rebuild the sales force, and I had to part ways with 80 percent of the sales reps, and literally rebuild it from the ground up and hire all new reps. And we got it on track, and I think to this day most of that was because I did a lot of the things right in that case. It all comes down to people. There’s start-ups, and start-up ideas are just a dime a dozen, but when you get the right people, that’s what makes the difference.
Andrew: What happened to revenues after you changed this whole sales department?
Jeff: Revenues doubled within 12 months, profitability tripled within 12 months. Most of the reps are still with this company so they succeeded in tenure, and the company’s gone on to do great things, they actually just raised a bunch more money.
Andrew: All right, that’s the kind of results that I want to deliver to our audience. And, we decided in this interview that we were going to give people specific tactics. From your experience, you pulled out what worked for you and we’re going to impart it to the audience so that they can hire people who deliver the kind of results that you got. I mean, tripling profits within 12 months doesn’t happen easily. I want to know how you did it. So what’s the first big tactic?
Jeff: So the first thing that I’ve learned is you can’t be half-pregnant on this. You either commit to hiring and doing it the right way, or frankly you’re better off flipping a coin as I did with that CFO. And you’ll save yourself a lot of time, and you’ll get a butt in the seat, and you can get a warm body very quickly. There’s not much room in-between.
Andrew: What do you mean by commit? How much am I committing to?
Jeff: You’re committing to investing serious amounts of time. That said, this time will be saved many, many-fold down the road, because when you build an organization, and recruit the right people, you build a healthy culture, you recruit people who can make decisions, who can be empowered, who don’t need to be motivated. I fundamentally have learned that you can’t motivate someone for the long term. And so you’ll save a ton of time later, as a manager, as a founder, CEO. But it is time up-front. It can be dozens and dozens of hours to recruit for just one individual.
Andrew: Wow. So we’re talking about say, one of the salespeople at Ameritops, how many hours would it take you to hire the right salesperson?
Jeff: So, designing the specifications, figuring out what it is you want can take hours. Hours and hours of phone screens, which we’ll talk about. Fifteen minutes a pop, you may be able to do those with 10 to 20, 30 people. A very thorough, digging interview, which can last two to four hours, with a few finalists. It can take you the better part of 30, 40 hours in total, for one position. But again, if you can get that one position right, it saves you much more down the road.
Andrew: All right, and if you get it wrong, you and I talked before this interview, and you said ‘Drew, if you get it wrong, you’re going to lose three times the person’s salary.’ Did I get that number right? Three times, and I was a little skeptical.
Jeff: There have been a bunch of studies that have been done, and when you drill into the cost, just a itemized cost of: ill-will with customers, recruiting the person’s replacement, severance cost, benefits cost, productivity cost, there’s all these itemized costs. It can easily come to three times that person’s annual compensation. So, for a hundred thousand dollar sales rep, you can be looking at a significant chunk of change for making a mistake, and when you think about it that way, you tend to hire more carefully. So every time I attempted to jump the gun and just get a button to see, I will remember that pain, and that amount of money, and slow down.
Andrew: You know, Jeff, I was going to say you’re scaring me, because now I see how dangerous it is to bring in the wrong person. And never mind that the really wrong person could end up doing all kinds of other damage to the business, but you’re saying just having the wrong person who needs to get fired and placed three times, with recruiting, with training, etc. It’s scary, but you . . .
Jeff: With start-ups it’s twice as bad, because not only did you hire the wrong person, but what I’ve learned, it’s, again, my fourth start-up now: the first 10 to 20 people make and define the culture of that company for years to come. So if you as a company get on the wrong track with the wrong people and the wrong DNA, that’s not an easy course correction, you could literally take a great idea and doom that company from the start, as go the first few hires, that you go with that company.
Andrew: All right. So now we got people’s attention, but we’re going to do more than just scare them with attention, more than just scare Andrew with stories like this. You’ve got specific tactics that people can take to really do this right. And, one of the first things you say is, you call it the DNA-based hiring trick of, well, what is it?
Jeff: Yes. So, I spent quite a lot of time reading studies about what has been identified as the key predictors of success. There have been a lot of studies on this, and as it turns out, the number one predictor of success is someone’s innate DNA characteristics. These are things that are hardwired very early in someone’s life, and they’re very hard to change. That’s things like drive, determination, persistence, curiosity, charisma. There’s things such as that, which will depend on the role. But the number one thing most people look at is work experience. So, the average founder thinks that well, if this candidate has worked for one of my competitors, they must be good. They just equate work experience, or the names of companies that people have worked at, or even the schools they went to. Those have actually been not great predictors of success, which we can talk about why, I’ve had to figure out why that is. So DNA, as it turns out, is just a phenomenal predictor of success.
Andrew: And when you, and by the way, that’s a mistake that I’ve made in the past too. I’ve seen, people come to me and say I’ve worked for your friend, and I think this is a friend who I respect, and it’s a guy who hires good people, and I’ll start working with them, and it just won’t work out for some reason. And it’s because whatever it is that my DNA is, you’re saying just doesn’t fit, or the DNA of my company?
Jeff: No. Your DNA, and your standards might be higher than your friend’s, that’s one. Number two: this particular situation might be different than his particular situation. So, what I’ve learned for example of hiring sales reps is, just because a sales rep has been successful previously does not mean they will be successful in this situation if it’s a different type of sale. So, you need to drill into things like how long was the sale cycle; who were you selling to; was it a transactional sale or a consultative sale; what was the average ticket size? Questions like that can really drill into you realizing the sales rep succeeded here and here is why, they may not be successful in my type of company.
Andrew: So how do I know what’s the right DNA for the person I’m hiring. And then how can I tell what their DNA is and whether it matches or not?
Jeff: So the trick that I’ve learned, which works well, is to think of the three people, if you’re an early-stage company for example, the three or so people in your company that you would say are clearly the perfect DNA. So these are your A-players, the folks to model. And PS, it doesn’t even matter so much what their roles are. And you think about those people, and try to identify the three to five common characteristics. These innate characteristics: they are driven, they are curious, they are relentless, whatever it might be. They work harder than anybody else. And you commit those to paper, and what you’ll quickly find is that those become a key part of the hiring criteria going forward.
Now if you’re a founder who hasn’t yet hired a team, that exercise becomes a little more difficult. You’re having to envision the people being successful in the company. But again, you want to start there, versus what most people do, which is start with what I want. Five to ten years experience selling enterprise software, or I want this or that. Those things are very secondary to DNA.
Andrew: All right. I’ve got a note here in. We’re going to give people a PowerPoint back that, I guess we’ll do it in PDF format, that has a lot of these ideas so that they can follow along. And one of the slides here is to improve from 50/50 to 80/20. What do you mean by that?
Jeff: So, a typical recruiting success rate is about 50-50. You might as well flip a coin if you . . . from many, many people that I’ve interviewed over the years, and books that I’ve read, about a 50 percent chance that the person you’ve hired is going to work out, for even a few years. It’s a pretty poor ratio. So, the best recruiter in history, right, we’d say is arguably Jack Welch, who’s kind of one of my heroes. He feels that you’ll never get better than 80/20. You’re never going to get it perfect, right, there’s just so much you can do in the interview process to reduce the risk. But there’s a big difference between 50 and 80. And so a process such as the one we’re talking about and focusing on DNA recruiting, etc., can improve that batting average, and that can make an enormous difference as a founder, for a company.
Andrew: I see. So Jeff, if I’m doing everything right, I still walk into an office with maybe five people, and one of them is not going to be the right fit. I hire five people over the next six months, and one of them I’m going to have to find a way to let go, or is going to say goodbye to me.
Jeff Right, and you want to commit to firing fast, hiring slow and firing fast, so it takes a lot of time to hire, but as soon as you realize you’ve made a mistake, the clocks are already ticking. It doesn’t mean you boot someone out on their tail, and it doesn’t mean you’re disrespectful. I’m not proposing those things, but keeping someone on board for a year, on the hope that they’re going to change or improve, is usually a delusion, and in the start-up can be a fatal mistake because when you have five people, all five need to be performing.
Andrew: I’ve made that mistake too because I feel like, ‘all right, I could afford to keep paying. Maybe there’s something wrong in me. I’m not the right manager. I’m not expressing what I’m looking for.’ What do you say to people who feel that?
Jeff: You know, it’s never an easy conversation.
Andrew: What do you say to entrepreneurs who think maybe I’m the one who’s at fault?
Jeff: What I say is, nine times out of ten, when I’ve had to part ways with someone, which I dread, it’s the worst, absolute worst day in business. Nine times out of ten, I say to myself, I wish I had done that sooner, and it’s just rare that you make…, you feel it so strongly in your gut, you had some question marks in the interview process that you got past and you plowed into it, and then four weeks in, just as with the Chief Financial Officer we talked about, I knew in my heart.
He was disorganized, he was not pro-active, his reports were not, you know, there were very clear warning bells going off and it didn’t take me long, but I probably waited two months longer than I should have, and that’s two months more pain that I endured, that the organization endured, and when we got rid of him, a number of people in the company said, ‘finally, what took you so long.’ They were kind of, you know, people are hesitant to say something to the founder, but they said, ‘you made the right call and I can’t believe you waited as long as you did.’
Andrew: All right, what’s next for us? We’ve decided, we’ve written down the three common characteristics of our best people, we understand our DNA, what’s next?
Jeff: So the next thing, which sounds so obvious, is to define what it is we’re looking for, the job profile or job spec, job description. You would be floored at how many times I see people hire someone, or ask me to introduce them to candidates, and I say, ‘sure, let me see the job spec.’ ‘Well, we haven’t quite put it down on paper yet.’ In other words, I don’t really know what I’m looking for. This is such an important process, that if you’re too busy to commit to paper for a couple of hours, what it is you’re looking for, you’re too busy to conduct interviews and go through this process the right way, and I tell people that and I refuse to help them and introduce them to folks I know from my network, when they don’t even know what it is they’re looking for.
Andrew: What should it look like? What is a job spec?
Jeff: There’s four key things that I’ve learned that need to be a part of it, and it doesn’t need to be long or sexy, but the four key things are, starting with the descriptions, so what is this person going to be doing every day. This is very important, especially in a start-up, where we’re thinking over the next 12 months, next 6 months, next 2 weeks, what is this person doing here every day, and when you really drill down into it, you’ll hear a software developer or a head of business development, those daily behaviors or daily activities can be very different, depending on the situation, so you’ve got to nail those.
The second is what does success look like, so how am I going to know 6 or 12 months down the road that I made a great hire and that this was a great fit? What metrics can we look at, what products will they have developed, what deals will they have signed, and really pushing yourself to quantify that as much as possible.
The third is competency, so this is basically the DNA. What competencies does a person need to have to set them up for success such as we’ve already defined?
The last thing is title, so I then come up with a title that is compelling, that can help sell the role, that’s a nice thing in start-up because you can be somewhat creative about the title. Most people come up with the title first and kind of go from there. I actually do that last. I kind of say, okay, what’s the description they’re doing every day? What are the competencies and what title is going to attract that kind of person? It’s a marketing tool.
Andrew: Titles are a marketing tool for finding the right people.
Jeff: That’s right. I mean look, there’s philosophies. There are companies that will say, and entrepreneurs that will say, ‘no, I’m very title conscious and I don’t want to disrupt the hierarchy,’ and all that stuff, and I get that. There’s other folks who will say, ‘titles are cheap, right? I can give them away. Everyone wants to be a Chief whatever officer,’ and I get both sides. For early stage companies, they tend to fall into the latter, especially in a difficult recruiting environment where hiring A players is as hard as it is, I’d say use everything in your arsenal and if it’s a title, give them the title. I try not to hire people that are title-conscious, but sometimes it’s just important to someone and so you’ll be flexible.
Andrew: I see, so I would just sit, I’d write down the description of what the person will do everyday. I describe what success will look like. Maybe, it’s closing five sales a day or five sales a month, or whatever it is, or producing five articles a week.
The competencies. What are the three to five DNA aspects that are required, and the title. Then what do I do with this?
Jeff: So, now you’ve got this spec, now you need to figure out compensation. So before you start talking to candidates, which can be a big waste of time if their comp is too high or too low, and we’ll circle back to that if you like. You’ve got to figure out how much you can afford to pay, and be realistic about that. The reason that’s important to do at this point is we’re looking for A-players, and I define an A-player as the top 10 % of all available candidates at the comp you’re able to offer.
So, if I’m able to offer $60,000, then I got to look at the top 10% who are willing to take this job for $60,000. If I can pay $100,000, it’s a different set of people. So it’s important to nail down as best you can, your absolute compensation limit. And then what I learned is, you want to be looking at folks that are typically 20%-25% below that. So this would be a meaningful move up, if it’s 20%-25%. If it’s about the same comp, then you have to figure out why would the person be motivated to take this role. There might be some other factors, but typically to attract you want to find an A-player at this level and bring them up to this level.
Andrew: Wow. So you were giving people essentially, a 20%-25% pay bump, just by walking in the door and committing to work with you.
Jeff: If they’re an A-player.
Andrew: If they’re an A-player.
Jeff: But if my comp is here, I’m likely not going to find an A-player here. Why would he or she make that move, unless they had a reason to?
Jeff: Typically, you’ll find an A-player here that’s ready to be called up, I think of it as calling a minor up to the big league. It’s really the same analagy, and for that person this is a fantastic move, they are thrilled to get this opportunity. If the person is at this comp, I worry, why are they taking it, and are they going to stay, and is this just a stepping stone or a move of desperation.
Andrew: I see.
Jeff: On the other hand, if they’re too low, say 50%, likely this is too big a step, I’m looking at folks that are just too junior for the position.
Andrew: How do you know what people have earned? I used to ask my employees when I was going through the hiring process what they earned. But I’m hearing a lot of people say that’s just not right, it’s not right for employees to say what they earn.
Jeff: So, when you’re in the recruiting process, you mean?
Jeff: I just ask.
Andrew: You do?
Jeff: Yeah, absolutely. Because you’re going to decide at this point, are you going to spend potentially hours and hours with this person, selling and recording and interviewing and reference checking, and for you to get all the way through the process, only to realize that they’re making $50,000 more than you can afford, I don’t have that time.
Andrew: I see.
Jeff: So, there’s certainly a way to ask. And I’ve learned that the way to ask, during the initial phone screening, which we can talk about is if I could convince you that this opportunity was significantly more attractive to you, both from a financial standpoint and another standpoint, is it something you might want to spend time talking about? Before I even ask the money question, and they’ll usually say of course. Why wouldn’t I? Say super, I really appreciate that. To save us both a lot of time, would you be willing to share with me, what you earned last year. And you’d be shocked at what percentage of people will answer that question without being insulted, look they don’t want to waste their time either. I rarely have people say, absolutely not, that’s an offensive question, it just rarely happens.
Andrew: Yeah. I’ve never had anyone say that they didn’t want to answer it, or they thought it was an offensive question. They understand that it’s part of the process. All right. What else did I want to know? Oh, you know what? I made a mental note to come back and ask you what RETROFIT, what kind of titles do you have? You said they use titles is marketing.
Jeff: Yeah. So RETROFIT is a new online weight loss company that we launched about three months ago. And, we tried to do things differently, as well. One position that we just started recruiting for, is an effectively, PR, public relations, or social media manager. But we really wanted to find a title that spoke to what we were looking for. So we’re calling it an Ambassador of Buzz, and that’s what we’re looking for. We’re actually in the process of interviewing folks right now for that position. And that title alone, I’m convinced resulted in us getting some candidates that we probably wouldn’t have gotten, had we called it a PR manager.
Andrew: I get that. Actually, Grasshopper had an Ambassador of Buzz, Jonathan Kay, and for some reason that title always stuck with me.
Andrew: And it made him feel like more than, and I didn’t know he was in PR until a long time afterwards. I got his thing, he’s there to help get people get excited about Grasshopper, which is what I guess some PR people do, but in my mind it was different. If I wanted to see what your current jobs opportunities are, to watch what you’re naming your jobs, where do I go? I’m on retrofitme.com and I don’t see a jobs button, do you have it one here?
Jeff: Yeah, they should be…
Andrew: Oh, there, no.
Jeff: I don’t have it in front of me but let’s see. At the bottom you’ll see careers.
Andrew: Oh, right. I was looking for the word jobs and didn’t, for some reason, think of synonyms. So, where were we before I sidetracked with this question? We were looking at a 25% increase, right? What’s next?
Jeff: So, the next step is to create a score card. Before you start interviewing candidates, you’ve got to figure out what it is you’re looking for and we talked about DNA so I’ll literally put together a grid of those three to five characteristics and then all the candidates were going talk to, this score card is something we rate one to ten some people prefer A to C or whatever. You’re using this because it’s vital in the recruiting process to compare and contrast candidates. I know that sounds obvious but when you’re going to cast a wide net, you need to quickly decides who am I going to spend my time with and if I’m looking at three candidates and clearly one is the bottom, they fall out and clearly one is the top and they get the 10, so a scorecard is very useful.
Also, it’s useful for having multiple interviewers. You frequently find, when I ran, for example a division of Highgerkenstuggle, which is a big search firm, our clients were not on the same page. So you’ll have three BP’s and none of them are looking for the same person and so the client can’t make the decision. When you drill into why not, it’s because they haven’t sat down and agreed on a scorecard and so it’s really important for the hiring manager and the interviewer to say “What is it we are looking for?” and commit that to paper.
Andrew: I’m looking at the scorecard now, wish we could just show this to people here during the interview but there going to have it in the PDF of this interview, and I always thought that it was smaller companies that did this because they didn’t know how to sort qualitative information about people who they met and so they found a way to make a quantitative, come up with a number for it. How, I’m guessing that if you’re doing, with your experience then, it does make sense and it’s not just a crutch that were using but how , for example, I’m looking the scorecard for the ambassador of Buzz, how do I know what to rate someone for relentless drive or master networker or ability to build relationships? And I understand that at the end of it you count, you just sum it all up and if someone else’s number and come up with a big number for each employee based on this potential, based on the scorecard but is that enough?
Jeff: Well, it’s never, that’ not the only piece but what you typically find with A players, is they score below an eight almost none of the time. So, your spending time with a candidate, interviewing them and then all the key DNA, they may be missing some other stuff but these must have DNA’s, they are typically either an eight, nine or 10 in virtually every one of them. Whereas other candidates will be threes and fives and eights, you know the ones and twos and threes that those are easy, right?
The challenge for most people is they settle with fives, sixes and sevens and the difference in productivity between a five, six and seven and a eight, nine and ten can be two to three times in terms of what more you get out of an A player so it’s worth holding out. I’ve kept seats open for months holding out for an A player and I’ve never regretted it because I didn’t have to clean up all and do all the damage control of sweeping out the B player that I settled with.
Andrew: At this point, maybe I’m just running away from the responsibility that you’re putting on my shoulders, but I’m thinking to myself, it’s a lot of work to find a A player. If I find someone who’s a B player, can I just say I’ll take them and train them to be an A player so that I don’t have to continue waiting for this spot that’s desperately needed to be filled. What do you of that?
Jeff: So, the answer’s yes and no. You can train for skills. So if it’s a developer who has less job and development skills then you might like, you can train that assuming it’s the manager, and by the way that’s a different course. But you can typically not train or change DNA. They are inherent characteristics that are long established. They’ve done studies that have found that these are patterns you nail down in your teens and they are probably not going to change barring any kind of any major life event. So if a master networker or just incredibly articulate or have a lot of drive, those are not things that are not typically trainable. You will die trying. You’ll be very frustrated because it just doesn’t happen.
Andrew: That’s a great point, it’s true, that if someone isn’t a networker, who loves networking, and you put them in, even with the best supervisor, who encourages networking, who can teach it, they can’t make that person come out of their shell and then become a great networker. All they can do is make them a few degrees better.
Andrew: And maybe in time they could get better, and they could become super, but that’s way more time then we have as employers.
Jeff: And, that’s the point, big companies tend to suffer with that person for quite some time. That’s also impossible, to get rid of people, when you are in a big company. Just getting rid of someone is just forms and forms. But as start-up you don’t have that time. A couple of months, a couple of quarters makes all the difference.
Andrew: Yeah. You had a situation at Retro-Fit, where you were hiring a VP of wellness, can you explain how the scorecard helped you there?
Jeff: Yeah. So, we recently hired this individual as a Vice President of corporate wellness. And he was, looking at his background now, very different then we had originally envisions as a candidate for the role. But, when we looked at him compared to this scorecard that we’ve been discussing of DNA, he nailed it. I mean, he was all nines and tens against these five DNA that we had established. –
And, it just goes to show, that it’s dangerous to have preconceived notions about the particular experience. Now, he had to chase me down, and he was very persistent. But, then a sales rep, you always want to see, in the recruiting process. And, he convinced me to meet, and we spent time getting to know each other. –
And, I quickly saw that my initial estimation was wrong and that his DNA was a perfect fit for the role. We hired him, he started three weeks ago, he’s off to a super start. A lot of companies would have said, from the resume, no, he’s not, kinda, what we’re looking for. They would have missed a great candidate.
Andrew: I’ve got to take a step a from this now, because I feel like you’re being so generous by doing this session. You’re not just winging it here, you spent a lot of time putting this information together, which I know the audience feels the benefit of. And, still, it doesn’t, what in it for Retro-Fit. What’s in it for you, running a new company, why are you being so generous with us? –
A lot of people who would be running a company like Retro-Fit would say, I’m going to do this interview and make sure that we keep plugging that we need developers because Andrew has developers in the audience. You’re not doing that, I’m looking at the notes here, that’s not coming up. Snap, let’s get, what’s in it for you?
Jeff: Well, I appreciate it, I’m a big fan of your program. I’ve watched many, many of the interviews and I’ve been fortunate enough to have some amazing mentors along the way. And I’ve learned a lot of these things the hard way and if I can help other entrepreneurs succeed, I advise a lot of start-up entrepreneurs here in Chicago, we’ve got a burgeoning tech start-up community here. And, I enjoy doing it, it’s kind of fun.-
But, what I’ve learned is, ideas are a dime a dozed, it’s all about execution of start-up and the biggest predictor of execution is having the right people. And, I’m just constantly amazed at how many founders and entrepreneurs jump from the idea to, just, kind of the end-game, not thinking about the culture and the team that, ultimately, is going to build a sustainable company. If that’s your goal, that’s not what everyone sets out to do, but I think a lot do. So., I just find this topic fascinating, and if people want to check out Retro-Fit as a bi-product, that’s fine too.
Andrew: I have to say that, first of all, thank you for doing this. And, we’re not nearly over, but I’m also someone who’s made this mistake. Where, when someone in the audience will say, Andrew, you didn’t ask what platform the entrepreneur built his business on, what language are they coding their site in. I do kick myself for not asking those questions, but no one has asked me, and I haven’t pushed myself to do it either, say, How did you hire people, how did you find that first person? How did you that culture that allowed you to know that the 101st person who was hired, who wasn’t even hired by you, was still the perfect fit, and I’m not asking those questions and you are reminding me of the importance of it.
Jeff: And, it’s very ironic, because we have this employment situation in the US, you know, 8, 9 to 10%. But, the war for talent, for A players, has never been worse. So, even here in Chicago, finding an A player software software developer or an A player sales rep, is brutal. And, Silicon Valley is even worse, from the friends I have there. So, to think that this doesn’t take work or effort, and it’s not something worth putting into, for a founder or CEO, I just can’t understand it.
Andrew: Alright, so we’ve put together our score cards, and people are going to get a blank copy of your scorecard, that they can look at so that they can do one for their company. And the next step is to start networking.
Jeff: Most people fall down with the internet. So, my first start up was an internet recruiting company, I helped pioneer that category and network recruiting is phenomenal, at the same time job board and internet recruiting are not the best way to find candidates, nor are recruiters. And as a former recruiter I can say that to, the best way to find people is networking. 80% of the time, when you recruit A players, it’s from your network, which also speaks to the importance of continuing to build your network, but it is what it is.
Someone in your network, no matter how small your network might be, likely knows an A player for this position and so few people rattle their network when it’s time to hire. They just post it or they hire a recruiter, which is very expensive. And so what I’ve found is that a trusted colleague will rarely introduce you to a bozo or a B player because it has their name on it. Right? So that referral comes with a lot of credibility and it also helps you find passive candidates, people who are not looking, which of course job boards don’t do. It’s faster; it’s cheaper so there’s just a bunch of benefits of finding a person through networking. Again, it takes time but with the internet now and LinkedIn and Facebook and email, it doesn’t take that much time to get the word out.
Andrew: Your head of marketing at Dyson Vacuums and you’re hiring a trademark person, how does networking fit in there?
Jeff: That was through networking, he’s still there, he’s doing a great job, and we found him through just an industry contact. So when it comes to networking I’m talking about colleagues your friends and family and board members, investors but also industry contacts so editors and writer, folks in the industry association, they will know who the top performers are. I specifically remember, in this case, I spoke to some industry experts and this guy’s name kept coming up and so I called him and said “Your names come up a couple times and I would love to talk with y you” and a couple months later he was part of the time. So this was five years ago and now with LinkedIn, it’s a cinch not to be able to track someone down through the network.
Andrew: You asked the question who is the best whatever you’re looking for that you know and you go who would you hire again for the position, those are the two questions you ask your network and then you give a referral bonus, the person who you mentioned, who you hired at Dyson, was referred by someone else who got $1,000. Is it common to offer friend and network members a cash bonus or even a Starbucks gift card?
Jeff: You can do whatever feels appropriate. It can be a Starbucks gift card, I’ve given dinner, a trip, I’ve given $1,000 over $1,000 I tend to find, if someone’s not motivated to help you for $1,000, paying $5,000 is not going to, their either going to put in the time or their not. It’s just something to encourage to spend their time actually thinking “Wow, who do I know for this role” and it doesn’t take that much time but some people do it for free, other people value their time and say “What’s in it for me” so I want to make sure something’s in it for them but it doesn’t need to be a lot for a $50 Starbucks card or $20 Starbucks card if that’s all a startup can afford then that’s what you do but it can make the difference between people racking their brain or taking a spin through their LinkedIn network versus not.
Andrew: I have had friends email me and say I’m paying $1,000 for this and I always feel guilty. I say “I’ll help you” but it does get my attention. Alright, what’s next?
Jeff: Next is screening. So now you’ve cast a wide net, hopefully and I typically like to see 50 to 100 candidates for a role so that I can see what’s out there, cast a wide net and see what the market has to offer, again, at the compensation that I’m targeting.
Andrew: And when you say 50 to 100, you mean 50 to 100 resumes, applications or in person or on the phone meetings?
Jeff: No, it could resumes, applications. It could just be a LinkedIn profile of someone, again, if they’re not actively looking, they probably don’t have a resume up to date.
Andrew: So the top of the funnel is at least 50 to 100 people.
Jeff: Into the top of the funnel.
Jeff: Because, again, if were looking for A players, were looking for the top 10%, how can we accurately assess who is a top 10% unless were looking at a wide enough crew of people. So your analogy is dead on, the funnel of the sales process is exactly the same as the funnel of a recruiting process.
Andrew: Alright, before we continues with what happens there, I’m curious about how you can tell certain things like looking at the score card of the ambassador of Buzz and it’s got relentless drive on it, master networker, I understand these are things that are part of people DNA almost and you want to screen for them, but how do I know that someone is relentlessly driven or just relentlessly driven to get a job?
Jeff: You’re not going to know that from a piece of paper, just to be very clear. A resume is a sales brochure. It is what I’ve learned the hard way over time. But by looking at a resume or a background, you can come to some conclusions as to whether the person’s been in situations, where they were successful, that would have required those innate characteristics. And a very key missing ingredient of most resumes is any kind of quantifiable achievements or accomplishments.
If I’m looking at a resume, or a LinkedIn profile, or whatever, and I don’t see any numbers or any metrics, or anything that shows what impact did this person make, I will typically not invest the time, because it’s just, usually it’s not there. Because A-players love to show off, and show off those metrics, and here’s what I accomplished, or here’s what I sold, or here’s how many calls I made or whatever the metrics might be. You can correlate those to those DNA characteristics. But you’re not going to know these DNA for sure until you interview the candidates.
Andrew: And what kind of questions would you ask to see if someone is relentlessly driven?
Jeff: So, we’ll get to interviews in a few minutes but by looking at the pattern of their career, the arc of their career. Asking the same questions over and over for each position they’ve held, you quickly can connect the dots and see: wow, this person is driven, or: wow, this person was lucky, or some other circumstance.
Andrew: OK. And so the screening process that takes this hundred or so people that are at the top of our funnel and brings them down to four to five candidates, these aren’t four to five candidates that you’ve met with and scored in person. We’re just talking about four to five candidates who were recommended by the right people, who have the right background, who had the right things said about them.
Jeff: Right. So, to decide who I’m going to invest my time with in person, which I, like you said, is four or five people. I need to winnow that list of a hundred down to four. And you’re going to easily throw me some obvious people, those are out. Now there are some people that I actually want to talk to, and I do 15-minute, very disciplined screenings. I do not meet people for coffee or invest an hour for lunch with someone who may or may not be worth my time for this process. That’s different, that’s networking, and I love to do that, but don’t mistake that for the interview process.
Jeff: Usually a 15-minute phone screen will be sufficient to vet whether they’re worth putting the time into. Because when I interview someone, it’s a real interview, it can be two to four hours. And so, I can’t do that for more than four or five people, in an interview process. So I have to just kind of back into who am I going to see.
Andrew: You recently hired a Chief Marketing Officer, Retrofit. How did you do that and how did screening help?
Jeff: So, this was a woman, Kim, who’s turned out to be fantastic, and she runs marketing at Retrofit. She was introduced to me by networking, by a mutual acquaintance, and after some very key, basic questions on the phone: tell me about your biggest career success ever, what are you most proud of. That usually tells you a lot about the person, if you’re not impressed by what they define as their crowning achievement, you know there may be a disconnect in DNA. She demonstrated a great amount of self-awareness and she was very honest about what things she’s not great at, which I love hearing in people because I know they’re not just in sale mode. And so in 15 minutes I said, we’ve got to meet. And we met I think the next day, or two days later, and this was amongst other candidates, and she got the job.
Andrew: All right. Now is when the interview comes in?
Andrew: Now you’ve gone through those phone screenings, only 15 minutes, no coffee, it’s time to actually have a conversation.
Andrew: Oh, I’m sorry, one more thing before we go on to it. Screening: you have a list of questions that you asked people for the Ambassador of Buzz position, we’re going to include that of course with the PDF. I sound like I’m selling this PDF to the audience, but frankly, you guys can just download it. I’m only telling you because . . .
Jeff: [??] you should sell it.
Andrew: . . . it’s incredibly valuable to me as we go through this conversation, and I think that it will be valuable to you to actually see these questions yourself, and we obviously are not going to read all those questions to you. But we want you to see what Jeff has been asking. All right.
Jeff: There is, Andrew, one question I would point out on the screening which is vital, which is: who are going to be your references? If we get all the way through this process, who am I going to be speaking with? And you would be amazed with B or C-players, on a phone screen. They can’t produce who those references are going to be. I will not meet with them. They’re just not worth the time. Because A-players are able to provide you with references from every role, virtually every role, maybe not their current role. And they’re proud and pleased to put those people in front of you, and those people are pleased to speak on their behalf, they love it. But a B and C-player, if you say, are your past five roles all going to be referenceable, by your manager, not by some colleague or friend, you’ll be amazed at the excuses, ‘I can’t find that guy, I can’t track him down. Well, we had a falling out, I don’t know what he would say.’ You know what, I just don’t have the time, and so that’s an important part of the screener.
Andrew: All right. I’m glad that you brought that up. That was item number six on the six point list of questions. And I would have just seen it as just another question on the list.
Andrew: All right. That is really important, I can see the value there. All right. What’s next?
Jeff: So now is the big interview, I call this the dig interview. So my interview style is different than most and it’s been refined over the years. So what I’ve learned is that the hypothetical questions that most people ask are useless. So asking questions like, ‘What would you do if?’ Or, ‘How would you handle this situation?’ I don’t really care because that’s not going to predict anything. What it is predictive is going back in time and plotting the arc of this person’s career by focusing on each of the rolls and asking the same questions over and over to identify patterns.
I’m looking for patterns of success, a pattern of a A player rarely changes. A pattern of a B and C player always rarely changes. So if I go through these rolls and these circumstances and by the end of those two hours I say, ‘This is clearly a B or C player.’ It is highly unlikely that I higher them and they become a A player, in which case I know I’ve got the wrong person. I focus on rolls that are the past ten years, I don’t go way back into ancient history. And at the same time I don’t spend a lot of time on rolls that are less than two years. And the reason for that is it’s very hard to make an impact in less than two years, one year in the absolute minimum when talking about start ups.
So if someone was in a job for three months, six months I don’t even spend time on it because it’s not really going to tell me anything. And so what you’ll typically find for most candidates is there’s two to four, or five meaty rolls we can drill into and I dig and ask the same questions for each of those rolls. And there’s no trick questions, I’ll actually tell the candidate, I’ll even tell the questions in advance because I have nothing to hide here. But I’m really going to dig into the answers on these questions.
Andrew: You know, when I saw this document [??] audience and I saw the word dig at the top of the slide, I thought what you were going to say, ‘Look and see who I dig with, who I dig, who I jive with.’ No, you mean dig the way I do with some of my interviews where you really want to uncover as much as you can from there past.
Jeff: Right. How did you make the numbers? Well, I sold to this customer, to this customer. Well, how did you do that? It almost, it’s the Colombo method. And, well how did that happen? Well how did that happen? And it is painfully obvious that A players have this substantiation within that to explain how it happen, where as B and C players fall apart. You don’t know whether they got lucky, inherited a big account, it just fell in there lap. And so when you drill into these questions you can find the answer. The down side is that it takes time, so what I typically find is it takes thirty minutes fro every five years of experience. So if you’re interviewing someone who is thirty years old for example, can easily be a one or two hour interview to get to establish those facts.
Andrew: You said something that I learned form the first head of HR, Bradford and Reed, she said, ‘Andrew, ask the same questions.’ And I thought, I mean, even in these interviews here on Mixergy I don’t ask the same questions, obviously Mixergy didn’t exist at the time. But I thought, aren’t you just supposed to ask different questions based on what their answers are? And she said, ‘No.’ You say, ‘No, ask the same questions of every person.’ Why, why the same ones?
Jeff: Well, you’re looking to establish patterns and so the only way you can do that is by asking the same questions that you can comparatively plot out the arc of someone’s career. Has this person crested? You’ll see that. Is this person on the up swing? You’ll see that. You also need to compare a cross candidates, and so how can you do that if you’re asking different questions. So, again hypothetical questions don’t really answer a whole lot but if you ask these questions which are in the deck that you’ll send out, you can really drill into a go amount of detail. The only exception is that you don’t want multiple interviewers asking the same questions that is annoying to a candidate. And again, when you’re trying to attract a A player candidate and you have a annoying sales process or recruiting process you’ve got a problem. So only one person should be conducting this dig interview, other interviewers might be looking for other things such as DNA or what have you.
Andrew: See, this is really helpful, now what you’ve given us here is the other slide up here is a list of specific questions that you ask people about this ambassador buzz job, including what is the characteristics of the roll? You take each roll and you brake it down and you ask these questions. S roll number one, what was the character of the roll? What situation did you step into? Who did you report to and how will they rate you? What did you do on a daily basis, and all these questions and more that people will get. You ask for role number one and then you ask the same questions for role number two and so on, for each one of their roles, 30 minutes per set of questions.
Jeff: Right, and it really puts the candidate at ease, because when I sit down and prepare the candidate, I say, ‘my interviewing style is very different than other interviews you may have had. There’s no trick questions here. I’m going to tell you even up front what the questions are, and all I’m trying to do is understand, from the time you’re graduated school or what have you, until the present,’ and it just puts them at ease because people love, A players especially, love telling their story. Now if I’ve got what I need, then I move onto the next piece, but I want to understand what is your manager going to say about you when I talk to them in reference checks? How is your compensation structured? What did you do every day? Why did you leave? So, these all give important pieces, important clues.
Andrew: I see, and so you would show me, if you and I were both going to interview a candidate, or a set of candidates, you would show me yours, I’d show you mind, and then I can see how already ours would be a little bit different. I would be interested in how many people they got, how did they get people at the top of their funnel because I’m so funnel-obsessed, and what they do to go on down from there. All right, what about how you hired Mike? What did Mike do at Retrofit? How did you hire him and how did this interview fit in?
Jeff: Actually it was Dave.
Andrew: [??] Dave and I didn’t see that? Sorry Dave.
Jeff: That’s okay.
Andrew: We’re going through, I should say to the audience, I want to be as open as possible because what I’ve discovered is, I had this guest come on and say, ‘Andrew, I didn’t realize how much work you put into these interviews and these courses. If I knew that…,’ I guess he said at the end of it, he said once he knew how much went into it, he became a premium member. He told Jeremy, our pre-interviewer, and he said, ‘you know, I should be showing people what we’re doing here. There’s no reason to hide it.’ If anything, they’d get a sense of how much we care about these interviews. These aren’t just an afterthought. These aren’t just something we do to market something else.
They’re really meant to be useful, life changing, and I know people are going to be listening to this and they’re going to understand how to hire better, and as a result, their companies will improve, and maybe not tomorrow, but 5, 6, 10 years from now, they’re going to send Jeff an email saying Jeff, thanks for doing this interview, and I urge you frankly to even do it now if you’re going to use it in the future. That’s retrofit [??].com is where you can find his contact info. All right, so I called the guy Mike. The guy’s name is Dave.
Jeff: So Dave, in the interview, when we went through these questions, it became very apparent that this was a very self-aware individual who was very proud of his accomplishments. He was also very honest about what his biggest failures were. He set my expectations in terms of what I was going to hear from each reference, and I’ll tell you, those references were bang on what he said they were going to say, so the information synced up and was validated. I always ask what situation did you step into and so in Dave’s situation, he had been put into situations that were very similar to this situation and that is highly predictive of success, like I mentioned earlier, and three or four times he was put into a similar situation and nailed the cover off the ball, and that gave us confidence to move forward with him and ultimately hire him.
Andrew: You will go back with people all the way back to high school if you need to?
Jeff: It depends on the age of the person and the amount of experience, so if we’re talking about a 25 year old developer, and I want to look at their past 10 years, I frequently will go back to high school, leadership experience in college, why did you pick the college that you went to, etc. If it’s someone who is later in their career, again you may focus on the last 10 years of experience. That seems to be the magic number.
Andrew: One of my best jobs was in college working for a recruiter named Paul Severa [SP] and I was just a college student. I think maybe even a freshman, sophomore, no more than that, and he asked me for references. I thought, ‘who do I give him as references? I really haven’t had many jobs.’ I said, ‘can I give you my professors,’ and I was so excited, first of all that he cared about college professors, and then he cared about my past, and I was so excited that he was going to call my professors up and find out how great I was at those classes. I get what you mean. When you really rock something, you want the world to know about it and nobody does know about it.
Jeff: Those references are thrilled to speak on your behalf, so this is a dirty little secret of recruiting, is the whole situation around a company’s policy. ‘We do not give references,’ you frequently hear that, ‘so I can’t give you any reference, their policy is not to give references,’ and while I understand that and there’s some legal mumbo-jumbo behind it, think about it. The legal issue is technically when the reference is going to give a bad reference, but when the reference is going to say nothing but glowing, terrific things, you have to ask yourself, ‘why can’t this person produce a reference,’ and I’ll push very hard and I’ll say, ‘why will this person not be a reference,’ and if they say, ‘well I don’t know if I can find him,’ I’ll find him on LinkedIn. that’s not a problem, so LinkedIn has taken that excuse off the table, so they frequently cave, and they’ll say ‘well, in the end we had a big falling out and here’s what happened,’ and again, there may be a good reason, maybe not, but if you can’t produce references, that’s a very big red flag.
Andrew: All right, what’s next?
Jeff: So we talked about the interview and we are looking for these patterns over time. The key thing at the end of the interview is to go back to that scorecard, and complete the scorecard right then and there, while it’s still fresh in your mind, and compare, sit down with other interviewers. In many companies, that discussion may not happen for weeks or the discussion doesn’t happen at all or it’s an email, ‘I like this guy.’ Well what did you like about this guy? How does he compare and contrast? This is again, a vital decision, a potentially very expensive decision, and people sometimes don’t take it seriously, so that’s a key next step.
The other piece to remember is that A players have to be wooed and sold. You need to do these in parallel not in serial so frequently a founder will interview and interview, and at the end of the process they’ll say ‘wow this guy I like or gal, now I’m going to woo them to my start up’, and it doesn’t work that way. You need to have been selling them throughout the process. It’s a give and take type of process.
Andrew: I see. If you are trying to sell them, does that make the job less appealing because you’re trying to sell them on it?
Jeff: Well you’re not selling them to try to pull the wool over their eyes. You are explaining to them why this is a great opportunity. It’s a great opportunity personally, the new skills that you are going to develop, our companies opportunity, the product that we are going to make that is going to create the world, the venture funding we’ve secured which gives us social credibility, and that’s why we didn’t talk about it earlier with the phone screener. One of the questions I had asked was what is it that’s missing in your current role? And I write that down, and that becomes our selling item for later. I’m bored, I hate my boss, I’m underpaid, my commute is 2 hours a day. These are really important things to establish early on, we’re going to use those later, and you know it is a sales process for A players. B players and C players you don’t have to sell, that’s easy, but again we already said we agreed we are looking for an A player, that involves a sales process no matter even if it’s a Jr. software developer or QA person.
Andrew: Imagining your employees at Retrofit, and over the years listening to this, or maybe even scanning the transcript and saying I did go through that, and feeling so proud that this is the process that they went through, it’s not just I got some job, but look at what I went through and what I was able to do.
Jeff: My team calls it riding the gauntlet, of our recruiting process, which in not meant to be, its something, that’s great because it builds an amazing culture. It’s so much of a pleasure to work at a company of A players and the culture starts to spin out B players so you make a mistake one of those 20%. The culture just won’t stand it, and people will say, this was a mistake, but if you initially hire the wrong people that culture gets up to the wrong start and it’s difficult.
Andrew: What about when, and I’ve got a couple more points here to go through, how’s your time looking? I really appreciate this. Also, because we spend a lot of time before the interview, Jeff, I’m really grateful to you for doing this, when a guy knows his stuff, it shows in the interview, when a guy know his stuff and is prepped, boy, does it show in the interview and I’m really grateful to you for doing this. I used to hesitate to make the process too tough, because I wanted to make it easier for other people I wanted to make them want it and not, and I don’t know what my hang ups were, but once I made it tougher and tougher and a few of my entrepreneurial friends have told me how to do it, and make it useful for both sides. I found that the people that I hire want the job more, are prouder to be there. Have you found that what have you found happens at this process?
Jeff: As long as you explain to candidates early in the process that we have a very high bar, a high standard, and that’s created a great culture of A players and improved our odds for success that’s really important to us. Therefore, I want to set your expectations on what this process is going to consist of. I don’t think anything we’ve talk about is unfair, or unreasonable there are no tricks, there are no gimmicks, there was no hazing, it’s not like getting into a fraternity but B and C players will frequently opt out of that process because they know that they are going to be found out and so it ultimately will save you your time. Yes on the margin, there might be some people that feel like they need to be wooed, and why would I have to endure the recruiting process and they’ll go away and you know, shame on us we missed an A player, but that’s worth it versus making a hiring mistake.
Andrew: You do something that Whole Foods said that they do. After you find the people that you want to hire, you go through an audition process.
Jeff: Yes. So, this is an extra step, 99% of the people that I’ve met over the years don’t do this step. And this has been found to be highly predictive of success. So we found, let’s say, the two finalist candidates, which should have happened, by the way. If we interviewed four or five A-players, we should have two. And you’re always looking for two, in case one doesn’t take the job, the backup candidate is there. Otherwise you have to start the whole process again. We give them a job audition, job auditions are highly predictive of success. They vary based on roll. But it’s basically a test drive, and it may be an hour or a day or a week or a weekend, whatever it might be. I’ve learned there’s specific ones over the years, for different rolls. If it’s a sales roll I think there’s a sample in the deck, but we’ll give a sample assignment, and say, you need to develop a pitch and come present it to us. And we’re going to give you some objections and see how you handle those. And here is some background reading on the customer you’re presenting to.
If it’s a developer role, I want to see the work you’ve created, and if you haven’t here’s an assignment. You’re going to spend the weekend developing something. If it’s a financial role, they can analyze the PNL. And we’re happy to pay them, I don’t want anyone to think we’re getting free labor. So if it means giving them $100 for their weekend, or $50 an hour, whatever it is, that’s nothing compared to the cost of a mistake. So this is not about getting free work, it’s about seeing how someone thinks. Seeing whether they go above and beyond, you frequently see people do that homework assignment and stick to the letter of the law and doesn’t go one step further. But A-players go three steps further.
Not only did I do what you ask, but I also thought about this, then I did this and I checked on Google and we did some research. Now you know you’ve got a winner on your hands. Right? And so it’s a vital step of the recruiting process and highly predictive.
Andrew: I see. I misunderstood this, even when I read the notes and looked at the slides that we’re giving people. It’s not we’re going to hire you for three months and if you’re not happy then so long. It’s come in for a weekend, here’s a typical job that we have here. We’re going to pay you to do this typical job over the weekend. But we want you to see what life is like here for you, and also to see what your results will be for us, if we continue to work together.
Jeff: Correct. I’m all for the test drive and the meeting the 90 day probation period, but, in life we’re all on a 90 day probation period. So, if we’ve made a mistake, we’ve made a mistake, let’s try to avoid the mistake. And one trick that I’ve learned to avoid it, is by giving them some of the work before we’ve even given an offer. Now, if they say I don’t want to do work or I’m too busy, that tells me something about their interest level in the role. I will say that’s fine, I don’t expect any free labor, we’re going to pay you. If they still say not interested, then again, that tells you something.
Andrew: I can see that.
Jeff: But an A-player who is genuinely interested is thrilled for a job audition. Because, that’s again, a place for them to show off their talents and their gifts. If it’s a hacker, they’ll code something and explain it to you, and he’ll be all excited about it. If it’s a market research person, they’ll spend hours on Google and they’ll come up with a thesis on some unique positioning for your product. Again, I don’t want any free labor here, I’m happy to pay for it, but it’s amazing what you’ll see in terms of work product. Even if it’s way off and it’s not right, the level of depth of the thinking of people is incredible.
Andrew: I’m looking here at an assignment that you gave senior sales representatives at Ameritox. Can you describe this for people who aren’t looking it right now in front of them, and what happened as a result of this?
Jeff: Yeah. So we did this for every sales position, and we asked them to read a bunch of information we gave them, about the market and our product and the competitors and customers that they were going to present to. Then we said we want you to design a 15 minute sales presentation and come back and give it to us in a week. And, again, some people fall out and say, don’t have time, not interested, whatever. Some people come back, they can’t put slides together, they can’t articulate a story, they clearly haven’t read the material, they’re trying to wing it.
They’re great at giving a presentation, but terrible at overcoming objections. In other words, they can memorize and rehearse anything, but as soon as you ask a question that’s challenging they freeze up, they can’t think on their feet. Just, had a terrific experience, and we would typically do that with the two or three finalists for each role, and the person that nailed that audition, 9 times out of 10 got the offer.
Andrew: All right. Next, you’re going to check their references. You check their references after the audition?
Andrew: OK. Why? Why not before you invite them in to do the work?
Jeff: Because references is a very time consuming if done properly, which we’ll talk about.
Andrew: So how do you do it?
Jeff: So I do it in a very different way than most. Most people will check only the references that the candidate gives them, they will be very brief references, and they are hoping like heck not to hear anything that will sway their decision because it’s already made up; I want Tom so now I’m just looking for validating information about Tom, that’s most references. I would submit, save your time, just hire Tom and get on with things because you’re not going to listen to the references anyway.
When I conduct references, typically it’s before the offer has been made with the final two candidates, if that’s where we are at, I want to understand who, what references were given, who’s missing from that list. So if I’ve been given three of the four managers this person’s had, why I wasn’t given that fourth manager and I’ll have a discussion with the candidate about that. How long does it take for the candidate to arrange these, I ask the candidate, you’re going to arrange the interviews and A and B players can get those references like this, whereas B and C players, people are not so energized and willing to speak on their behalf.
Once I get those interviews on the phone it can be 15, 30, 45 minute conversation where I am really digging into what impact the person made, rating them against DNA that we’ve identified. I’ll ask, obviously, will you hire him again? And if they say without any hesitation, anything less then that is a red flag, I will look for why did they depart and I will try to match up those stories to make sure it links back to what the candidate told me and if it doesn’t, that’s a yellow flag as well.
A key question I ask is how would I coach the person for success? Assuming I hire John, how do I get the most out of him? And his former managers will tell you, here how John responds and here how you want to coach him. That will save me a ton of time, as John’s manager in the future, so that’s less about a reference check then saving me time down the road. So I’ll do all that with references and then I’ll use LinkedIn to find backdoor references, this is references the candidate did not give me.
All’s fair in love and war. And I’m trying to find former colleges, former customers, anyone that I know has worked for that company, as long as they have been in a position to speak to this person, not third hand I heard he’s nice or I heard he’s a hard worker, I’m talking about reference quality people, again, looking for key patterns.
Andrew: Do you ever go through this whole process, have those conversations with the people who you think you like or know you like and then not hire anyone at the end of all this?
Jeff: A third of the time.
Andrew: A third of the time you’ll go through this whole thing and not?
Jeff: A third of the time I have to restart the process. So two thirds of the time, if I’ve started with 100 candidates at the top, I’ll get to the four or five to interview in person, gets to those final two, check references and we’ll have our winner. And when it’s an A player, I will fight like heck to get them and I already know that compensation wise I’m in good shape because I thought about that up front., so we don’t lose him for money. A third of the time you get through the process and the references didn’t check out, they bombed the audition, I didn’t have a backup candidate lined up or I lost the backup candidate, they had another offer, and we’ve got to restart the whole process which is more painful then anything.
Andrew: I can imagine. At that point I could imagine myself maybe trying to fudge the results.
Jeff: You will settle. You will settle for a B player, is what you do.
Andrew: And your saying, don’t.
Jeff: I can’t think of a position that is not important enough to merit settling for a B player. Two weeks into it, two months into it, you realize I just made a mistake, I cost us a lot of time and money. I’ve pissed off all the A players in the origination. It really speaks to my leadership or lack thereof.
Andrew: It’s one of those times when having video actually helps. Before I got your answer with word, I saw it in your face that, I saw how painful it is. You hired Doug, when through this process, what’s Doug’s role and how did the reference checks work out with him?
Jeff: Doug was an employee at Americtext and we’re a sales and marketing position, interview went great. Again, sales people interviews are very dangerous, the sales people are great in interviews, they’re good talkers so interviews are notoriously difficult for sales reps. but, again, a methodical three hour interview, and it’s pretty hard to fudge that. He did a great interview, audition went very well, and references were thumbs down. It was just very spotty.
There were managers missing that he just could not produce. The other managers that I spoke to gave very, it wasn’t so much what they said, it was what they didn’t say, you know, I have to read between the lines. But, it was very clear that this was not a referenceable individual and I was tempted but decided not to move forward. Left that territory open, I think it took another three months for that sales territory to find another person. But, again, if you had put a B player in that territory, he or she could have done a terrible job with customers, done more damage to the territory, made the company look bad. So, I’d rather have nobody then a B or C player.
Andrew: The final part of the process is onboarding, what’s onboarding and how do we do it right?
Jeff: So, but what most start-ups do, is hire the right person and throw them in and say, good luck. And that’s it. Even A players need some orientation, there’s a phenomenal book that I’ve read many times called, ‘The first 90 days’ which is just a fantastic book by a Harvard professor about how to set someone up for success about you as a individual to [??]. But, there needs to be a 30 day plan or a 90 day plan. In a start-up, typically 30 days is enough. What are we going to do to train this person, get them oriented, who do they need to meet with? I wouldn’t expect much in the way of results in the next 30 days. And I hold the manager, the hiring manager, accountable for showing me that plan before an offer’s made. So, I will see that person’s 30 day plan.
Andrew: So, before an offer is made, the person who is hiring them needs to give you a 30 day plan. What are you going to do with this person when they come in for the first 30 days.
Jeff: Right. If you’re a hiring manager and you have to spend $50 or $100,000, or $150,000 and you haven’t committed to paper, here’s what his first 30 days looks like, then I won’t sign the offer letter. It’s amazing how quickly they put together a plan when that happens. Again, this is a major investment, for a tech start-up, especially, this is the number one investment or expense depending how you look at it. And to not have a plan to set an A player up for success is criminal. –
You’ll also, in the first 30 days, be looking for early warning signs. Again, 20-30% mistake rate, did we make a mistake. And, you’ll find those signs very early. So, you’re looking to find them doing something right, not just wrong. But, you don’t want to just gloss over, hey this doesn’t smell quite right, maybe this wasn’t such a good decisions. By the end of 30 days you’ll typically know that.
Andrew: You had a manager named Sharon who had no 30 day plan. What happened to her?
Jeff: Yeah, so, this was early on in my carrier. So, I didn’t require this at the time, and she hired someone, I believe it was a director of marketing, there was just, no, no plan, the person came in and flailed. And the issue was, this was a very fast paced culture, and we asked to person to keep up and do a lot of stuff. But, she was extremely thorough, she was meticulous about attention to detail. –
She would take days and days and days to get stuff done. And we would say, we hired someone who is just too slow. She can’t keep up with us. Well, as it turns out, there was no 30 day plan, where we would have said, here’s what we expected, here’s how much detail we want you to put into this particular assignment. It doesn’t have to be perfect, just, kind of, 80% right is fine. And, so we lost this individual, who I am convinced to this day is an A player. But, we didn’t set her up for success, it didn’t do her any justice, she flamed out. It’s very frustrating for both parties and I think it’s because we didn’t have a plan in place. –
A players don’t just magically come in and know what to do, they don’t magically come in and know your culture and the expectations. Even if they’ve worked in a comparable role for a comparable company, every group has it’s own way of doing things, it’s own expectations, it’s own metrics. And, in the first 30 days, that’s a learning period. You cannot just dump someone in and expect productivity.
Andrew: Alright, I’ve got to thank the audience and then I want to ask you a question that could undo everything that we’ve said up to now. Not between us, but between us and someone in the audience. So, the thing I want to thank you guys for is, if you’re a Mixergy premium, you’ve made this happen, this interview doesn’t just happen out of thin air because we happen to chat and all the good stuff comes out. As you can see, we invest time ahead of time making this interview work. –
We talk to you as audience members and as premium members to find out what you are looking for and how we can help you. And, that’s how this comes out, I know there’s this movement on the internet to shorten video. Get it down to 30 seconds, a clip for one minute, and in that burst, you feel like you’ve gotten something, but really, you’re not set up for success. What I know you’ve gotten at the end of this, and you can decide for yourself whether I’m right or wrong on this, as a listener who’s just spent about an hour more with us, what I believe is, at the end, you got something that’s the equivalent of having a really productive session with a mentor, someone who’s really good at what you’re coming to him to learn. And, Jeff, there’s no doubt that at the end of this time you spent with him knows how to hire. There’s no doubt that if you move towards his direction or, better yet, take everything we put together here, that he put together here as your guide towards hiring people.
There’s no doubt you’re going to become a better hirer, and your team and your company and your future will be better. And so, what I want to do is say thank you for it. There’s a lot of people who went into it, and you as Premium members have paid for this.
When you see this out and when you see Mixergy grow, it’s not that Andrew’s done this. I want you to own it because I know that you’ve earned it, that you’re putting this out in the Internet as Premium members.
God knows, no advertising’s going to make this better. Advertising is going to tell me: come up with one quip. Make it snappy. Come up with a lot of video before, intro and out-tro, and then run a bunch of advertising against it. And then, do some SEO and other junk to really get it up there. You care about yourself and you care about the Internet, and I appreciate that you’re making Mixergy happen. So if you’re a Mixergy Premium member, thank you for doing this. I’m not selling any memberships here by doing this. I’m just saying, “Guys, really thank you.”
So, Jeff, here’s the last question that could undo it for some of these people. I hope it won’t. We’re going to stop it from undoing it. What’s the one thing that you know many people who listen to this program aren’t going to do? Where’s the one place that they’re going to fall short, that they’re going to say: you know, there were many points that I wanted to give up and walk away. What do you see as you’ve taught this to other people that that’s where they gave up, that’s where they made a mistake?
Jeff: That’s very easy. It’s simple but not easy which is to not settle.
Andrew: That they’re going to settle.
Jeff: They’re going to settle.
Jeff: So, in the pressure of a startup which I felt four times now in the day to day, hand to hand combat of a startup, you have an open position which you typically have decided the day before hey, we need to hire X or Y, not like a big company where there’s a whole hiring process in advance. I call this just in time hiring. We need to hire somebody. The temptation is: let’s get a butt in that seat tomorrow because that’s productivity, feet on the ground.
Jeff: Butt in the seat and the temptation is to settle. When you settle and you don’t court A players and you don’t vet people to figure out if there are any players, you run the risk of making a mistake, and you will not build a successful startup if you do that. It is much better to leave that seat empty, which I know it sounds crazy to an entrepreneur versus hiring a B, or God forbid, a C player.
Andrew: All right. And there were many points in here where I said to you: I wanted to be honest about what I was feeling. What if I just stop right here? And I understand what you’re saying. I could see that coming up. All right. The final slide that you guys are going to see… Can I give people your email address?
Jeff: Yeah. Sure.
Andrew: Well, all right. Here it is; it’s in there. It’s Jeff@retrofit.me.com. So, first check out retrofit.me.com so you get an understanding of Jeff’s business and check out the background of the company and his background. And then, do what I suggest. Send an email saying thank you.
Now, I’m a good enough sales person that I know the way to get you to send a thank you note is to come up with one email of someone who said, “Andrew, I sent a thank you note and I met the guy in Japan, and we ended up doing business.” In past interviews, he’s ended up working with people who reach out to them, but I want you to do it for that. I don’t want you to do it because you say: Jeff might end up investing in my company. Jeff might end up nothing.
Come at it from a purely pure point of view. Just say I’m going to send Jeff@retroft.me.com a thank you note if I got anything out of it good. No one will tell you this though. Not one person has ever said: damn you, Andrew, I spent a minute sending a thank you note to someone who helped me out on the Internet, and I’m so upset. It never happens, so do what I’m going to do right now. Jeff, thank you for doing this interview and thank you all for watching.