Minding My Own Business

Fire in the Hole, Part II

July 17, 2006

"After finding no qualified candidates for the position of principal, the school board is extremely pleased to announce the appointment of David Steele to the post."

Although this announcement sounds like something out of a Jay Leno sketch, it was actually proclaimed by Philip Streifer, the superintendent of schools in the town of Barrington, RI, USA. As funny as it is true, the subtext of this quote resonates with those of us who have struggled to fill certain key positions within our own organizations.

These difficulties are not necessarily relegated to upper management. For certain positions within our company, we recruit graduating seniors from colleges with relevant undergraduate programs. As in most recruiting processess, we sort through mountains of resumes and in some cases, enjoy (endure?) mingling with candidates at school-sponsored student-employer events. We then offer interviews to those whom we believe offer the best match to fill a particular opening and bring the most potential to our company.

A couple of years ago, I had the pleasure of interviewing a young person interested in securing a customer service position. Things were progressing nicely as we discussed his schooling, outside interests, and what led him to seek a position within our company. As I frequently do when interviewing applicants - particularly younger applicants - I asked what he envisioned himself doing in five years. Hoping to hear a planned path of progression to a position of leadership within our firm, I was surprised to hear him tell me that he saw this "first job out of school" as being a "stepping stone" to a management position somewhere in the industry. True story.

Another candidate, this one seeking a graphic designer position, demonstrated similar interview intelligence by responding to a question about working within a team environment as follows: "Dude, I'm an individual, and when you hire me, just let me do my thing and leave me alone." I kid you not.

Obviously, these two individuals made the hiring decision very easy for me. However, there have been quite a few other cases when I lacked a definitive feel for the appropriateness of that particular candidate for both the position and our company. Even with existing personnel, I occasionally find myself struck by doubt as to whether a particular person is right for us, and whether we are the right company for him or her.

One perspective that I find useful in personnel evaluations is whether or not the individual considers his or her employment in our company to be a job or a career. There is most definitely a difference, and recognizing this can be a critical decision-making variable when dealing with long-term projections for particular employees. More and more, our companies have found that job-hoppers rarely find a comfortable home with us, while those seeking fulfilling careers are considerably more apt to position themselves for significant professional growth within our organization.

When filling certain positions, we frequently debate the value of industry experience relative to task-related experience. For example, is there any long term benefit to hiring a salesperson from within the industry over a successful salesperson from another industry? To me, a salesperson is worth what they sell for our company, and not what he or she sold for someone else. If a salesperson is bringing a book of business with him or her, that is worth nothing additional to me; it will reflect itself in his or her sales for my company, which is the only basis for which that salesperson should be compensated. The questions to consider are how difficult it is for an industry outsider to learn to sell our products and services versus how much more quickly a salesperson from within the industry will achieve sales for our company.

Ken Norton, currently VP of products at JotSpot Inc. and the former senior director of product management at Yahoo Inc., has a fantastic blog in which he discussed his rules for hiring managers. On the importance of industry knowledge, Norton strongly recommends hiring "a wickedly smart, inexperienced [manager] over one of average intellect and years of experience."

Perhaps the most difficult hiring decisions are those involving managers, because the skill set is so difficult to ascertain on the basis of a resume, interview, and even references. In cases where I have assured myself that the candidate's personality, fit, resume, and required compensation are acceptable, I find it useful to ask myself these questions:

- Can this candidate manage people?
- Can this candidate manage our people?
- Can this candidate make tough decisions?
- Can this candidate make easy decisions?
- What kind of risk taker is this candidate, and does that comfortably mesh
with my own level of risk aversion?
- How quickly and easily does this candidate spend the company's money?
- What is the best performance I can envision out of this candidate?
- What is the worst performance I can envision out of this candidate?
- What is the most likely performance I can envision?

I remember reading something that Warren Buffett (him again!) said about investing that I believe crosses over as sound advice about hiring and firing for key positions. Buffet espoused the idea that every investor should go about their investing activities as if he or she is permitted only two or three investments in his or her entire life. This would place an extraordinary threshold of required certainty each time the investor considered an investment. Putting this idea into our context, if you knew you would only have one opportunity to fill this position, would you be absolutely comfortable hiring this individual?

So much of our success is tied to the performance of our personnel. Many companies even market the excellence of their people (as in "It is our people who make the difference"). Does it not, therefore, make sense for us to devote the same effort and resources into the management of human capital that we do into equipment and other financial capital?

A great rule of thumb that successful organizations follow is hire tough, manage easy. Be painstakingly diligent in your hiring of key managers and leaders, and then sit back and let them do their thing.

But there are many in our industry who fear hiring the very best people, for reasons that range from cost and mistrust of outsiders to insecurity in the face of smarter people. Budgets and trust issues are something with which every business must deal and reach an acceptable position. What haunts owners and managers more than any other significant HR issue is the insecurity about hiring individuals who are extremely bright and competent - and this is something that destines companies for mediocrity.

Back to Ken Norton again. His number one rule for hiring product managers is "Hire all the smart people." He describes what he looks for as "raw intellectual horsepower". How does he do it? "Generally I'll ask logic questions until I'm sure the candidate is smarter than me. For some reason, lots of people I know are reluctant to do that. They argue that it's insulting to the candidate. I think the right candidate will relish the challenge. In fact, that's the first test - How do they react when I say 'I'd like to ask you some logic questions, is that okay?' The best of the bunch are usually bouncing out of their chairs with excitement. The super smart sometimes counter with logic questions of their own."

The following quote, attributed to R.H. Grant (although, to be fair, I don't know who R.H. Grant is or was), serves as sound advice for those seeking to build strong organizations: "When you hire people who are smarter than you are, you prove you are smarter than they are."

Elisha Tropper is president of Prestige Label Co., headquartered in Burgaw, NC, USA.
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