Today, I spoke with Geoff Smart and Randy Street, who are two of the brightest people I’ve encountered when it comes to recruiting the best talent. They just finished their first book called Who: A Method For Hiring. We discuss why talent is so important to building a winning team, go over some incredible research they’ve uncovered and talk about why social networks are so significant now for sourcing candidates. When it comes to personal branding, you are the company, which means you have to become the Chief People Officer and recruit top people to fill your world with.
Is talent the name of the game? How important is hiring the right people?
Talent is definitely the name of the game. I worked in strategy consulting for five years and thought that it was the answer to everything. I just couldn’t understand why half of my clients never seemed to execute the strategies we helped them define. So I got out of the consulting world and tried a start-up. The CEO asked me to run sales and marketing, and I quickly found my sales strategies were worthless without good execution. But what confused me was why half of my sales folks did great, while others languished. That’s when the light went on. It’s all about the people.
Get the right people and great things happen. Get the wrong people and management becomes one headache after another.
Our philosophy is you should expect “A” performance out of everybody. If you pay $30K, you should expect an A performance out of the pool of people willing to work for $30K, and so on.
Recruiting has certainly changed in the past few years. It is said that 1 and 4 hiring managers use social networks to screen candidates and 10% of admission officers do the same with perspective students. What is your opinion on using social networks to recruit and conduct background checks on candidates?
From our unprecedented field research with over 20 billionaires and 60 other CEOs and investors, we learned that social networks are not only desirable, they are in fact the #1 best way to source talented people. 77% of those surveyed for our book indicated that personal and professional networks were the best way they hired their best people (followed by recruiters and job boards and ads, etc.).
We’ve also found a lot of people use on-line social networking sites to screen candidates – e.g. Facebook and My Space. Companies have to be careful, though. Legally, they can only disqualify somebody if they are incapable of doing the job at hand. That’s one advantage of a tool we introduce called the Scorecard. The Scorecard lays out what “A” performance looks like before you even talk to people. If a hiring manager sees things on social sites that suggest the candidate is not qualified for the Scorecard, then the manager is on firm ground to screen the candidate out.
What is your famous 4-step recruiting method that you’ve used with your clients?
It is called the ghSMART A Method for Hiring. The 4 steps are the necessary things you have to do to pick the right “who.”
- Scorecard—a blueprint of what OUTCOMES you want a person to deliver in a role, and the way you want those outcomes to be achieved.
- Source—again, social networks being the #1 way to find the best people for your company. (with referrals being the key sourcing mechanism)
- Select—there are 4 interviews you need to master to have a 90%+ hiring success rate. (The Topgrading Interview is the main event among the four interviews. It is a chronological, structured walk through of a person’s career. From it, a person’s success patterns clearly emerge.)
- Sell—how to get the right candidate to sign on the bottom line? Remember to emphasize the 5Fs of Selling: Fit, Family, Fortune, Freedom, and Fun.
What are hiring mistakes you’ve seen in the past? What do recruiters do right and wrong?
Hiring mistakes come when managers don’t know what the outcomes are they are expecting, when they confuse volume of candidates with the quality of fit, when informal “how about them Cubs” interviews are used rather than fact-based intensive interviews, and when managers forget to sell the candidates once an offer is made. Recruiters are typically good at generating a flow of candidates but fail to collect enough balanced data—positives and negatives from interviews and references.
Managers also rush the process. They are so mired in the day-to-day details of their job that they fail to realize that building their team IS their job. The best sports coaches spend a huge amount of time thinking about who to put on their teams and in what positions. They also spend a lot of time developing the talents of those team members through specific practice and drills. Managers fail to invest the time and end up making hiring mistakes 50% of the time.
Care to share some results from your 300 CEO study?
Sure. We found one surprising result. Common knowledge is that the warm and cuddly type of CEO performs the best—you know, the one who is very open to feedback, infinitely participative in decision making, and gets along very well with others. Well the facts are different. We conducted the most in-depth study ever done that looked at CEO traits and financial performance, on 313 CEOs over a 5-year period. We found out that these warm and cuddly CEOs, whom we called “Lambs” were financially successful about half as often as their more aggressive and focused counterparts, whom we named the “Cheetahs.” So everybody who is a CEO, or who wants to become one, should reevaluate what the ideal modern form of CEO really is. In summary, it is better to get stuff done than it is to appease everybody around you.
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Geoff Smart is the co-author of Who: A Method For Hiring. He is the chairman and CEO of ghSMART, the management assessment firm for CEOs and investors, which he founded in 1995. ghSMART’s clients include leading private equity investors, Fortune 500 CEOs, and billionaire entrepreneurs. The firm’s impact on helping clients make better “who” decisions has been featured in The Wall Street Journal, BusinessWeek, Fortune, and a Harvard Business School case study.
Randy Street is the co-author of Who: A Method For Hiring. He is the president of ghSMART Executive Learning, the business unit he founded that helps managers learn key skills to achieve career and financial success through research, publications, workshops, and associated products. Randy is a popular speaker with a dynamic and energetic style that routinely generates the highest audience satisfaction scores possible. He has been featured in the Wall Street Journal.
