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Beyond Survival

September 2, 2009 2 comments

by Richard S. Lewine
Read bio here

HR Performance Sites helps organizations to measurably optimize the performance of people and work.

Here we are, knee deep in a recession which is leading many to depression. Many of us don’t know for sure how we got to this place.

We’re unsure which of our many decisions contributed to where we are right now. Maybe it doesn’t matter, except as lessons learned. Our possible futures are really more important, as we can use our past to help us create a different kind of future. What we do with our possibilities depends on how much we believe in ourselves; how high our self-image is; how clearly defined are goals are; and how willing we are to embrace some change.

“Without a system of goals, our only motivation is survival”. When I coined this phrase back in 1977, I didn’t realize just how powerful is was. It was just something that came to me, a realization based on the transition that I was going through at the time. Its impact was brought home to me a few years later when a job candidate told me that the only reason she walked in the door of our somewhat tacky office was because she saw that phrase on a sign in our storefront window. That candidate went on to become a partner and very successful in her own right.

Several of our clients were able to exit their businesses by selling them to outsiders. They tell us that having a system of goals, both personal and business made this possible. Our clients who continue using our goal setting technology long after we’ve finished our consulting gig tell us that it is the difference between just accepting what they think will happen, and getting what they want. “A goal is what you want, not what you think you’ll get”. Another of my epiphany type realizations. Instead of being a victim of your results, you become the beneficiary of your efforts to achieve your desired results.

Creating a system of goals, personal and/or business is no mean feat. It takes commitment, time, effort, thought, risk, and patience. Patience with yourself and with the process.

Now is the time to think about your possible futures. While you’re in line at the unemployment office, or waiting for the person who will be interviewing you for a position. While you’re watching a sporting event or catching a missed episode of your favorite soap. During your lunch break at your job, or while you’re reading a book. Carry pen/pencil and paper with you and when an idea hits you, write it down! More good ideas have been lost on the way from the brain to paper than make the trip. From ideas and dreams come goals. From goals come successes, no matter how they’re measured.

I’d be glad to share the entire goal setting process right here, however, you probably wouldn’t take the time to read all 50 or so pages.

There are many resources available that can help us get the job done and the Internet has made them easily accessible. Effective goal setting isn’t taught in our schools and universities. Rather, we’re told to set goals, but not how. The how is critically important.

When you experience and understand the value of this goal setting technology and what it can do for you, you “won’t leave home without it”!

Facts? I Don’t Need No Stinkin’ Facts!

August 18, 2009 Leave a comment

by John Wentworth
View bio here

mentalking“Data are bunk when it comes to picking employees.  I know!  I can tell who to hire in five seconds by just listening to them.” 

Jim, the recruiting director of Acceleration Service, sat at lunch with Fredrico, one of Acceleration Service’s divisional general managers.  Jim really liked him.  Fred was frighteningly bright, equally perceptive, but haunted by high achiever demons.

The demons included hubris.  Fred was sure that he was right.  About everything.  The problem was that he usually was, even when everyone around him disagreed with him.  His pattern recognition skills were superb, able to understand the essence of a situation from just shreds of facts.

But he overestimated his ability to pick new employees.  He ran a sales call center and kept one out of every ten employees hired.  As he and Jim sat there at lunch, Fred refused to use any data-driven selection tools.

Jim sighed.  “You are flaunting the entire discipline of psychology, you know,” he said to Fred.

Fred just smiled.  “I know what I know.”

Jim sighed again.

Jim was particularly frustrated because of some data-driven revelations that he had engineered and that Fred had acted on and which had turned out to be pivotal to Fred’s success, and which Fred had seemingly forgotten.

Fred at one point could not get anyone hired.  He was using a test and his recruiter had not been able to find anyone who could pass the test.  He reached out to Jim who assigned one of his corporate recruiters to the task.  Soon, they had candidates who passed the test and who got hired.  Everyone rejoiced.

But the rejoicing was premature.  Virtually everyone who was hired either left or was fired.

Jim sat down with Fred.  “What’s going on?”

“I don’t know Dude,” Fred said.  “It’s always been this way.  I have been able to create a cadre of loyal producers who are making a lot of money, but we can’t find any more of them.  I thought the test would help.  It’s normed to my top people, but it’s letting too many of the wrong people through.  I’m worrying about whether we have the right test.”

Jim growled under his breath.  He knew the test and he knew it was respectable.  And he knew that any respectable test, if it was normed to the right people, would create a filter that let people who were like the normed group through.  He recognized the limits to tests, too.  If you did not measure anything that actually correlated to on the job success, testing was useless.

And it was here that Jim had some sympathy for Fred’s point of view.  His environment was not like other call centers.  His management was not like other call center management.  Many of his successful employees had not been salespeople before.  They had been karate instructors, beach bums, nurses…there were a few that had sold, too, but they had not been particularly successful until they came to Fred’s shop.  So possibly, he thought to himself, Fred’s shop is so weird that the test is just not measuring what drives success here.

Jim called up the psychologist who had developed the test. 

“Ya know,” the Southern, folksy psychologist said, “we did gather some data when we normed the test that we are not currently gathering.”

“Why not?”

“No particular reason other than we had such a clear profile of success from the other data that we thought we probably didn’t need it.”

Jim just looked out the window, wishing he was doing anything other than having this phone call.

“Well, there is another reason, too.”

“What’s that?”

“The data have to do with dark side tendencies.”

“Which are?”

“Things like being suspicious, shy, sad, pessimistic, a sufferer, eccentric, loving risks too much and that sort of thing.  Not many managers want to hear that their top performers are high on these measures since, in extremis, they get you pretty close to mental illness.”

“So Fred’s top performers are nuts?”

“ ‘Nuts’ is not a word found in most psychology texts, but, yes.”

“So let’s measure the dark sides of the candidates.”

“And so we shall.”

And so they did.  Because they did not really know what they were looking for, they did more.  They quantified candidate profiles against the job requirements, which mostly had to do with their skills and prior successes, against the light side test scores and against the dark side scores.

Jim and Fred were having lunch.  They really did enjoy each other’s company, so they did not get to work topics until coffee.

“The first piece of stunning news I have to report is that we have an inverse correlation between candidates you have hired and their having done well in their past sales jobs.  If they were successful salespeople before they came here, they have left or been fired from your shop.”

“I told you that the karate instructor was the model we should be emulating,” Fred said, more serious than not.

“Then we found that there was no correlation one way or the other with light side scores on the test.”

“I told you that the test was no good!” roared Fred.

“And there is a very tight correlation between high dark side scores and strong performance.  Your top people are all nuts.”

Fred knew what dark side tendencies were.  And he knew he had them.  He just looked at Jim, for once in his life without words.

“Plus this: my recruiter has been living in your facility as you know.  He’s been taking his coffee breaks in your bullpen.  He has heard your Inside Sales Manager just beating up the new hires.  This might explain that several of the high dark side hires, whom you guys rated as stars, up and left suddenly.”

“So you are telling me that my environment and culture don’t match the people I’m hiring?”

“I am.  You are hiring eccentric and driven people who are pretty thin skinned and then your manager is beating them up.  It does not work.”

“OK, I get that he should not beat them up, but what kind of culture should I have?”

“You are a high dark side score person.  What culture do you want?”

“I make my own culture wherever I go!”

“Yeah, yeah.  And you fly, too.  Be serious.  Think back to when you were a kid.  What did you want your world to be?”

“I was surrounded by criticism.  I wanted unconditional love.  I felt different from other kids.  I wanted to be reassured that I was OK.”

Suddenly Fred’s face lit up.  “I got it! So I should provide that to my employees.  Unconditional love and belonging.”

“Yup,” Jim said.

Fred had gone back and made the conversion in his mind and actions.  Given that he was a man of extremes, it was not a surprise when the next day he started hugging all the new employees and telling them he loved them.  They were surprised and a few were a little put off, but on balance they liked it.  And they still quit.

“Why?” Jim asked Fred.

“I don’t know,” Fred answered.  Your theory must be wrong.”

“And your sales manager is abusive.”

“There is that!”

Fred went back again and started listening to the sales manager as he “trained” his new hires.  It turned out that “trained” meant berated, humiliated and scorned.

Fred fired him.  Jim helped him hire a new one.  The new one had the opposite problem.  Everyone stayed.  They just did not produce.

And the new sales manager, who was actually brought in as a VP, talked Fred into getting rid of the test and Jim’s recruiter.  He generated his own flow from his prior acquaintances and then hired the ones he liked…but they did not produce.  Fred go so enraged that he took over the inside sales himself, moved the new guy to outside sales and reengaged Jim.

Jim sat with him.  “You do know, I trust, that the research on good salespeople is that they start slow and take about six months to hit stride.”

“Not mine.  They do it faster.”

“But, considering for just a second that you might be wrong, I wonder if you gave them more of a conventional environment including a less enthusiastic training and a longer fuse, if they would not perform after a while…just like the majority of sales people.”

“I’m not abusive!”

“You are not as abusive as the guy you fired, but you do everything you can to make them go away.  Their training is like one big long stress interview.  Only the super-strong survive.”

“And those are successful.”

“There might be a better way.”

“Not for my shop!”

“Keeripes, you are stubborn.”

“And…I am right!”

So they kept hiring, not using a test or really anything else except Fred raging and swearing and threatening in the mass interviews.  Fred’s theory was that what he asked them to do, learning to sell his way, was difficult but could be mastered by those with extraordinary strong constitutions, those who were desperate to make a lot of money.  So he brought people in almost indiscriminately and then abused them in the interview process.  He hired those who responded right and were sufficiently drawn to the stress environment that they accepted his offers.

But they did not perform, either.  Jim suspected that they took the job to get the salary and then bolted as soon as they could find a less stressful job.

Fred hired a new inside sales manager.  Jim had personally watched over this search, including using a test.  The test showed that he was a mini-Fred.

“This guy is just like you,” Jim told Fred.  “Are you sure you want to hire a mini-you?”

“I’m not sure, but I’m going to try it.”

The guy reported for work with a load of inside salespeople who had told him they wanted to follow him.  Jim got fired again.  This time he was amused, not irritated. 

The new guy figured out in about a month that it was no fun working for an older clone of himself and took off.  The sales reps that he tried to hire him came in, sat through the stress interview and then left, never to be heard from again.

This left Fred as the acting inside sales manager with his payroll burdened with the VP who had been marginalized into an outside sales manager role and whose morale, and productivity, stank.

There is no happy ending to this story.  It is closely based on a real life experience of our company with a client whom I consider to be a close friend.  But his flaws prevent him from creating a stable, smoothly functioning organization that can grow.

He is not the only one.  Many entrepreneurs, me included, own businesses because we were lousy employees.  We are infantile and narcissistic, wanting to create an organization in our image, wanting to see ourselves reflected in our corporate mirror.

The only solution is to build a barrier of individuals who can both lead and follow between the entrepreneur and the rest of the organization.  This, however, requires trust, something the infantile and narcissistic have a hard time embracing.

The other issue this story drives home to me is that recruiting is very heavily influenced by the organizational context in which it is done.  Many recruiters try to do recruiting the same way every time, for every company.  They frequently fail.  The wiser recruiter looks at the organization, identifies the obstacles and resolves them.

If the organization wants to hire candidates who just don’t exist, or are not available for the money the company wants to pay, that issue needs to be resolved or recruiting will fail.  If a hiring manager does not want to hire because s/he is not sure of his/her boss and is afraid of being criticized for his/her hiring decision, that issue needs to be resolved or no hires will be made and recruiting will fail.  If the hiring manager makes erroneous hiring decisions, s/he must only be shown candidates who will succeed in the job, or turnover and low productivity will overwhelm what benefit the organization gets from filling jobs.

Recruiting, if fully done, is as complex as any other organizational matter.  Recruiting does not have a history of stepping up to that complexity, but, if it does not, recruiting will fail.

10 Best Practices for Managing the Aging Workforce

August 4, 2009 3 comments

 

by Richard Anthony, Sr.
View bio here

sponsored by HR Compendium

10 Best Practices for Managing the Aging Workforce

When introducing himself to the class I was teaching on managing the aging workforce, a Gen Xer in his early 30s said he had enrolled in my course because he was anxious about a promotion he was about to receive: supervising a group of people several years his senior in years and experience. A few of the Boomers in the class voiced a similar concern, but in reverse. They took the course in hopes of better understanding their “younger” coworkers or subordinates.

For the first time ever, we have four, and some people argue five, generations in the workforce. Each markedly different. Each variously hailed and reviled because of the myths about how they think and behave. All challenged to work toward common goals in spite of their differences.

The young man in my class had good reason to be anxious. Though bright and articulate, he had no prior supervisory experience. He did have the good sense to recognize that, without preparation, he risked failure in his first opportunity to exhibit the skills and competencies required of executives, managers and coworkers in today’s increasingly pluralistic and contentious workforce. Enlightened employers are devising new ways to recruit, develop and reward workers of all ages. However, studies show that most employers appear to be oblivious to the shifts occurring in the workforce and are therefore applying management principles and techniques that were better suited to the comparatively simpler shop floor and office venue of more than a half century ago, when the predominantly white male workforce was made up of Traditionals (born before 1946) and early Boomers (those born between 1946 and 1964).

In another time, the potential for stress among the generations gradually would have been dissipated by the natural course of events; that is, older workers would retire and move on to the next stage of their lives, making room for the generation eager to displace them. That historical phenomenon is no longer as predictable as it was for half of the last century and beyond. Because they can look forward to longer, healthier life expectancies and are accustomed to being busy, the majority of the nation’s 78 million Boomers approaching “normal” retirement age want to remain gainfully employed on a full time or part time basis. Furthermore, in hard economic times, they are not in a hurry to trade their paychecks and health care benefits for decimated 401(k) and IRA account balances. The reluctance or inability of the Boomers to move out so that younger workers can move up adds to intergenerational stress and, in my opinion, may ultimately lead to seismic intergenerational conflict over opportunity, compensation and benefits, especially health care.

Nothing short of a transformational overhaul of public and corporate policies can avert intergenerational conflict in the workforce. That could take a full generation. In the interim, employers who see the competitive advantage of recruiting and retaining older workers can adopt some of the best practices developed by organizations that are managing the shifts in the workforce rather than being victimized by them.

Best Practices

Any approach to managing the aging workforce must be undertaken within the full context of the four generations, not just the older generation. Here are some examples of initiatives employers can take to establish a work environment that values the past, present and future contributions of older workers.

1. Study generational composition of your workforce.
The first step is to take stock of what you’ve got by developing a census of the workforce by age, gender and skill level. Then plot the age data according to the four generations (Traditionals, Boomers, Generation X, Generation Y). Next, study the similarities and dissimilarities among the four generations to understand the underlying motivations for each group.

2. Prepare a workforce forecast.
Now that you know what you’ve got, prepare a forecast of the human capital in terms of competencies and experience your firm is likely to need based on certain scenarios. Do a side-by-side comparison of the workforce you have and the workforce you believe you will need three to five years out; then decide what adjustments should be made and how best to make them.

3. Train managers and supervisors about intergenerational differences and issues.
Most managers and supervisors need to step back from their daily routines to understand the causes of intergenerational stress. On the one hand, they must be fair arbiters of age-related disputes. However, they must also be aware of the emotional, cognitive and physical changes older workers experience and the possible influence on the worker’s ability to perform.

4. Match HR policies to the needs of the workforce.
HR policies should be reviewed at least every two years to ensure that they are aligned with needs of the employer and the employee. Older workers, for example, may need customized training or retraining, different types of communications and more time to prepare for the transition to retirement.

5. Be creative in designing compensation plans.
Cash compensation is important to all workers, regardless of age. As needs and time horizons change, however, how and when compensation is received become strategic issues for older workers who have the foresight to manage their assets for gain and tax effectiveness.

6. Include all generations on committees and task groups.
One very effective way to recognize the experience and skills of older workers is to include them on committees and task groups whose opinions and recommendations are solicited by management. It may be advisable to have someone outside of the group facilitate the first few sessions to help ensure that potential conflicts don’t impede communication.

7. Design and implement a comprehensive communication plan.
The differences among generations concerning sources of information are well documented. Communicating with older workers may require greater frequency and more dependence on print media. Older workers also tend to rely more on peer communications than their younger counterparts.

8. Offer lateral movement.
Boomers are achievers, but personal growth and professional advancement need no longer be equated with climbing the career ladder. Particularly in the later stages of their careers, older workers can derive personal satisfaction and make a valuable contribution by moving laterally or diagonally into a different position or function. Often, lateral moves can also offer greater flexibility as well as opportunities for interim assignments or mentoring.

9. Offer flexibility.
Flexible scheduling, job sharing, part time work, sabbaticals for community service and leaves of absence for continuing education are only a few of the ways employers can accommodate the lifestyles of older workers and retain the experience and know-how the company needs. Such programs must be designed carefully and implemented consistently to avoid resentment on the part of younger employees who may feel they are being disadvantaged.

10. Reward managers for retention.
People do what is valued, observed, measured and rewarded. Consequently, managers and supervisors should receive an unambiguous message that retaining older workers who can contribute to achieving organizational goals is valued, will be included in performance evaluations and will be rewarded.

Summary
Unlike their predecessors, the majority of Boomers want to remain actively engaged in meaningful work. In sharp contrast, most employers are either oblivious to the pending exodus of older workers or they are inclined to encourage it in the belief that older workers are expendable and can be replaced at less cost (cash compensation and benefits). As millions of Boomers approach normal retirement age, employers will be forced to make staffing decisions that may have long-lasting consequences. The solution is to plan for and manage the shift occurring in the workforce, to the mutual benefit of the employer and the employee.

Swallow the Bullfrog

July 28, 2009 Leave a comment

by Eric Herrenkohl
View bio here

52 Performance Principles Sponsor

A friend and I were talking recently about time management and prioritization. I told him that for me, the key to getting things done is to know the single most important thing I must do that day and to do it first. That way, it is impossible to get to the end of the day and say, “I did not get anything done.”
My friend looked at me and said, “That’s called swallowing the bullfrog.”

“Excuse me?” I said.

He went on to explain. “Swallowing the bullfrog means you have a hamburger on your plate, some fries, and a bullfrog. You are required to eat everything on your plate. What do you eat first? The bullfrog, of course, so that you can get it out of the way.”

Performance Principle: Swallowing the bullfrog means doing the important things first even if they are not enjoyable. In business you have to prioritize completing tasks that are not fun in order to get ahead.

That means:
1. Before you respond to your email, follow up with prospects that have not gotten back to you yet. Your email will still be there when you are done.
2. Before you spend more time on that deal that is about to close, invest an hour in setting up appointments with brand new prospects. Your current deal will close – but you will only have new deals to work on if you prospect now.
3. Before you spend an hour completing your expense report, spend an hour researching the executives of the company you are meeting with next week. Your productivity next week depends on your preparation this week.
4. Before you do anything else, call that customer who has a complaint or problem and get it worked out. In the end, everything we do is focused on creating a great customer experience.
5. Before you get involved in administrivia on your desk, follow up again with that prospect you met with two weeks ago. Don’t wait for prospects to become clients. Ask them to move to the next step with you or move onto other prospects.

The key to time management is to know your priorities and to address them first. If you keep that in mind, and are willing to “swallow the bullfrog” every day, you will get great results.

Identifying the Elusive Influencer

July 23, 2009 Leave a comment

Identifying the Elusive Influencer
And building programs to best leverage your most influential customers

by Auren Hoffman
Read bio here

Sponsored by Compendium 2009

Most companies internally assign a value to their customers that predicts how much money the customer will spend in the future, otherwise known as ‘Total Customer Value’ (TCV). Conventionally, the best way to determine a customer’s TCV is to look at how much they have spent in the past: United Airlines gives its best customers frequent upgrades along with a special express line, free drinks, and no charges (and higher priority) for checked bags. This is because these customers have spent a lot of money with United in the past which is a very good predictor that they will spend a lot of money with them in the future.

While calculating TCV from historical spending is simple, doing so does not value the customer based on the number of people they’ve told about your product and the resulting money these people spend. Yet people who convince others to buy your product can be more valuable than big-spending customers.

If Walt Mossberg — the technology columnist for the Wall Street Journal — buys your gadget, he’s likely to be your most important customer for years even if he never buys from you again. Mossberg’s true TCV should be off the charts! Mossberg is an example of an influencer.

Influencers are a small group of customers that have the potential to act as evangelists of your product. In cases where these influencers have bad experiences, they might actively tell people to avoid you (or actively protest your company).

Companies that understand the power of influencers are now proactively targeting them. FastCompany reported that marketers spend over $1 billion annually on campaigns targeting influencers – a figure growing 36% a year. But few companies have any idea who their influencers are and what to do once they have found them.

Identifying Influencers

Determining who is an influencer isn’t easy. Anywhere from 1% to 10% of your consumers are influencers. Below are some of the metrics Rapleaf uses to find influencers for our customers:
1.) Friend count. Someone with a lot of friends (online or offline) is more likely to be an influencer since they have more reach than the average person and can propagate their message to influence more people. People with many Twitter followers, readers of their RSS feed, friends on Facebook, or interactions on forums are all good candidates. While friend count is certainly a crude metric — there are many people with a large number of friends that are not influential — it is a quick and easy way to segment your customers and it actually works quite well.

Last year, we conducted a study on 31 million people analyzing friendships on social networks. Results of the study suggest that almost 20% of users had over 100 online friends, while a tiny fraction of users (<1%) are “super connectors” with over 1,000 friends. Imagine the reverberating effects of mobilizing these people. These are the customers you’d want to target with exclusive offers, benefits, etc.

graph1

2.) Social persuasion. Let’s assume John says he loves an obscure band on his MySpace page that none of his friends talk about. Then, two months later, 30 of his friends also list that band as one of their favorites. While it’s possible that John is an early adopter or that he just happened to listen to the band before they made it big, it’s much more likely that he is an influencer and told his friends.

Unfortunately, measuring social persuasion is not easy and can be quite expensive from a data-collection perspective. One way to gauge persuasion is to take snapshots of a person’s information at periodic intervals. By juxtaposing changes in information (such as music interests) alongside a social graph (who he is friends with), one can infer whether the person under consideration is influencer or more likely to be influenced. If a bunch of your friends buy the same product as you in the next few weeks after your purchase (which might be a six sigma event), there is a strong likelihood that you told your friends about it.

3.) Influence context measurement. Just because someone is an influencer in books doesn’t mean they are also an influencer in electronics. Matt Hurst of Data Mining blog looked at the categories of influence in the blogosphere and found that influence is a function of not only reach but also subject matter. Looking at the linking of blogs, Hurst found that Om Malik, for instance, has reach in the tech space, whereas Michelle Malkin has reach in the socio-political arena. On the other hand, Jeff Jarvis is influential on both tech and socio-political issues. Since influence depends on both reach and context and all three of these bloggers differ on both fronts, they are influential in different ways.

graph2

Some people will always be influencers – it is part of who they are – while others are influencers due to their current position (careerwise, within an organization, etc.). And that position might not be obvious. One wouldn’t think of a personal assistant as being an influencer but Reggie Love talks to the most powerful person in the world twenty times a day — he is President Obama’s personal assistant.

graph2

Influencers = $$$

After identifying influencers, how can you encourage them to promote your product? Here are some suggestions:
1.) Give them the best service. United Airlines provides frequent flyers with a special number to call and an exclusive web site to shop at. American Express offers their big spenders a distinct credit card with incredible perks including a dedicated concierge and travel agent, a personal shopper at upscale stores, first class flight upgrades, and no preset spending limits. You can do something similar with influencers.

You can put your influencers at the top of the customer service queue. Or have an executive personally call and thank them for being a customer. Retailers might consider sending hand-written “thank you” notes or providing priority shipping free of charge. In turn, influencers will tell their friends about you.

2.) Show appreciation. One way of making customers feel appreciated is by asking for feedback. Before finalizing a new product, get input from your influencers. Bare Escentuals does this for new cosmetic products. If you’re not soliciting feedback, at least give them sneak previews to new products. In return for showing appreciation, you can leverage focus panels and get critical input at no cost.

3.) Offer coupons and special discounts. Providing coupons and special discounts is a proactive form of customer service and marketing. Retailers can offer their top influencers unique promotions to keep them content and engaged.

4.) Employ special outreach. Rather than just sending influencers the standard newsletter, some political campaigns have interns reach out to influencers directly. Cultivating influencers give campaigns significant leverage to spread positive news about their candidate (and unflattering profiles of their opponents). Companies should follow suit to nourish their own evangelist network.

Now all we have to do is get companies to wake up and smell the coffee. Anyone willing to influence them?

(special thanks to Vivek Sodera and Michael Hsu for their help putting this together)
(if you like this, please send it to a friend)

See comments and comment yourself here or at: Summation blog on influencers

It Seemed Like A Beautiful Day

July 21, 2009 Leave a comment

How to Lose Your Perfect Candidate and Feel Like a Dope

by John Wentworth
Wentworth Recruiting

View bio here

Sponsored by Compendium 2009

“It’s a beautiful day,” Jim, the Recruiting Director of Acceleration Service said to himself as he walked from one building to the next. It was. The sun was shining, the temperature mild and the day was bathed in a gentle breeze.

“And it seems like a fine work day,” he said to himself next. He knew of nothing wrong. All the divisions were on plan with their recruiting. His teams were happy and engaged and their hiring managers were content.

“So why am I trying to talk myself into this?” he wondered.

The answer came when his cell phone rang.

When the call was over, he just sat down on a bench, looked to the sky and muttered, “I am such a dumb piece of dirt.” The sky seemed as if it had clouded over and the air gotten 15 degrees colder. All his earlier contentment was gone.

He had been personally recruiting to fill a critical job…for himself…a recruiting manager for a new division Acceleration had recently acquired. Part of Jim’s technique, and the technique he taught his team, was to close every attractive candidate in every conversation. His theory was that you want every candidate you might possibly want to hire to want you. In each conversation, he closed them a little more. By the time he got to a couple of conversations from making the offer, he had candidates closed, committed and ready to go, making the offer letter just a formality.

He had done that with this person, a very bright, hard driving and wonderfully skilled recruiting manager from a competitor of the purchased unit. She knew the industry, where to find the candidates and how to assess them. She also knew some of the hiring managers, other individuals who had moved her from company to Jim’s division.

Jim had a solid commitment from the candidate. She was being wooed by another company but had said unequivocally that she preferred Acceleration. Jim was under the impression that the candidate must have said something to the other company because they seemed to be backing off…by her telling of the story.

This call had been a reference, an individual from a third company in that same company that had been trying to hire his candidate. The reference had worked with her a few years before. Jim was being a little mischievous by seeking a reference from the company he had been competing with for the candidate, but she had given the reference’s name to Jim and approved his calling the guy.

“I’m really surprised that you asked about her,” the had told Jim a few minutes before Jim found himself sitting dejected on the bench.

“Why’s that?” Jim asked him.

“Well, I understood that she had accepted a job with our company yesterday.”

“You’re kidding,” Jim stuttered, knowing the reference was not.

Jim did what he could to get out of the conversation with his pride at least in part intact, and then sat down on the bench.

And then his phone rang again. It was his candidate. It was a difficult conversation. Jim was mad and embarrassed. Plus, the job was now open again.

“As it turns out, I never really had a chance,” Jim told Sarah Hockney, the general manager of this new division. She had been transferred from the division that provided Jim office space, and he had done a lot of work for her. They had become friends.

“How is it that you never hand a chance?” Sarah asked Jim.

“The president of her new employer called her directly to ask her to forget us and go with them. He’s not just the president of the company; he’s a relative of her husband’s. So her choice was me or a guy who could turn her entire in-law clan into her enemies.”

“So why are you so glum and confessing your sins to me?” she asked.

“Because I did not do it right. I did not set the example for my troops. Not only did the search not work, not only did I make an ass of myself to the reference, but I also will look really stupid to my troops. Hard to inspire confidence making sophomoric mistakes.”

“What mistake?”

“I didn’t defend against this.”

“I thought you told me that she had committed, that you’d closed her.”

“She had. I did. But the controller of our new division was behind the curve in so far as the budgeting for this job was concerned. They had to get the funding sorted out before we could make the formal offer.”

“You had no control over that.”

“True. And I told the candidate what was going on, but I did not call her every day. I relied on her word. I did not defend against a full court press from someone else.”

“Like this guy, but also from her company. They could have countered, too, no?”

“Yes, and there’s a whole technique of anticipatory defense against counters.”

“What’s that?”

“It’s the very simple sharing of the observation that, while the current employer may think that you are very important and wonderful now, and worth all this extra money now, how sincere can they be when they did not think any of those things before they heard you were going to leave? And if they are not sincere, is it not reasonable to think that they are recruiting your replacement right now? They don’t care about you. They just want your leaving to be on their terms and their timing, not yours. And if you do stay, how does your manager feel about your loyalty? Will you ever be in her or his good graces, really?”

“And you say that to the candidate?”

“Again and again, before they get our offer. Again when we present the offer. And again and again as we talk to them through their notice period. We rehearse with them what the company is going to say, how they feel when they hear that, what they are going to say in response, how they feel when they say that, etc. We also start getting them into the email traffic from their new department, and we get their new boss to call them, so they start of feel that they belong with us. We work hard to build the emotional connections during the notice period.”

“So what did you do with this young woman you are so anguished about?”

“Not enough. I did not talk to her every day. I did not ask what else was going on. I did not ask if her employer was proposing a counter offer. I did not ask what was happening with her new employer. I did get her into the email stream. And I did talk to her, but not often enough. It’s a stupid, sophomore move. I feel very stupid.”

“You are.”

“Hunh?”

Sarah smiled. “Being concerned, as I am, about your state of mind and emotional well-being, I want you to feel good about your analysis. You are right. You screwed up.”

“Your kindness overwhelms me,” Jim smiled back.

“However, I’ve known you for a long time. This division that I’ve been given like a bad white elephant gift, that I’ve been given to integrate into Mother Acceleration Service, that I’ve been given to fix, turnaround and do major surgery on. It will be fine, in great part because, while you do not yet have a halo or wings, and you occasionally screw up, you will support the person who replaces this person and your team will fill our halls with some of the best people available.

“I’m actually happy that she’s not coming because of how she handled it. She should have called you when she got the big call from her in-law and worked the problem with you. Her not doing so suggests a certain lack of understanding how teamwork actually works and that, were she still coming, would make me worry about her.

“So get out of here and find a replacement. I’ll bet you a coffee that you have the job re-filled within a week.”

“Thanks for the pressure.”

“Now it’s time for you to leave and go feel sorry for yourself in someone else’s office.”

Jim did. The first thing he did was tell everyone what happened. He wanted to support his reputation of being forthright by telling everyone in sight. They were, to a person, understanding and supportive. That felt good.

As Sarah had predicted, he started to get referrals that had not arrived during the first part of the search and were of better people. This was good because one of the consequences of the first part of the search is that the candidate he tried to hire was so much better than the others in the pool, that the others had lost their luster. Normally, Jim had one or more back up candidates for every job. But his lead candidate made the back up candidates back up candidates no more.

But the referrals were great. “I should write this down,” Jim thought to himself: “Sympathy produces great referrals. I can use that.” By the end of the week, he had a great candidate who wanted the job and had just come back to the area and was, therefore, available!

Jim walked into Sarah’s office. “Done! You owe me coffee.”

“Really?” She smiled. “How about now?” She reached for her purse.

“Now is great.”

As they walked to get coffee, Jim told Sarah how the new hire had come to happen. It was raining, so they had to trot to the next building to keep from getting soaked.

Even though they ran, they were good and wet when they trotted through the door. “It’s a beautiful day, don’t you think?” Jim said with a big grin on his face.

“It is a beautiful day. And I believe it will be all week,” Sarah replied and she patted him on the back, “because of the good job you did.”

All Jim had to say was, “Whew! Too close for comfort!”

Why Hiring is Paradoxically Harder in a Downturn

July 14, 2009 2 comments

by Auren Hoffman
Read bio here

Sponsored by Compendium 2009

Why hiring is paradoxically harder in a downturn
Noise goes up but the quality stays the same
Hiring is always hard. The hardest thing to do at a company is the recruiting and hiring. It was really hard when the economy was doing well. Paradoxically, for certain industries (especially those reliant on innovation such as those in the tech space), it’s even harder when times are tough.

That’s right … hiring in tough economic times can actually be much harder than when times are good. In a downturn, the amount of resumes from C-Players massively increases while the amount of resumes from A-Players probably remains the same.

Never settle

First, let’s assume you’ve already bought into the “When Good Isn’t Good Enough” philosophy of always trying to hire A-players because they are just so much more productive than B-players (an ‘A-Player’ by definition is incredibly productive and smart and has that ‘it’, that rockstar-esque factor that makes everyone want to work with her). That means you won’t settle for people who are good but instead hold out for people that are great.

Great people – the A-Players – are a very different breed from the good (B-Players) and mediocre (C-Players). Great people are more likely to be employed with a company since a great person is often over 3 times as productive as a good person. Joel Spolsky argues in Smart & Gets Things Done that an A-player is anywhere from 5-10 times as productive. Joel looked at coursework data from a Yale computer science class and found that the fastest students finished their workload as much as ten times faster than the slowest students (average was 3-4 times faster).

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Spolsky, Joel. Smart & Get Things Done. Berkeley, CA: Apress, 2007. p 6.

The (Un)Employed A-Player

In troubled economic times, anyone can get laid off, but a disproportionate number of layoffs tend to fall on C-players. This is because they are the lowest performing people in a company and there generally are more C-players at a company than any other caliber. Note that this isn’t always true, as evidenced with Yahoo!, a company that has recently experienced many layoffs but doesn’t have many C-players. In Yahoo!’s case, majority of the lay-offs fell on B-players and even some A-players. Yahoo! is an exception and is an exceptional company — most large companies, however, are chock-full of C-players.

A smart company would (or should) never lay off a great person unless her/his job function is eliminated. For instance, if a smart company had to lay off one of two software engineers with one being great and other being good, it will very likely lay off the good engineer and retain the great one (and might even give the great person a raise). Again, this is the logic that smart companies should follow. Then again, there are many dim-witted companies that lay off their great people for odd reasons and so you’ll find some great people out of those laid off.

Where to find that A-player

Some A-players are less likely to be looking to jump ship during tough times due to a risk adverse profile, security, financial reasons, or other reasons. They are happy where they are and more likely to hunker-down in tough times. On the flipside there are A-players that are MORE likely to leave. Tough times often paint companies into a corner and force them into maintenance mode rather than continuing to innovate. Great players love to innovate and usually NEED to innovate. It’s usually very hard to keep these type of A-players caged-up and thus this presents a big opportunity for recruiting.

For instance, in the past it was really hard to hire great software engineers out of financial behemoths like Goldman Sachs, Morgan Stanley, and JP Morgan Chase. These companies have outstanding people and pay these people really well (often 50% above the salary at a tech company). Nowadays, even if these people have not been laid off, the great people are going to be leaving in droves. Why? Because in the next two years, it is really doubtful they will be doing anything remotely innovative. Instead they will be maintaining current systems due to the understaffed and underfunded technology departments. No fun there so expect a big exodus out of these companies.

It’s also worth noting that great people are often first to leave sinking ships. They don’t feel they need to stick around for a severance because they are confident they can always get another job.

How to deal with the paradox

Let’s face it, these great, A-Player type people are just really hard to find. Let’s say for sake of argument that A-players make up 1% of the population that could do the job, B-players are 19%, and C-players comprise the other 80%. It’s uncertain if these percentages are accurate, but there definitely are more C-Players than B-players and more B-players than A-players. Now if people find out you are hiring (through a Craigslist ad, posted on careers page, etc.), it probably means you are going to get a massive influx of resumes from C-players. Many of these resumes will be indistinguishable from those of A-players (it’s always hard to distinguish on paper). Which means the amount of noise (aka undesirable hires) will likely increase. Which means more work sifting through these resumes and talking to many more people.

It’s important to screen for great people in order to turn the volume down on all the noise.

Unfortunately, it is really hard to tell the difference between an A-player, B-player, or C-player just from a resume. Which means you need to engage with candidates and therefore you’ll have far more candidates to deal with given this economic climate. My guess – for a standard job announcement, you’ll have three times the number of C-players applying, twice the number of B-players, and the same number of A-players. Wow…your noise level has just massively increased!

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At Rapleaf for instance, we have a written one-hour technical interview as the first screen for resumes we like. Last year, our pass-rate for the test was 17% … meaning 17% of the candidates passed the written interview and moved on to a second round (a live chat with a Rapleaf engineer). Today our pass rate is about 6-8%. Our noise level has really increased.

One way to decrease the noise level (and thereby increase the amount of quality) is to specifically target candidates rather than to post a job ad. I would suggest targeting a company you think has great people, call into that company, and try convincing the talent to meet with you. I know if I was based in Manhattan and was recruiting software engineers, I’d be calling on the people in the top banks. While not everyone at a top bank is a great player, your ratio of great-to-good is going to go up substantially (assuming they haven’t already left).

Of course, not every position is harder to hire in this downtown. It is easier to find great people whose industries have been totally decimated by this recession. You’re in luck if you are looking to hire investment bankers, corporate lawyers, construction workers, or people in manufacturing.

This downturn looks to affect us all for the next couple years, so be sure to fill your company with only A-players and thereby creating your own A-Team.

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