Hires are Not "Good" or "Bad." Your Org Makes Them So.
In work breakups, it's often you, not them.
Welcome to the latest entry in The Captain’s Log. You’re in good company with thousands of fellow entrepreneurs and innovators who have subscribed!
I’m your host, Bob, and my mission here is to share personal, behind-the-scenes stories of ups and downs from my career leading tech startups and corporate innovation.
I write to make you think, smile, and discover a shortcut to success or a trap to avoid.
Here we go…
There’s a line of thinking in leadership circles that most workers today don’t seem to want to work. Phrases like “quiet quitting” and “lazy girls” get thrown about by frustrated CEOs. Some back up their opinions with a recent Gallop poll that reported 65% of U.S. employees are disengaged at work.
The solution most thrown about is to spend a lot more time identifying the minority of people who still care about their jobs. This author suggests a 5-step process to uncover underperformers. Each step has multiple sub-steps ranging from assigning temporary projects to using clever wordplay to throw people off their game. Another idea, Top Grading, is gaining traction. This model involves interviewing candidates’ former managers and co-workers much more than the actual prospective employee.
I call bullshit.
“Tougher grading” not only adds a crazy amount of time and skill development into an interview process that will always be full of flaws, but also assumes that human beings are either Over or Under-Performers—as if we get a grade on a test and are stuck with it for life.
Humans are much more like seeds of potential, and the ground you plant them in—your organization—is what mainly allows them to grow and bear fruit. I know this is true because I’ve made this mistake and hurt some friendships in the process…
Re-Hiring Old Friends
I first realized I had to build a startup someday in 1997 when I began business school. The “interactive” world was gaining steam, and I saw this as a revolution in business that would open up vast opportunities to create value and challenge myself. But I tend to play the long game. I took a job in a traditional company that needed me to help them shift to digital marketing, and then I joined good friends to become a partner at a digital agency that further helped these BigCos cross their chasms.
My eight years on the digital agency side gave me an understanding of what it takes to be an entrepreneur and exposed me to the people and processes necessary to build software. While I focused on doing my share to deliver the business each day, I frequently thought of a future leap to my own startup. And those thoughts often went to thinking about the people I’d love to bring to my future company when the time came.
As we all know, working side-by-side with someone is the best test of their skills and character. And I was fortunate to work with many high-quality people through some of the toughest challenges in the business. I squirreled away notes about who I might ask to join me one day and had many after-hours exploratory conversations to see who else might want to make the leap.
Eventually, we sold our agency, and I left to plot my startup path. Within two years, I met my co-founder, we launched our business, and raised money to power us. That’s when I started calling people from those squirreled-away notes. There were over 100 people I would have loved to work with again, but a relative handful fit our business's unique needs at the time.
Five of our first twenty hires came from luring over my former co-workers. Some got excited by my vision and our relationships, while others wanted an escape from the bureaucracy our old company had turned into. I expected our work together to be awesome again, but it mostly wasn’t.
Here are two examples, with names and situations changed to protect the innocent…
Steven the Seller
Our initial product was a subscription-based software application for Pinterest marketing optimization. I spent the first nine months doing all the sales for our company. Like any new product and category, it was fits & starts to get going. I’m not the best seller in the world, but I worked my network to get meetings and improved both my skills and our presentation through repetition.
But we needed to sell more, faster in order to hit our investors’ expectations and to get revenue up to the point where we could tell a story that would help us land our next, bigger round of VC money. It sounds ridiculous, and it is. But that was the game we and many others have played…
We needed more sellers to grow sales, and I had the perfect idea for the first one besides me: Steven. I saw him build a new business line within our agency years ago, and I figured he would be an outstanding addition to our team. Steven was intelligent, great with clients, and highly energetic. I reached out to him and was delighted to hear he was starting to look for a new opportunity, and he was excited when I shared more about our business. Steven had moved far out of state, but I felt fine that we already had a strong relationship—and salespeople spend most of the time on the road anyway. He agreed to work with us and met me the following week in Vegas for a large industry trade show.
Over the next few weeks, I brought Steven up to speed by having him join me on sales pitches. He seemed comfortable, and I was eager to pass him the baton. We aligned on goals, and he started getting after it.
Steven made almost no progress.
He failed to get meetings, couldn’t develop an outreach plan, and seemed stuck in the water. My co-founder and investors questioned his abilities and my judgment. Our conversations got tougher and tougher. I couldn’t understand what happened, but I had to make a hard call. Within a few months, it was clear that this wasn’t working, and I had to let him go.
Steven found another role quickly, and his career is flourishing. But our friendship ended there, and we haven’t spoken since that day ten years ago. I was too eager to throw him my role, and we didn’t do the work upfront to ensure it was a fit. I really need to apologize.
Amy in Client Success
Amy was one of my favorite client success leaders at our agency, and she was the first friend to reach out when she heard we were starting a company. Unfortunately, her call came before we had funding, and I was wary of a non-solicit agreement from my previous company that still had several months to go.
But we stayed in touch, and about a year later, the stars aligned, and I brought Amy over to be one of our early hires. She started with a bang—taking leadership of big client accounts and helping younger staff learn the art of client service. Our company was still crazy, and every day we struggled to put out fires and figure stuff out as we went along. Amy kept up long hours and high pressure through these days of two steps forward, one-an-a-half back.
I thought she was happy until about 17 months into the job when she sent me one of those late evening “Grab time tomorrow?” Slack messages. I knew what to expect and didn’t sleep well that night.
Amy told me she had to resign. Our company was a mess, and she wasn’t able to do her best work. As a single mom, she was under more pressure than most. The work and our declining company prospects forced her to seek more stability. I couldn’t argue, and we sent her off with a happy hour to celebrate her contribution. I understood her situation and decision, but it sure sucked.
Soon after leaving us, Amy found a fantastic job with the stability she needed but stretched her in new directions. We’ve remained friends. Leaving our company was probably the best career decision she ever made, but it left me wondering what I got wrong.
It’s Not Them, It’s You
After these examples and many others, I eventually figured out that star talent doesn’t shine in every situation—and as the leader, it’s my job to make sure I’m either providing the support they need and/or warning them that the early stage startup path isn’t for everyone. Our company was incomplete, and I was still learning to be the leader they needed.
My friend, Tyler, shared some great perspectives with me recently on the topic of talent:
“I've invoked the concepts from the book Fooled by Randomness many times over the years, in many contexts, not the least of which has been in judging talent. We often over-state an individual for their successes and under-state those who likely experienced the wrong side of the standard deviation, for no fault of their own.”
Other experts and research sheds further light on this point. A study of highly-trained, highly-accomplished GE alumni in Harvard Business Review showed that:
“Even gifted executives with the best and most admired management training don’t necessarily make star CEOs. By probing the facts behind such fabled talent, we concluded that companies need to look beyond corporate pedigree when choosing a new leader and that the type and likely portability of an executive’s skills are better indicators of a good match.”
In the book Chasing Stars: The Myth of Talent and the Portability of Performance, the author conducts a long-term analysis of the careers of top-rated investment analysts. In this industry, analysts are like their own brands and do tremendous individual work in researching and building client relationships. Even so, their performance varies greatly when they move to a new company.
The research shows that stars who move jobs usually fade at their new firms despite doing the same work, covering the same companies and industries.
“Stars’ performance decreased sharply, for a prolonged period of time, following a move. Despite 85% of them saying their performance was entirely independent of their firm.”
These stars didn’t realize that their company support system and peers played an essential role in their success. They tended to move to new employers because of the lure of higher pay. Those new employers had to pay more because they were less supportive and successful. But higher salaries didn’t translate to higher performance.
As for the 15% who stayed consistently strong—they moved to companies that had supportive cultures and were better fits for their skills. The research also showed that people from worse companies do better in strong ones.
Hire Differently at the Early Stage
Eventually, our startup team found a path to success. After years of flailing, we found product-market fit and shifted from zero to one. I became a better leader in the process and led a company-wide effort to codify our culture, and started spending most of my time designing a high-performance organization. I’ve written a lot in the past months and will continue to share more on how to grow companies where all employees can be challenged, committed, and succeed—not just some 30% B.S. that the experts talk about.
But what about those of us founders or employees at startups in the early stages? Well, there are a few things I wish I’d done differently. The biggest is hiring people who have previously worked in companies in those stages. If they’ve survived those times and are still up for another run with your company, this experience is a better determinant of success than any degree, test score, skill, or past company experience. Bonus points are assigned if their last startup fails and they still want to return to the game.
Today, in our recruiting business, we mainly work with early-stage startups and almost always agree to prioritize people who have been there before. They also like that we’ve been in their shoes and know the important X-factors. Probably a third of our clients come to us after having to part ways with someone who worked at a massive, sexy brand like Facebook or Amazon. Those big companies hire and develop tremendous talent, but the day-to-day is nothing like a startup of 15 people trying to turn nothing into something.
There are a few other best practices that I’ve learned the hard way, including:
Deeper reference checks with back-channel connections to make sure the candidates react well under fire.
Be careful not to get people—especially friends—too excited. Founders’ passion can lure people into following them into a path that isn’t always right.
Do some kind of test together. It could be a side project or shadowing in the office for a week.
Try to scare people off before they sign on. Tell them how this job will be challenging, and describe why other hires have not worked out.
For what it’s worth, I hope that even the struggles that Amy, Steven, and many others experienced in early-stage startups gave them a valuable experience. Whether they go on to the next one or run away for the relative safety of a BigCo, what didn’t kill them made them stronger. And they proved to themselves and the rest of us that they had the courage to try.
How we might work together…
My team and I lead Hearty, a tech-enabled recruiting service that helps early-stage startups hire proven talent. Our senior team of repeat-exit founders sources and screens, saving you time and money. When you need help, let’s chat.
Feel free to schedule time together during my Open Hours for questions, feedback, networking, or any other topic!
BONUS: Cool Content of the Week
A little something I found meaningful. You might agree…
I’m a huge fan of the Waking Up app. It starts with wonderful guided meditations but adds many guided talks from approachable experts. I thoroughly enjoyed The Art of Noticing this week during a long walk. It helped me better appreciate the everyday specialness of life that’s available when you look up from your phone. This link will give you a free month of the app (no credit card required).
Great story, very relatable and pragmatic. The days of interviewing for hard skills only should be long behind us...
Also, I just downloaded the Waking Up app - this journey of mindfulness has been my jam as of late so thanks for the recommendation!