Hire Smart from the Start

The Entrepreneur's Guide to Finding, Catching, and Keeping the Best Talent for Your Company

Dave Carvajal, Dorothy Grover Bolton

• Publisher: AMACOM
• Year: 2018
• eBook ISBN: 9780814438275
• Topic: Business
• Subtopic: Entrepreneurship
• Index: Business

This book distills lessons gained from the author’s 20 years of experience, building out and staffing two enormously successful Internet startups and helping firms land the talent they need to reach their greatest potential.

Don't rely on instincts alone. Hiring is king and while the lesson seems so basic, so many good companies stumble and lose their stride just when they were poised for rapid growth. Why? Their leaders treated hiring as a tedious chore. They posted an ad hoc ad. Took the first person with the right skills. Hired for immediate needs, rather than future flourishing.

Whether you're a high-tech entrepreneur taking a startup public, or a food truck vendor with a concept that's taking off, Hire Smart from the Start offers a proven formula to help you: 

• Find candidates whose values and working style fit your business
• Spot the 5 types of applicants you should never, ever hire
• Motivate "reach" candidates to leave their jobs and take a chance on your vision
• Develop meaningful incentives that make people stay

Accelerate success: hire smart from the start. This book shows you how.

• CHAPTER 1 •

New Rules for a New Age

As you know better than anyone, the entrepreneurial environment has changed dramatically in recent years. It doesn’t matter whether you’re a sole proprietor working out of your home, a hot tech startup, or an old-fashioned brick-and-mortar business. The world around you is significantly different, and if you don’t respond and adapt, you’re going to struggle.

Moore’s Law, formulated in 1965 by Gordon Moore, the co-founder of Intel, was prescient in its prediction that the number of transistors in an integrated circuit would double about every two years. The larger meaning of the prediction (which has proven to be accurate) is that technological speed increases exponentially. As an entrepreneur, you are well aware of how technology has affected your business. It has brought in new and sometimes unexpected competitors (you’re competing with a small company in China that sells to your market via the Internet). It has created all sorts of new selling opportunities for you via social and mobile tools.

While these changes are numerous and varied, they have one overarching effect on entrepreneurs: Hiring the right people in the right way is crucial.

You may be skeptical about how much recruiting has changed, and whether you really need to custom-fit talent to your organization or accept only individuals whose values and work styles are compatible with your company’s culture. Perhaps you’ve experienced a significant amount of success in the past because you came up with a great product or service or hit upon an innovative strategy. I’m not telling you those things aren’t important. I’m telling you that they have become less important than people, and that your entrepreneurial mindset may be causing you to doubt this statement.

ASSESS YOUR PERSPECTIVE

How do you define yourself as an entrepreneur? If you’re like many people who lead startups or are founders of other types of enterprises, you possess some if not all of the following traits:

Ambition

A strong belief in the company, product, or service you created

Self-confidence

A near-obsession with financial issues

Pragmatism

Trust in instincts

I’m not knocking these traits; they probably helped you build your company. But they also predispose you to focus on individual effort rather than a team approach. They convince you that your ingenuity or the greatness of your product or idea can help the company succeed in the long term. And they cause you to prioritize strategy over recruitment, training, and teamwork.

In his book, The Hard Thing About Hard Things, Ben Horowitz, a Silicon Valley entrepreneur turned venture capital investor, talks about how tough it can be to start and run your own business. Horowitz has found that entrepreneurs take on an enormous amount of work as well as an enormous amount of stress. As a result they focus, sometimes myopically, on putting out fires and getting work done through bursts of superhuman effort. Unfortunately, they are so consumed by these tasks that they fail to pay much attention to other ones, such as hiring people who could make it easier for them and help the company become more successful.

Are you this type of entrepreneur? Answering three questions will help you make this assessment. Here’s the first one:

Do you think HR is a core process that will make or break the company?

The odds are, you view HR as a secondary function, a way to deal with difficult employees, handle legal matters (i.e., meeting equal opportunity requirements), and fill out forms. You, like many small business owners, see HR as a necessary evil—you know that if you need to involve HR in a business issue, then there’s a big problem (like an employee lawsuit). So you have a reflexively negative perspective on human resources.

At the same time, many entrepreneurs are involved in traditional HR process—your HR people may conduct initial employee interviews, for instance, but you’re the one who makes the key decisions, especially when it comes to your executive team; and you make those decisions by the seat of your pants. HR, then, does the grunt work, but you or another executive handle the “business” side of human resources.

Here’s the second question to determine if you’re the traditional entrepreneurial type:

How important do you believe culture is to the company’s success?

I don’t mean culture as in having an employee game room with ping pong tables and arcade games or putting signs on the wall like “We’re All in This Together.” These are superficial aspects of culture. Culture is really about values and the types of behaviors that are consistent with these values.

In fact, recruiting for values fit can do more than help your company grow; it may very well allow it to survive disaster. Consider the case of TriNet, a world leader in cloud-based provision of HR services such as payroll, benefits, and employer compliance. TriNet was founded in 1988. By 2000 it had grown to a company of more than 350 employees and was about to go public. Then the dot.com bubble burst. Not only did TriNet founder Martin Babinec have to shelve the IPO post road show, but as revenue plummeted, he had to reduce staff by more than half. The key to surviving what Babinec calls the company’s “nuclear winter”? Being able to retain TriNet’s best, most highly skilled talent in every division. Even in tough times, these folks were extremely marketable and could have chosen to jump ship. But they believed in TriNet’s values and its mission, and they stayed—allowing the company to survive and rebuild as the company rebounded, leading to a successful New York Stock Exchange initial public offering in 2014 and continued growth as a public company today.

Nonetheless, many entrepreneurs don’t esteem culture as highly as they do product development, strategy, customer service, finance, and other functions. It’s not that they discount culture; even entrepreneurs in the past sought to create a “family atmosphere” in their companies. But they see culture as a luxury, and the other aforementioned functions as necessities. For these entrepreneurs, culture is all about having a good working environment. But they see it as important for morale, not for business results.

And here’s the third question:

When push comes to shove, do you feel that you alone are responsible for the company’s success?

Entrepreneurs need their egos. You must possess chutzpah to be an entrepreneur, to take the risks necessary to succeed. For this reason, it’s not unusual for some company founders to believe that they and they alone can save the company when it’s in trouble or grow the company when opportunities present themselves. Yes, they value their employees, but they know the business better than anyone and they alone possess the experience and expertise necessary to make the tough decisions and to evaluate what risks are worth taking.

If you answered yes to any or all of the questions, welcome to the club. This entrepreneurial mindset is pervasive and served companies well for years. Today, however, things have changed. Let’s look at these three factors and how a new mindset is necessary to succeed in a changing world.

CULTURE EATS STRATEGY FOR LUNCH

This subhead is a great bumper sticker that all entrepreneurs should stick on their cars. As company after company is discovering, culture isn’t a “soft” asset but one that translates directly into productivity and profits. If you are skeptical, think about the world’s best companies: Apple, General Electric, Johnson & Johnson. All of them have strong cultures, and all of them recruit and promote people whose values and behaviors align with their cultures.

In entrepreneurial businesses, culture has become equally critical for success. If you look at startups, you’ll find that the most successful are the ones that have strong cultures. Salesforce, Facebook, Google, Amazon and others have well-defined cultures and recruit people whose beliefs and behaviors are aligned with these cultures. They do this not because they want to work with people who think and act alike (in fact, they value diversity of ideas and personalities) but because they know that values-consistent cultures create highly profitable companies.

Why is that? Think about a fictional company called Klingon, Inc. If you’ve ever watched Star Trek, you know that Klingons are a highly aggressive race of warriors. So Klingon, Inc. may have the opportunity to hire as their CMO one of the most skilled marketing people on the planet (or planets) who during interviews suggests a marketing strategy that strikes the Klingon leaders as brilliant. But this “ideal” candidate who meets all the specs happens to be a nice guy—he’s very laid back, believes in participative decision making and reaching consensus before taking action. If he’s hired, he will be a disaster for Klingon, Inc. because his values are antithetical to those of the culture and the Klingon CEO. He will create all sorts of dissension if he’s hired, and his poor fit with the culture will subvert whatever marketing contributions he might make.

In the past, companies could live with cultural misfits; entrepreneurial organizations often did. You probably are aware of family businesses where internecine struggles between family members created all sorts of problems—decisions reversed, favorites played, nepotism entrenched. Yet back then, there was a greater margin for “error.” Competition wasn’t as fierce, and companies with good capital resources and strong products and ideas could overcome an inconsistent cultural composition.

Today, as I outlined in the introduction, financing is plentiful for many reasons—venture capital, low interest rates and so on. Great products and ideas are also abundant, due in large part because of the speed of information and how innovations can be identified and reproduced faster than ever before.

So entrepreneurs need a competitive advantage, and that advantage is a group of people rather than a strong individual at the top. I’m not discounting the value of a strong leader; I’m just suggesting that it’s no longer enough.

The most successful startups are often the ones with great, value-consistent teams. Many times, founders create these teams organically; they recruit college friends or other colleagues with whom they share similar visions and work styles. Though they’re not consciously trying to create a startup where people share the same mission and values, they do so based on their “natural” recruitment methods. As a result, these startups move forward with astonishing speed and success. They don’t get bogged down in counterproductive clashes over how to get things done or in arguments for different agendas. They may (and probably do) have different personalities, skills, and ideas, but they are working in alignment and adding magnitude to their vector because they are all of one mind.

Napoleon Hill, author of Think and Grow Rich and other books, talks about how when two brains come together, this melding of minds creates energy; it is the concept behind Mastermind groups, teams of people who rely on “collective intelligence.” Michael Leavitt, former Utah governor and former head of the Environmental Protection Agency and Health and Human Services, co-author of Finding Allies, Building Alliances, wrote about the need for collaborative effort in the twenty-first century; how the world has become more global, more interconnected and more competitive, favoring agile groups of people with “collaborative intelligence” over the old pyramid and command-and-control structures.

What all this boils down to is that entrepreneurs who recruit the right people will succeed while those who recruit the wrong ones—or who try to do everything themselves—will fail. No less an entrepreneurial guru than Dan Sullivan espouses recruiting as a critical entrepreneurial skill, and he cites a historical example to make this point. Sullivan, founder of Strategic Coach and someone who has provided insightful advice to small business owners for years, views Thomas Edison as the prototype of the modern entrepreneur. When I talked to Dan, he explained, “[Edison] set the model for an individual who is self-made, who comes up with an idea, knows how to organize himself, knows how to put teams [together], knows how to attract investment, knows how to package it, knows how get it out to the marketplace.” Right in the middle of reciting this list, Sullivan said that Edison knew how to attract talent and assemble teams, and that’s one of the things that made him a giant.

Too often, though, we neglect developing and using this skill, as the following example illustrates.

GROWING LIKE CRAZY, INSANE RECRUITING

Kevin was the founder and CEO of a New York City–based online marketplace that was one of the fast-growing small companies in the city. Kevin was a great strategist and his previous two startups had also done well, but this one was really taking off, and he needed to add people quickly to keep up with the rapidly expanding business. Kevin, a disruptive innovator, had a grand vision of what his company could be, and he kn...

Table of contents

• Cover
• Title
• Contents
• Acknowledgments
• Foreword
• Half title
• Introduction
• 1 New Rules for a New Age
• 2 Slow Down, Use a Process, Move Beyond the Specs
• 3 Recruiting Myths and Realities
• 4 Evangelical Zeal and a SEAL Team’s Focus
• 5 Map the Organization’s Foundational Mission and Values
• 6 Seeing Your Perceptions and Their Realities
• 7 Drivers: Mapping the Candidates’ Missions and Values
• 8 Extract the Matches
• 9 High-Level Hires: Leaders and Managers
• 10 Finding and Recruiting People Who Get Things Done
• 11 Your First Hire: Bringing Entrepreneurial Energy and Agility to a New Skill Set
• 12 The Employee of the Future: Recruiting with an Eye Toward Emerging Trends
• Index
• About the Author
• Free sample from Lead with a Story by Paul Smith
• About AMACOM Books
• Copyright