October 30, 2005
Recruiting best practices- why not now?
I was reading Sharon Begley’s column in Friday’s (October 28th’s) Wall Street Journal (the Science Journal column that I could not figure out how to access online), where she describes and experiment by Daniel Gilbert, professor of psychology at Harvard University, and some of his colleagues:
“…Prof. Gilbert and some colleagues told female volunteers they would be working on a task that required them to have a likeable, trustworthy partner. They would get a partner randomly, by blindly choosing one of four folders, each containing a biography of a potential teammate. Unknown to the volunteers, each folder contained the same bio, describing an unlikable, untrustworthy person.
The Volunteers were unfazed. Reading the randomly chosen bio, they interpreted even negatives as positives. ‘she doesn’t like people’ made them think of her as ‘exceptionally discerning.’ And when they read different bios, they concluded their partner was hands-down superior. ‘Their brains found the most rewarding view of their circumstances,’ says Prof. Gilbert.
The experimenter then told the volunteer that although she thought she was choosing a folder at random, in fact the experimenter had given her a subliminal message so she would pick the best possible partner. The volunteers later said they believed this lie, agreeing that the subliminal message had led them to the best folder. Having thought themselves into believing they had chosen the best teammate, they needed an explanation for their good fortune and experienced what Prof. Gilbert calls the illusion of external agency.”
While the article was about what makes people believe in God (an external agency), it struck me that this is exactly the trap that we all find ourselves in during the recruiting process if we are not careful (Just so that I am clear, everyone gets caught in this trap more often than they avoid the trap unless there is a disciplined process that they follow.)
Do you find the most rewarding view of your circumstances when you have a job candidate that you like? (For example, find a candidate that you think will work in the open position, don’t “waste your time” on other candidates, and get more convinced of the candidate’s fitness over time?)
Do you have an illusion of external agency? (For example, do you believe that you are fortunate to have “unique abilities in hiring”, “a much higher than average IQ”, “luck”, “God on your side”, or some other agency?)
In my experience, everyone, including me, has these tendencies. I have also found that these tendencies lead to hiring “B” caliber employees and thinking of them as “A” caliber employees, which has the obvious business results (I have not met many people who disagree that an “A” is better than a “B” most (all?) of the time, so I leave this argument alone for now). Since expansion stage companies are all about scale up and scale out, this issue is particularly important.
Three Key Process Elements
So how do we fix this inherent humane weakness? I have found that there are three key elements to constructing the “best practice” process that have never failed to identify the best “A” caliber candidates:
- Start by talking to as large a group of qualified candidates as is reasonably possible. I believe in staying highly networked, and this leads to knowing a great group of people, but when it comes to a serious search for a senior position, I am a big fan of using executive recruiters (the serious ones who do serious work in talking to the right candidates) to help expand the base of candidates. For mid-level and junior employees, I am a believer in hiring internal recruiters (not cheap, but more than pay for themselves as the company is scaling up staff…the key is that the pace of hiring needs to justify the role).
- Have three levels of “screens” to narrow the candidates. I have found that it is exceedingly difficult for an interviewer to pick the best candidate from a large number of candidates. Somehow the brain goes numb after seeing a lot of candidates and, no matter how well the interviewer takes notes, it just isn’t possible to identify the absolutely best candidate. What does work, however, is being able to choose the better candidates from all the interviews and pass those candidates onto the next “level” of screens by a different set of interviewers. Three levels of screens will allow someone (a recruiter?) to start with a large number of candidates and do the first screen, a second set of interviews with a second group, and a “final” set of interviews (a deep evaluation) by a third group, each time passing the best candidates through the screen. (Each screen should have more in-depth interviews with more “qualified” interviewers in order to perfect this process).
- (Most important) Have the right group of qualified people evaluated the final 3-4 candidates. The key here is getting the right group of interviewers together. In my experience, most managers are capable of determining the best candidates for only one, possibly two, functions. The best developers can tell you who the best developers are, the best architects can tell you who the best architects are, and the best inside sales managers can tell you who the best inside sales managers are. However, asking a developer to choose the best inside sales manager doesn’t work. (In my global investing experience, cross-cultural/cross-language evaluation is equally difficult. For example, asking someone from Europe to evaluate Americans generally leads to worse results than Americans evaluating Americans and visa versa). This is true because most managers have seen a lot of candidates over time for a particular position (and in a particular culture/language), see the results of their hires, train the neural network, and know the questions to ask and the things to look for that separate out the “A” caliber candidates (i.e., they have the right historical “database” from which to examine candidates against). The key to choosing the best candidate is putting together the most qualified group of interviewers for the position you are hiring for. (As a side note, I have found that experienced Venture Capitalists are actually quite good at contributing to the process at this stage for many positions, as they have built up their database of experience in many of the most important positions, they ask a lot of good questions, AND they tend to push for the inclusion of the right evaluators…in a lot of ways, good VCs are professional interviewers).
Some Additional Thoughts:
- The process that I outline gets more complex as you work through the candidate’s view of the process. Most “A” caliber people believe that it is obvious they are the best, and want to be “courted,” so you need to be careful not to construct a process that is perceived as mechanical or “low touch”. I have also ignored the role and responsibilities, the company culture, compensation, and other factors that make the company more or less attractive to the “A” caliber people you are trying to recruit (Perhaps another posting sometime).
- There is an additional side benefit from following this process. That is, it is very difficult up front to put together a description of the ideal candidate that appropriately weights all of the factors that make up “ideal.” The process outlined above allows for adjustments to the hiring criteria as “the land of the possible” is compared to “the theoretically possible” as the best candidates move through the process.
I give this advice all the time. Some management teams get it right away and adopt it (or have already discovered this process) and some management teams need to fall into the traps of “most rewarding view” and “external agency” a few times before they “get it.”
I have never seen a great emerging growth company that does not eventually adopt steps substantially similar to the steps I outline above (including Microsoft and Google). So my question to you is “why not now?”
End Note: My apologies to Daniel Gilbert and his colleagues if I have taken their experiments and results out of context. I believe that their experiments are applicable to hiring practices, but I have not done the primary research to find their experiments, findings, and conclusions.