Episode Transcript
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Speaker 1 (00:00):
I'm trying something
new this week by releasing a
shortened highlights episodealongside the full one.
It's designed for those of youwho may not have time to listen
to the whole episode.
Perfect for a quick commute orbusy day.
But, to be honest, it's morework and my ADD brain isn't
(00:21):
entirely convinced.
This idea is worth continuing,but I wanted to experiment and
see how it goes.
Speaker 2 (00:32):
How many classes in
high school did you take on
hiring?
Anne, zero, and how aboutcollege?
Zero and like okay, so it'snobody's fault that almost
everybody is terrible at hiring.
The result we have a 50% errorrate in hiring.
If you survey your listenersand say, hey, just reflect for a
(00:53):
moment on your last few hireswho have been with you for you
know over the last two, threeyears or so, how many of them
would you say you weren'tsurprised.
They performed as advertisedand you're happy that you hired
them.
The number is 50%.
It just is across regions,across SIC codes, across
industries.
And what I learned from readingall the psychology stuff in my
(01:15):
PhD program in psychology onthis topic and then practicing
it and refining it over the lastthree decades, is you can
achieve a 90% hiring successrate if you follow a couple of
best practices it's actuallyfour best practices but if you
don't follow them you're doomedto a 50% success rate.
Stop chasing the what andreally allocate more time to
(01:38):
solving the who.
Do what Rob Waldron did.
So check this out.
He was stuck at a $13 millionvaluation for his business Not
bad.
He listened to someone in ourcompany give a keynote speech
about 10 years ago, saying stopchasing the what and really
allocate more time to solvingthe who.
So he said all he did to changehis leadership approach, his
(02:01):
management approach was to gofrom spending less than 5% of
his time on hiring anddeveloping his teams to spending
about a quarter of his time onit.
So that's a lot of time, 25% ofyour time, that's a lot of time
, right?
And he said all I did was reallyfocus on what are the two or
three key hires I need to bemaking right now.
And rather than looking at oneor two or three candidates, I'd
(02:22):
look at dozens of candidates andI'd get referrals.
And he practiced the fourmethods that you and I are
definitely going to talk about.
He followed the correctapproach to hiring.
He spent the right amount oftime on it and his $13 million
business turned into $30 million, turned into $500 million,
turned into a billion, turnedinto a $5.2 billion business
(02:44):
over a decade.
And I said well, come on, whatelse happened in the business?
He said I didn't do anythingdifferent other than change from
not really focusing on thetalent part to really making it
a major allocation of how Ispend my time and then just
getting the next two or threekey hires.
Right has made all thedifference in the world, okay so
here's what to do.
You do these four things, andthe four things are called
(03:04):
scorecard, source, select andsell.
What are the outcomes youexpect this person to achieve in
this role?
A big, big, big, big mistakeentrepreneurs make.
I'm talking to you, ann'sentrepreneur business starters
out there is.
You hire your cousin to be headof marketing and then, oh yeah,
(03:25):
your next door neighbor is likeyour product person.
Knock it off with the hiringthe warm bodies who happen to be
around you.
Okay, knock it off with that.
That is your business is tooimportant to just hire whoever
is just around you like stopthat, get a huge pile of
candidates that you'reconsidering.
That's like step, step.
Two Takes a candidate like afinalist candidate, like someone
(03:46):
you're pretty sure you want tohire.
That's when you wheel out thisheavy duty interview and you
basically just walk them througheach of the chapters of their
career and you talk abouthighlights and accomplishments.
You talk about low points andthings that didn't go well For
each job they've had.
You're asking them what werethey hired to do?
What did they accomplishthey're most proud of?
What were some examples ofmistakes or things that didn't
(04:09):
go well?
Who did they work with?
And this is a great one.
Watch this, what was yourboss's name in that job?
And then they tell you and thenshow them you're writing the
boss's name down Ooh, susanJackson.
And then ask them to spell theboss's name Like, how do you
spell Jackson?
And they'll say you knowJ-A-C-K-S-O-N.
(04:30):
And then write it down Great.
And then you say, oh, at somepoint in this process we might
ask for your help setting upsome reference calls, if that's
okay.
And then the candidate sayslike, yeah, that's fine.
And then you say, great, whenwe talk with Susan Jackson,
what's she going to say wereyour big strengths and
weaknesses?
When you work together and asentrepreneurs, we have to sell
like heck to land the A calibertalent that you want to bring
(04:54):
into your business.
Because, guess what, they'realready gainfully employed
somewhere, doing well, makingmoney and making impact and
treating their colleagues wellsomewhere else.
So you have to really put thesell on them in order to get
them to say yes to joining yoursmaller company.
To me it's all about getting thedata of what they've actually
accomplished and gettingexamples of it, getting the real
(05:14):
numbers, verifying it withreferences.
That's what good hiring lookslike.
It's great to give people veryhonest feedback.
Give them a lot of feedback,give them more feedback than
they even want to hear it sothey really understand where
they stand, really be clear onexpectations, really be clear on
steps that they could do inorder to perform at the target
(05:36):
level.
The number one regret the last Idon't know thousand managers
we've advised or worked withwill tell you is waiting too
long to remove a low performingcolleague.
And I'm telling you, if thatperson's also culturally toxic
and is like being mean to peopleor mistreating juniors or doing
anything bad, that's likecultural deep.
(05:59):
That is very, very costly.
You got to have those chatswith the people.
If there's like values abusersat your company, get them out,
pronto, pronto, pronto.
Maybe not even a whole lot ofcoaching and feedback, because
it's just so costly to thosearound.
Someone was talking about thedifference between working in
your business versus working onyour business and a light bulb
(06:22):
just went on and sirens soundedand I was like wait a second, I
can work on the business withoutworking in the business.
You know, I was carrying a 20client load, like I was in it,
in it, in it, and then I lookedaround in 09 and we all were
like, okay, who wants to runthis thing?
I was like I don't need to runthis, like I'm a proud founder
(06:45):
and sort of chairman here, butif someone else wants to step up
and run it, like a show ofhands.
And so we picked Randy Street,the co-author on the who book.
So we had worked really welltogether on the who book and he
is an engineer by training.
He's a Harvard MBA.
He worked at Bain for like 10years.
He ran a company.
He had operating chops, as wewould say, not just consulting
(07:07):
skills and so he became thepresident and managing partner
in 2010.
And he 10X'd the business overthe next 10, 11 years.
So I mean it wasn't like howdid I do it?
Oh, I picked Randy, randy didit.
I mean it wasn't like how did Ido it?
Oh, I picked Randy, randy didit.
I mean it was like literallylike that simple.
I would highly recommend to yourlisteners, highly, highly,
highly recommend for gosh sake,find someone to help run your
(07:31):
business.
Maybe it's a muscular CFO whocould play the role of COO.
Maybe it's like you do what Idid hire a president to run the
day to day, run the really runthe business, run the meetings.
A lot of small mediumbusinesses owners are like oh
you know, no one, I wouldn'ttrust anyone else to run the
business.
And that's probably truebecause their hiring process
(07:51):
stinks.
They shouldn't trust otherpeople to run their business.
But if they improve theirhiring process and they really
find some excellent talent, forgosh sake.
I shall now quote Warren Buffett, who said hire well and manage
little.
Don't micromanage your starperformers or they will leave.
But if you align on goals, youhave a great culture.
(08:14):
You're willing to delegate andlet people have room to operate.
You reward and incent when theyreally do well so they can
share in the upside.
You're good.
You're going to be golden.
As a small business owner,you're going to find yourself
suddenly a medium business ownerand, spoiler alert, freedom
makes people happy in theworkplace.
When you have freedom to chooseand you have control over your
(08:36):
time, you're way happier than ifyou're living in a more
coercive environment.
We've written four books as afirm.
We published that.
They were all bestsellers.
We for sure should write a bookon culture.
We haven't yet, but I'll giveyou my secret sauce here.
There are five things yourlisteners can do to manage their
culture.
To like create the culture thatthey think is going to win the
(08:57):
day.
The five things are who youhire.
Create the culture that theythink is going to, you know, win
the day.
The five things are who youhire clear expectations.
Three is incentive alignment,which is like are you developing
your colleagues, are youhelping people learn and grow?
That kind of thing right, soyou have to reward people for it
.
Training give folks training sothey can know how to do
whatever the key elements ofyour culture are.
(09:17):
And then the last one I don'teven get named for I call it
like structures, but just theidea of like who's meeting when.
What's the org chart?
Look like it's also who youfire.
When we have fired people whoweren't living our values,
although it's a sad day andwe're like oh man, you know, I
wish we could have, you know,helped that person not be such a
culture destroyer.
(09:37):
But when we've done that overthe years, the very next day
everybody sighs a big sigh ofrelief and you go.
That was an important thingthat's a very important part of
building and sustaining yourculture is taking out folks who
are actively toxic in thatculture.
So I got seven things thatmatter leaders who really worked
on being decisive, like makemore decisions, not less.
(10:01):
Make faster decisions, notslower.
Working on being a decisivedecision maker massively
correlated with success as abusiness builder.
So that was one.
Two is A adaptability.
So don't fall into the trapwhere you're just like well,
that's what I always did.
Meanwhile market conditionshave changed or product
conditions have changed.
Like being able to face realityand then adapt.
That's what I always did.
You know, meanwhile marketconditions have changed or
product conditions have changed.
Like being able to face realityand then adapt.
(10:23):
That's the second thing.
Third is reliability.
If you say you're going to dosomething, like do it, we're
huge in GH, smart on, we startmeetings weirdly on time, we end
them on time.
If we say we're going to dosomething two years from now,
like we do it, like we're very,very reliable and it creates
trust, it creates just a reallyhigh competence culture if
(10:44):
you're super reliable.
So that's the third one.
The fourth one is E engaging forimpact.
So it's not good enough just tohave the right answer.
As a leader, having the rightanswer, oh congrats.
Great, you have the rightanswer.
You need to persuade otherpeople and influence and listen,
and basically it's likepersuasive communication was the
fourth thing that matters, andit's this learned skill.
(11:06):
I mean you can learn how to bea more persuasive communicator.
So that's, those are the fourthat came out of that study.
Setting the right goals, not toomany goals, but just a small
number of the right goals.
I think that's basically thespirit of what good
prioritization looks like as anentrepreneur.
That's the P.
The W is who's on your team.
So back to the hiring andfiring thing learn it.
(11:28):
You can learn it.
Read our books, like listen tothis podcast, like learning how
to be good at hiring and firing,to build talented teams super
important skill to develop.
And then R is relationships.
It's like how do you buildrelationships that are focused
(12:03):
on achieving shared goalstogether?
Of them, cite having goodmentors as, like one of the most
important things.
Mentors were super important tome.
Mentors are super important topeople who build amazing things
quickly.
Yet I don't see even my ownkids to the degree I think they
should.
I don't see young peopleproactively searching out
(12:25):
mentors and kind of collectingmentors.
I'd say that'd be like the lastcareer strategy.
Advice is it's free, it's notthat scary.
Dm people on LinkedIn Getreferred to so-and-so M.
People on LinkedIn find out, getreferred to so-and-so Freaking.
Steve Jobs called up thefounder of Hewlett Packard, of
HP, to get computer parts thathe could like build something
(12:47):
when he was 12.
Like, weirdly, people out therewho get like a step function of
success and you're like how dothey do that?
They all have mentors givingthem advice or intros or
computer components, as it turnsout.
So I'd say, if you're young andyou're listening to Ann's
podcast, just think about whatdo you want to learn or what are
some jobs or industries ortypes of roles that really sound
(13:10):
interesting to you?
Who do you know?
And maybe you don't knowanybody.
But like, use the network youhave to get to folks or just go
ahead and blind DM people onLinkedIn, call them up, email
them.
You can figure out this stuffand try to recruit.
I'd say, by the time you're 20,to have like five really good
mentors who are very successfulpeople in the field you wanna be
(13:30):
successful in is unbelievablypositive return on investment of
your time.
Speaker 1 (13:40):
I'd love to hear your
thoughts.
Do you like and appreciate thehighlights version, or should I
stick to full length episodes?
Your feedback will help medecide if this format is a
keeper.
Thanks for being flexible as Itry this out.
Have a great day.