A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here

A few days ago Fred Wilson wrote about the importance of culture and fit.

Some entrepreneurs and CEOs buy into “hire the best talent available” mantra. That can work if everything goes swimmingly well. But as I said, it often does not, and then that approach is fraught with problems. The other approach is hire for culture and fit. That is the approach I advocate.

That’s the same approach I’ve advocated for decades.

What many forget is that “the best talent available” refers to whoever will perform best in your culture as part of your team and focus on your company’s success.

Too many founders, CEOs, other execs and even lower level managers seem to hire for bragging rights instead.

I wrote about hiring and culture here last Sept and included a link to an article I wrote for MSDN way back in 1999 that explained how to use your culture as a screening tool when hiring.

I’ve always told clients that the fastest way to success is to always hire the right person at the right time and for the right reasons.

Good hiring is like cooking Chinese—80% of the time used is spent prepping and the balance doing.

There really are no shortcuts; especially not hiring other people’s stars.

Not to sound self-serving, but I’ve been surprised at how closely the ideas I’ve always believed in parallel Wilson’s thoughts.

Even Option Sanity™ parallels his ideas on allocating equity.

Option Sanity™ is culture in action.

Come visit Option Sanity for an easy-to-understand, simple-to-implement stock allocation system.  It’s so easy a CEO can do it.

Warning.
Do not attempt to use Option Sanity™ without a strong commitment to business planning, financial controls, honesty, ethics, and “doing the right thing.”
Use only as directed.
Users of Option Sanity may experience sudden increases in team cohesion and worker satisfaction. In cases where team productivity, retention and company success is greater than typical, expect media interest and invitations as keynote speaker.

Flickr image credit: HikingArtist

Guilt is a positive force or at least it can be as long as it is the right kind.

First, some background.

When people mess up they have one of two reactions, guilt or shame.

What is important to understand is that they neither the same nor is one the flip side of the other.

Whereas someone who feels guilty feels bad about a specific mistake and wants to make amends, a person who’s ashamed of a mistake feels bad about himself or herself and shrinks away from the error.

In other words, guilt embraces and focuses on fixing whatever, whereas shame runs away and hides.

This is important to you because in both controlled experiments and real-world feedback the guilt prone tend to have more initiative, AKA leadership.

In all the groups tested, the people who were most likely to be judged by others as the group’s leaders tended to be the same ones who had scored highest in guilt proneness. Not only that, but guilt proneness predicted emerging leadership even more than did extraversion,

As a manager, no matter your level, it is important to remember that everybody makes mistakes, causes errors or just plain screws up.

When interviewing, learning about mistakes, errors and screw-ups along with reactions and subsequent actions is often more important than knowing what candidates did correctly or their greatest strengths.

Initiative is one of the most valuable components of MAP and it’s difficult to evaluate when interviewing; after all, candidates are unlikely to say they don’t have any.

And that is why smart mangers hire MAP, not skills.

Flickr image credit: Murray Barnes

The controversy over Yahoo CEO Scott Thompson’s education as described by Rocky Agrawal in Venture Beat made me laugh. (For those interested, the reason for the firing demand says a lot more about the lengths an investor will go to get what he wants than about Thompson.)

The good thing is that things are changing. Even mighty Google that once hired only 3.7+ GPAs has changed how they recruit using puzzles to identify talent that might fall through the cracks—assuming it even got that far.

Probably the greatest value of higher education—all education, actually—is learning how to learn.

It’s knowing where to find information and how to assimilate, tweak and synthesize it

so it becomes useful in both the short and long terms; more value comes from learning how to focus and think critically.

Skill in the actual major has value for two to four years—less in technical fields that change with radical speed.

From that point on the value of actual degree content goes down 20% or more each year, whereas real experience goes up.

That means in five years specific degrees become meaningless, while specific experience holds all the value.

Moreover, those with the ability to successfully move from industry to industry, field to field, department to department, position to position sans ego and hype truly have a price above rubies—although they rarely think so.

stock.xchng image credit: GlennPeb

A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here

Who do you want to hire?

The person who passionately wants to work for a startup or the person who passionately wants to work for your startup?

Think about it.

Who will contribute more?

• The person who always wanted to work in a startup; whose passion is engaged by the mere thought of working in the startup environment; or
• the person who craves the solution your startup proposes even if she never recognized the problem; whose passion is engaged specifically by the idea of contributing to that particular solution no matter where it is done.

Some experts will tell you that it is the drive to work in a startup—any startup—that is most important.

I disagree.

Just as the person who joins a company for money will leave for more money the person who joins because it’s a startup will leave for a sexier startup.

But the person who joins because of a deep, driving passion to be part of that specific solution will stay and fight the good fight long past the time that Hell freezes over.

Option Sanity™ engages the deeply driven.

Come visit Option Sanity for an easy-to-understand, simple-to-implement stock allocation system.  It’s so easy a CEO can do it.

Warning
Do not attempt to use Option Sanity™ without a strong commitment to business planning, financial controls, honesty, ethics, and “doing the right thing.”
Use only as directed.
Users of Option Sanity may experience sudden increases in team cohesion and worker satisfaction. In cases where team productivity, retention and company success is greater than typical, expect media interest and invitations as keynote speaker.

Flickr image credit: HikingArtist

I ended Tuesday’s post about micro cultures by saying, “That’s why cultural fit or, at the very least, cultural synergy, is the most important trait to look for when hiring at every level.”

The result was several phone calls and a few emails asking for specifics. I’ve offered specifics multiple times over the years, so just click the links for the answers.

• How to check cultural fit; and
• how to avoid bad hires and wrong hires.

But when all is said and done, the hardest part of good hiring is walking away from candidates with the right skills and the wrong attitude.

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Flickr image credit: Ashish

A study by Bain & Company, published in 2001, showed that acquiring a new customer can cost six to seven times more than retaining an existing customer, and that increasing customer retention rates by 5% boosts profits by 25% to 95%.

Why is it that so many managers ignore the connection between happy employees and happy customers?

Why do they insist on putting the cart before the horse and only invest in their people after revenues increase?

In yet another study researchers again found that customer retention is a function of great customer service, in other words, happy employees result in more loyal customers who spend more.

Zappos may be the poster child of the happy workforce, but there are many ways of achieving the same happy results.

2006, American Express, the credit card issuer, started an internal program that involved training and incentivizing its staff to get customers more engaged. The company transformed its traditional service call by getting rid of scripts and taking customer service representatives off the clock — which allowed the representative to decide how long he or she wanted to spend on each call. It also changed its employee compensation structure, directly linking a big portion of incentive pay to customer feedback. The result: Customers increased their spending on Amex products by 8% to 10% and overall service margins widened, according to a case study by Joseph Handelman, a professor at Ross. In the most recent quarter, the company announced that card members spent a record amount on their Amex cards; total revenue was $7.74 billion, up 5% from a year ago.

Underlying Amex’s actions was recognition of the intelligence of their customer service workforce and a decision to trust their people to treat their customers well and the payoff for doing so was substantial.

Lack of trust in employees is the elephant in managerial corridors and while it sometimes stems from a manager’s own insecurity it’s more often the result of poor hiring.

Managers claim that careful hiring is time-consuming and takes too long, but that’s a cop-out to short-term thinking, as is gutting customer service when the economy slows.

“When sales and profits are down, customer service is easy to cut. It [poor customer service] doesn’t show up right away. Where it shows up is in long-term customer profitability.” –Ronald Hess, professor of marketing at William & Mary School of Business, who studies customer satisfaction and loyalty.

And while you can’t control the economy, you can focus on eliminating the elephant within your own organization.

Flickr image credit: Phillip Martyn

A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here

A few weeks ago I had lunch with a potential client to get a feel for his MAP, i.e., management style, cultural vision and underlying beliefs, etc., while “Tony” got to know mine.

Afterwards I told him I didn’t believe we could form a productive relationship, wished him luck with his startup and we went our separate ways.

Yesterday I received an email from him regarding a senior level executive he was anxious to hire.

Tony said that the interviews seemed to go well, but when he made the offer it was turned down.

When he asked why the candidate responded in writing, below is the relevant paragraph.

The company culture can be moderately formal to moderately informal.  I care most about professionalism and mutual respect. I do not tolerate a highly politically charged environment where I must spend a lot of time calculating what the impact of a recommendation or observation will have on alliances, potential career tracks and other selfish-focused issues for the people around me.  I must be in a place where we are solidly aligned towards a clear set of goals, and those goals are not about personal advancement per-se, they are about people exceeding their own goals in pursuit of the company’s goals (which may shift with market conditions).  I need to be in situations where there are bright, optimistic people, who are open to new ideas.  There needs to be an environment and culture of accountability, and at the same time, one of try-fast, fail-fast, try again.  I need to surround myself with people who are good at not “this is not possible” but rather “this is what needs to happen for this to be possible.”

Tony said he didn’t see anything in the email to account for the turndown and asked if I had any suggestions on what he could do to land the guy.

I’ve only been speechless a few times in my life and this was definitely one of them.

Option Sanity™ reflects culture.

Come visit Option Sanity for an easy-to-understand, simple-to-implement stock process.  It’s so easy a CEO can do it.

Warning.

Do not attempt to use Option Sanity™ without a strong commitment to business planning, financial controls, honesty, ethics, and “doing the right thing.”
Use only as directed.
Users of Option Sanity may experience sudden increases in team cohesion and worker satisfaction. In cases where team productivity, retention and company success is greater than typical, expect media interest and invitations as keynote speaker.

Flickr image credit: HikingArtist

That’s right; multiple offers are worthless,.

It only takes one right offer.

Career experts and anybody with more than one job under their belt who can make the mental leap between cause and effect will tell you that culture is the number one reason to join a company, not to mention the number one indicator of how well a person will do.

Perhaps that’s starting to sink in to college dwellers, even those in the rarefied ultra-competitive Ivy atmosphere.

Yalies are a particularly competitive bunch, and nothing delights us more than an acceptance letter (though an open carrel at Bass is a close second). For us, life is a parade of applications, and acceptance is an indicator of self-worth.

During all the years I worked as a recruiter and since in this blog, I’ve spent a lot of effort to help people understand that getting multiple offers should not be their goal, whereas getting the right offer should be.

(In fact, interviewing everywhere just to get offers for the ego-boost can brand you as a shopper; no manager likes wasting time interviewing a candidate whose reputation/history says “shopper” and that reputation got around long before social media existed).

Being in the wrong culture is like being a duck out of water.

Most people aren’t looking for a job they are looking for a home.

They are looking for an environment in which they fit and feel challenged, appreciated and safe.

Isn’t that what you wanted growing up?

Then why is it considered strange that you would crave the same thing in the place in which you spend more than half your waking hours as an adult?

But even when you find the right culture and a job you love it’s worth noting that basing your self-worth on the success of your company is exceedingly dangerous.

Flickr image credit: David Blaikie

A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here

Bosses hiring for startups (or existing companies) wax lyrical on the benefits of hiring “stars” and are willing to jump through almost any hoop to get one.

Those of you who crave stars would do well to read the story of Jeremy Lin, who plays for the NY Knicks in the NBA.

Nobody considered Lin a star or even a potential star.

He was cut in December by the Golden State Warriors, his hometown team, after one season in which he rarely left the bench. The Warriors were intrigued enough to sign him but not enough to keep him. The Houston Rockets gave Lin a quick look and cut him.

Of course, his coaches didn’t play him, so they never learned what he could do.

The Knicks almost made the same mistake.

Lin started with two strikes against him; he is Chinese-American and graduated from Harvard—he doesn’t fit “the profile.”

In spite of superb high school playing he received no scholarship offers.

Similar scenarios play out every day in hiring decisions across industries and around the country.

In doing so managers walk by some of the best talent available.

How many Jeremy Lins have you missed?

How many of them now work for your competition?

Option Sanity™ recognizes stars-to-be

Come visit Option Sanity for an easy-to-understand, simple-to-implement stock allocation process.  So easy a CEO can do it.

Warning.

Do not attempt to use Option Sanity™ without a strong commitment to business planning, financial controls, honesty, ethics, and “doing the right thing.”
Use only as directed.
Users of Option Sanity may experience sudden increases in team cohesion and worker satisfaction. In cases where team productivity, retention and company success is greater than typical, expect media interest and invitations as keynote speaker.

Flickr image credit: HikingArtist

Northern California startup land is once again the Golden State for new grads—especially those with a strong sense of entitlement.

And I do mean golden.

Lattice Engines, a small San Mateo startup, where she makes “near the top” of the company’s $80,000 to $130,000 range for an entry level product manager, plus equity.

Notice that the young woman is not a techie, so her salary isn’t pay for (supposedly) hard to find programming skills.

Granted I’m no longer in the front lines of hiring, but I’m still going to stick my neck out and say that no new grad is worth that kind of money—not even programmers.

Why?

Because there is so much more to working than what was learned in class. Stuff like

• you may not know as much as you think, let alone everything;
• experience matters;
• understanding that while screwing up your own work is bad it can wreck the project and damage not just your team, but even the company;
• not only being present, but also productive five days a week, 12 months a year;
• being engaged every day all day—no cramming just before evaluations;
• no spring or winter break or summer vacation (it’s a different rhythm); and
• many other mundane things

In other words, it’s a different world, with different rules and different measures.

Further, new research is showing that entitlement kills innovation and for a new grad to believe they are worth a six figure salary plus equity compensation package is definitely entitlement.

I’m not saying that they aren’t assets or that they won’t contribute significantly, just that it wouldn’t hurt if they proved themselves first.

Can you imagine the impact on their productivity and creativity if their annual raise is meager, let alone justifying that salary if they change jobs?

There is a world of difference in the skills of someone with one year of experience, let alone five or more.

The problem is that by the time that truth is learned they are no longer entry level.

Flickr image credit: Jeff Wilcox