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The Three Most Important Things When Hiring

Wednesday, May 24th, 2017

https://www.flickr.com/photos/mauropm/3436674445/

I’ve worked with and spoken to thousands of hiring managers over the course of my career.

They all want to hire the best people available and will go to great lengths to do it.

Sure, some work harder at hiring than others, but they all want a hire that succeeds.

Some look hardest at skills.

Some at accomplishments.

But the most successful managers focus on three character traits, before anything else.

Attitude, aptitude and initiative.

Attitude: Skills can grow and tech can be learned, but energy expended on changing someone’s attitude has the lowest ROI.

Aptitude: Things change. Not just tech, but rules, bosses, buildings, colleagues, and anything else you can think of; an aptitude for change can mean the difference between success and frustration.

Initiative: Going beyond the job description; doing more than expected; not for a reward or the glory, but because that’s who you are.

That’s how you build an organization that succeeds and makes you look great.

Attitude. Aptitude. Initiative.

Image credit: Mauro Parra-Miranda

Golden Oldies: Pay For Performance

Monday, April 17th, 2017

It’s amazing to me, but looking back over more than a decade of writing I find posts that still impress, with information that is as useful now as when it was written.

Golden Oldies are a collection of what I consider some of the best posts during that time.

Money. Everyone’s favorite subject that no one wants to talk about. Especially when it comes to work, as in, “what were you making previously” and “what are you looking for now?”  

Tomorrow’s post focuses on a new law enacted in Philadelphia and New York City that has the potential to change that entire, unwanted conversation, forcing managers/companies to focus on the future, as opposed to history.

Read other Golden Oldies here.

starIn a post last week I asked for opinions on the ideas presented in a series of articles in Business Week on managing smarter but especially one that claims that “treating top performers the same as weaker ones is ‘strategic suicide’” and said I would add my thoughts in a future post.

Bob Foster left two interesting comments (well worth your time to click over and read). Regarding pay for performance he tells the story of a company where everybody from the CEO down all quit.

“Taking on the task to salvage the company, I hired new people that met unusual qualifications: they had to be qualified for the job they were applying for; they had to be unemployed and available immediately; they had to work at sub-standard wages; they had to work while knowing the company could close at any minute; and they had to work without supervision. The team that came together produced a highly successful company, and it was not because of high pay, or performance bonuses (there were none). The team stayed together, and performed, because of mutual respect, trust, appreciation, and consideration—people were ‘valued.’ To me, this is the truest form of ‘pay for performance.’”

I agree that trust was one of the key ingredients in what Bob accomplished, but it wasn’t the only one—or maybe I should say that it needs to be based on fairness and honesty.

Bob says the pay was ‘sub-standard’, but I assume that it was universally sub-standard relative to position and experience. If he had chosen to pay part of the team, say 10% more than their peers, the team wouldn’t have coalesced.

And that is exactly why I disagree with the idea of paying top performers, AKA stars, big sign-on bonuses or higher salaries than their peers.

  • Based on my own experience, 98% of star performers become stars as a function of their management and the ecosystem in which they perform. Change the management, culture or any other parts that comprise that ecosystem and the star may not survive.
  • Just as a chain is as strong as its weakest link there is no star in any sport, business, media, etc., who can win with a team that is subject to constant turnover and low morale.

Consider this common example.

Two people are hired at the same time with the same background, same GP0 and similar work experience, but with the one exception. One graduated from a ‘name’ school and the other from a community college. Starting salary is $50K, but the manager adds a 20% premium to the first candidate’s offer on the basis that she must be better to have gone to that school.

Neither candidate lived up to their potential because the manager made poor choices. In doing so he set both up to fail but for different reasons; one thought she had it made and the other that he was low value.

Merit bonuses fairly given for effort above and beyond acceptable performance levels make sense as long as they don’t come at the cost of developing new talent.

But one problem with ‘pay for performance’ is the pay often comes before the performance, but there are others and I’ll discuss them more Thursday. In the meantime, here are links to five posts from 2006 that give more detail on the trouble with stars.

Stars—they’re in your MAP

More about stars and MAP

Rejects or stars?

Star compensation

Retaining Stars

Image credit: sxc.hu

There were several interesting comments on the original post; check them out.

If The Shoe Fits: Growth At All Costs — Unsustainable AND Unethical

Friday, March 24th, 2017

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

This is a short post, aside from the quotes, and I honestly don’t care if you skip my part and just read the  main links, especially the last on from DHH.

5726760809_bf0bf0f558_mIt’s exactly two years since I saw a successful lifestyle business founder, Andrew Wilkinson of MetaLab and Flow, loudly and publicly say that he would rather be a horse than a unicorn.

Meaning, he would rather build his businesses organically and self-funded than take outside investment.

I wondered if his attitude was a harbinger of returning sanity.

Ha! Wilkinson’s attitude was an outlier, as opposed to a trend.

However, early as he was I see more successful founders following a similar path.

A few days ago I read a Medium post from Mara Zepeda, Co-founder and CEO of Switchboard, and Jennifer Brandel Co-founder and CEO of Hearken, coining a new term, zebra, to denote a sustainable approach to growth.

A year ago we wrote “Sex & Startups.” The premise was this: The current technology and venture capital structure is broken. It rewards quantity over quality, consumption over creation, quick exits over sustainable growth, and shareholder profit over shared prosperity. It chases after “unicorn” companies bent on “disruption” rather than supporting businesses that repair, cultivate, and connect. After publishing the essay, we heard from hundreds of founders, investors, and advocates who agreed: “We cannot win at this game.”

Adam Eskin, founder and CEO of expanding restaurant chain Dig Inn and a former private equity associate at Wexford Capital puts it this way,

“Having a background in private equity, we don’t just want to grow this business for growth’s sake, lose passion for what we do, or the reasons why we’re here. I think that’s what some folks can end up doing when they raise this kind of capital.”

As a tech person, who has been seduced into believing that valuation is everything, why should you listen to an outlier or non-tech founder, let alone a couple of women?

Perhaps you’ll be more inclined to listening to the guy whose tech generates raves and may even be the source code of your company.

DHH (David Heinemeier Hansson), creator of Ruby on Rails, Founder & CTO at Basecamp (formerly 37signals), writer of best-selling books and winning LeMans racecar driver.

There is no higher God in Silicon Valley than growth. No sacrifice too big for its craving altar. As long as you keep your curve exponential, all your sins will be forgotten at the exit. (…)  The solution isn’t simple, but we’re in dire need of a strong counter culture, some mass infusion of the 1960s spirit. To offer realistic, ethical alternatives to the exponential growth logic. Ones that’ll benefit not just a gilded few, but all of us. The future literally depends on it.

Image credit: HikingArtist

 

Ducks in a Row: How Good Is Your Face-To-Face?

Tuesday, March 21st, 2017

https://www.flickr.com/photos/44412176@N05/4197328040/

Why is it that the most difficult part of management, i.e., people management, constantly moves backwards?

Managers from the Greatest Generation tried to manage by memo.

That lasted until the 1970s when Boomer and Gen X managers took a giant step backwards and started trying to manage by email.

Millennials have taken an even larger step in that direction by trying to manage by text and have swept many of the previous contingents along with them.

Granted, people at all levels often look for and find ways, frequently turning to available technology, to avoid, or at least minimize, the most frustrating and difficult parts of their jobs.

However, that doesn’t work when the frustrating part is 90% of the job.

Every time this comes up I find myself quoting something Terry Dial said to me decades ago.

“People are 90% of our costs as well as the key to customer service and satisfaction. The only thing that should take priority over hiring a new employee is keeping a current one.”

Wally Bock puts it this way (and offers excellent advice on how to do it.)

In the Marines, I learned that when you’re responsible for a group, you have two jobs. One of them is to accomplish the mission. The other is to take care of the people.

I personally guarantee that you won’t accomplish the former if you ignore the latter.

You cannot “care for your people” by email or text — it requires face time.

It requires one-on-one conversations — wherever they take place — and not just about performance.

Conversations need to be human, that means family, hobbies, food, sports, etc.

Face-to-face humanizing contact is critical for teams, too, whether they are in a different office around the block or around the globe.

As Valerie Berset-Price, founder of Professional Passport says,

“Building trust is a multisensory experience,” she says. “Only when people are physically present together can they use all of their senses” to establish that needed trust. Without a bond, conflict or disengagement can more easily arise and is more difficult to resolve.

So whether you consider yourself a manager, a leader, a boss, or just a plain working stiff honing your in-person communication skills will not only improve your career opportunities, but also all parts of your life.

PS I just saw this article on IBM’s move to have teams in-person face-to-face.

Image credit: gorfor

Ryan’s Journal: Can You Right A Sinking Ship?

Thursday, February 16th, 2017

https://www.flickr.com/photos/bertknot/8210386029/I read an article today about Warren Buffet. His company, Berkshire Hathaway, recently sold over $900 Million in Wal-Mart stock. Why you may ask?

Buffet believes the retailer is a sinking ship and retail as a whole is being completely disrupted. Now by all accounts Wal-Mart is still hugely successful. They sell more than Amazon, are profitable and growing.

Looking at these factors alone it would seem that there is nothing to be worried about, however a man much smarter than myself thinks otherwise. How can that be changed?

Now, this post is not about Wal-Mart per say but more on the retail experience as a whole. I can look throughout my house right now and say that a large majority of what I have purchased in the past few years has been from online.

I have twin girls and my family may singlehandedly keep Amazon in business by all the items we need on a day to day basis.

Recently Wal-Mart began a service in my area where you can pick out all of your groceries online and pay, then you just drive to your location and they load your car with the groceries. You never go in the store and you have everything you need at a great price!

I can tell you that the service would be extremely helpful to my family but I have never once considered it.

Why? Culture.

I am not a snob, in fact I prefer a good burger over whatever hot dish is on trend right now, however I have a hard time considering Wal-Mart or other similar retailers for most of my purchases.

The main reason, for me, is the culture of those locations.

I feel that retail employees are paid too low and not given opportunities for advancement. Is this true? Sometimes, but also it’s a perception thing. The culture would appear to be one of hardship.

On the other hand Amazon has commercials for drone delivery and cutting edge technology. Is the apple I get from Amazon any different than the one from Wal-Mart? Not one bit, but my perception is. I feel pleased that my money is being well spent with one while depriving from the other. 

Is retail a sinking ship? Maybe, but quite frankly I do not have enough information to support such an argument. However I can tell you that my emotions are directly connected to my perception of the culture at each company and that is what determines where my dollars go.

Culture is deeds, words and actions. It is the sprit that inhabits a person and an organization. It must be jealously guarded as it could quite possibly be the most valuable thing owned.

My personality is my culture.

The company I work for is an aggregate of all combined to make up a unifying culture.

Do I have an answer on how to fix the ship? I would think it starts with the leaders and then moves down. Perhaps it can also start with the individual? 

What fuels that person? What helps them determine right from wrong? Is there a right or wrong?

These are all questions that will determine an individual’s identity and ultimately help them determine their course in life.

Maybe it is time to right our own ship?

Image credit: bertknot

John Wooden On Stars

Wednesday, February 15th, 2017

https://en.wikiquote.org/wiki/John_Wooden

In spite of being severely overloaded, KG still finds time to send me stuff he finds interesting and/or inspirational.

Over the years, we’ve had many discussions about culture and its importance in hiring.

He recently mentioned a quote from basketball player and Coach John Wooden.

“The main ingredient of stardom is the rest of the team.”

KG: In any high performing organization, there are lots of systems and processes that make the organization successful.

When you look at people considered stars, they are almost never part of second or third rate teams; they are almost always in organizations performing at the highest levels.

This doesn’t mean that there aren’t truly high performing people in lesser teams, it’s just that they are not defined as stars in general (sometimes they may be local stars, but generally don’t get the full recognition).

So a star, per definition, is a member of an organization that performs at the top.

Me: So true. I’d add that in most cases people become stars as a result of the culture and their manager, or so I’ve found.

KG: Exactly. Look at all the people who leave Goldman Sachs or Google who were stars there (e.g. Marissa Meyer) but are unable to maintain their level of performance outside the culture & systems of that environment.

That’s why it’s always dangerous to hire stars — more than anything else they are a product of their environment.

Me: Absolutely, and the poster child is GE’s Bob Nardelli!

(Click for more Wooden wisdom. For more information about stars and Nardelli use use the tags below.)

Image credit: Wikipedia

Ducks In A Row: Pros And Cons Of Omada Health

Tuesday, February 14th, 2017

http://vator.tv/news/2014-04-09-omada-health-raises-23m-for-chronic-disease-prevention

Companies are becoming more and more involved in their employees personal lives, especially health-wise.

That’s understandable, considering how fast costs keep rising.

Startup Omada is a good example of what’s new.

The company’s business model is unique, as it doesn’t just charge employers per customer, but it actually depends on the success of each individual to make money. Omada’s revenue is outcome based.

This means that client companies pay only when there are positive results and that’s a good thing.

Accomplishing it, however, can feel invasive.

Its flagship program, Prevent, is modeled around the National Institutes of Health study called the Diabetes Prevention Program and is designed to help participants modify their behavior and reduce their risk of Type 2 diabetes.

The client company contracts with third-party organizations to identify those most at risk for at risk of diabetes or heart disease and enrolls them for intensive personal counseling.

The digital scale that each user gets, which is connected wirelessly to their Omada account, does daily weigh-ins to track their weight loss, as that is a good indicator of blood sugar and the risk of diabetes. Omada then gets paid based on the percentage weight loss that user has seen.

However, weight is not always an accurate indicator. Based on my lifetime weight I should be diabetic, have high blood pressure and likely a heart condition.

But I don’t.

In fact, I am amazingly healthy, always have been, and require no medication, whereas 85% of people my age are taking at least one prescription drug.

While Omada’s process would work for many people it feels invasive to me and if I were an employee I’d want to opt out of it.

So the real question here is not the value of the program offered, but whether the employer forces people to do it and penalizes them if they refuse.

Image credit: Vator TV

Golden Oldies: Bullies And Performance

Monday, February 6th, 2017

https://twitter.com/goldenoldiesbnnIt’s amazing to me, but looking back over more than a decade of writing I find posts that still impress, with information that is as useful now as when it was written.

Golden Oldies is a collection of what I consider some of the best posts during that time.

I hate bullies. The biggest changes in the decade since I wrote this post are that there are more bullies, many using the anonymity of the internet to morph into trolls, more hand-wringing, that accomplishes nothing, and a rising tide less willing to be bullied that responds loudly and displays its disgust actively with its wit and its feet. Hopefully that tide will turn into a tsunami.

Read other Golden Oldies here.

Does your newspaper carry The Born Loser by Chip Sansom? Actually, I don’t find Brutus, the main character, to be a loser—just a slightly naive guy who works for an arrogant bully who constantly belittles him.

In the July 26 panel the dialog is as follows:

Boss: I am looking for a unique spin to put on our new ad campaign—do you have any ideas?

Brutus: Gee, Chief, I’m not sure—are there any ideas you think I should think of?

Boss: Brutus Thornapple, master of thinking inside the box.

It reminded me of managers I’ve known, who, no matter what happened or what feedback they received, never could understand that it was their MAP and their actions, not their people’s, that was the root cause of their under-performing groups.

After all, if you

  • ask for input and ridicule those who offer it, why be surprised when you stop receiving input;
  • claim that you want to solve problems while they’re still molehills, yet kill the messengers who bring the news, you should expect to grapple with mountainous problems requiring substantially more resources;
  • tell people their ideas are stupid, whether directly or circumspectly, or, worse, that they are for thinking of them, why should they offer themselves up for another smack with the verbal two-by-four?

So, before you start ranting or whining about your group’s lack of initiative and innovation, try really listening to yourself and the feedback you get and then look in the mirror—chances are the real culprit will be looking straight back at you.

Role Model: Craig Zoberis and Fusion OEM

Wednesday, January 25th, 2017

http://www.fusionoem.com/

In 1914 Henry Ford doubled his workers’ daily wage, much to the consternation of other magnates, who believed, as do most of them today, that success comes from paying as little as possible.

Ford, however, believed that he would benefit if his workers had disposable income and he was correct; they used the extra money to buy Fords.

The same holds true today; modern research has proved that higher wages increase profits.

Businesses, from very large to very small, still don’t believe it and scream at the thought of a so-called living wage.

But not all of them.

Fusion OEM at just $12 million is considered very small, but it’s profitable and founder Craig Zoberis is very happy, because he is meeting his twin goals.

While lots of other manufacturers have moved operations to China or Mexico, Zoberis has kept his plant in the United States – and considers it a point of pride to pay his 55 workers above-market rates. Workers with no experience start at $14-an-hour, he says, and by completing training and gaining skills can reach $18-to-20-an-hour, plus overtime and bonuses, for total pay near $50,000 a year, within a few years.

Zoberis doesn’t expect his people to buy his products, but he did want to have a  place to work that matched his MAP and not his father’s.

My father and his partner never did a good job of hiring the right people with the right attitude. I wanted to be excited to go to work every day, and working for my father’s company, I was not.

Fusion OEM has never had a layoff, but finding great workers in its industry is just as difficult as finding great programmers, hence the need for a creative, long-term solution.

My colleagues were always complaining that there aren’t enough skilled workers who have the right attitude. When I talk about skilled workers I’m talking about machinists (…) What we discovered halfway through our life at Fusion is that we couldn’t always look outside for skilled people. We decided to hire for attitude and train for aptitude.

Fusion OEM is enjoying double digit growth, but Zoberis isn’t interested in taking outside investment. He loves going to work, saying, “This is my hobby, my income, my life,” and knows that hyper growth can kill you.

You can’t grow your company any faster than you can get the right people. If it goes too far, you might go beyond your capabilities and you’ll fail.

The interview is well worth reading, especially their approach to hiring and compensation.

I rarely make predictions, but in this case I feel pretty safe making two.

  1. Zoberis will continue building his company, growing his own people and being a management outlier.
  2. Most companies of whatever size will continue to treat people as disposable, pay them as little as possible and bitch about them to whomever will listen.

Image credit: Fusion OEM

Where To Work

Tuesday, January 24th, 2017

https://www.flickr.com/photos/jeepersmedia/9698637692/

There’s a very stupid myth that only the very talented are hired by startups and that the very talented only want to work for startups.

The corollary being that those who work for public companies, let alone large ones, probably aren’t all that talented and certainly not innovative/creative.

What a crock.

Another part of that myth is that working for a startup is the road to riches.

An even bigger crock.

The myth also says that the best place to work is a unicorn, such as or AirBnB, GitHub or Palantir,

And that is the biggest crock of all.

If you are looking for new opportunities and are dazzled by the idea of working at a unicorn I strongly suggest you read Scott Belsky’s post on Medium.

A company’s fate is ultimately determined by its people, so talent is everything. But this old adage bumps up against another one: cash is king (or runway is king, for a fast-growing private company). Without runway, talent takes off. So, it is no surprise that bold moves to extend runway (think late-stage financings at technically large valuations with some tricky liquidation preferences underneath) are done even if they could hurt the company (and its people) in the long run. This is especially true when these financings are ego-driven rather than strategic. The problem is, the employees at these companies don’t understand the implications.

But whether startup or Unicorn, this anonymous post on GitHub is a must read.

This is a short write-up on things that I wish I’d known and considered before joining a private company (aka startup, aka unicorn in some cases). I’m not trying to make the case that you should never join a private company, but the power imbalance between founder and employee is extreme, and that potential candidates would do well to consider alternatives.

The right place for you to work is the one that satisfies what you want — whether that’s the opportunity to work on bleeding edge technology, build a network, upgrade your resume or even plain, old curiosity.

The wrong place is the one you join with an eye to getting rich quick or for bragging rights.

Image credit: Mike Mozart

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