Cost of Hiring New Employees

It is not often that I hear my business coaching clients use “hiring new employees” and “strategy” in the same sentence. In fact, before hiring me and beyond the typical tactical issues with employees, it was rare for human resources issues to be considered during strategic planning meetings. I recently met with one of my clients regarding challenges they encountered in recruiting sales personnel, and it became obvious that their tactical issues were really related to their strategic model for hiring employees. Worse even than their tactical issues was the fact that it was costing them a huge amount of money to hire new staff members.

Commonly Overlooked Costs Associated With Hiring New Employees

Before discussing the strategic issues of my Florida coaching client and how we wrestled them to the table, I want to clarify what I mean by the “cost of hiring new employees”. Here are some costs you probably do not measure, and they are the big ones:

1. Hiring Success Rate

The lower your hiring success, the more people you have to hire to get a full set of performers. For example, if you need to add 10 people, but your hiring success rate is only 25%, you will ultimately have hired 31 people before you have the 10 people that will perform at your required performance levels.

2. Hiring & Performance Standards

Most companies are lowering their performance standards rather than raising their hiring standards. They get frustrated by their inability to recruit the right people and take whatever they find available. The lower performance requirements result in excess employees, lower customer service, more mistakes, lost opportunities, and lost customers.

3. Leadership Time

Leadership has to divert significant time to interview extra people, manage superfluous people, and address the performance-related issues of substandard employees. This brings far less value to the company than the leadership activities they would perform otherwise.
Unfortunately, there is no separate income statement line item for the above. In every company I have visited, the financial statement impact is huge when we start trying to quantify the above numbers. This is what I am referring to when I am concerned about the cost of hiring new employees:

How Business Strategy Impacts the Hiring Process

As I was working with one of my customers in Miami, they were explaining to me that 2,000 candidates had applied for 10 open sales positions over a 6-month period. They ended up being very disappointed with their results. Very few candidates were qualified. They had tried hiring a few new employees, several of whom never showed up for the first day, and, of the ones that did show up, they were not pleased.
They were looking at all the time that was passing and how much money the employee hiring process was costing them. They were losing money on sales that were not generated by having an open position, sales that were not generated by people that could not perform, and the cost of management time applied for recruiting. After reviewing their situation, we realized the situation was a strategy issue.

Considering All Factors in the Employee Recruitment Process

When developing a strategy, you need to consider the people decisions related to that strategy. In every company, there are several key positions that must be filled quickly in order to grow your business. In my client’s case the need was for additional salespeople. If your business model requires a unique individual (in other words, someone with a skill that is very unusual, hard to find, hard to attract, etc.) and you will need a lot of them to grow to the levels you want, you have a bad strategy. The solution to this is to change the model so that you will be able to staff your model.
My coaching client and I looked at the cost of hiring problem and realized that he was not considering all the factors in the recruitment process and addressing them wisely. In their case, they wanted people to work on a commission-only basis, be highly experienced in my client’s industry, and be a seasoned salesperson. It should not have been a big surprise that none of their ideal candidates were biting. The people that were biting required different internal support systems, and the company was not set up to help them be successful.

Understanding the Costs of Hiring the Employees You NEED

So here is how we attacked the problem. We broke down candidates into 3 groups: No Experience, Sales Experience/No Industry Experience, and Sales Experience with Significant Industry Experience. We then discussed the implications of risk, internal system support, ramp-up time required, compensation systems needed, and search strategy. What we learned from the process was that they had 4 different sales positions, two of which could not be successful without significant industry experience. Compensation needed to be very different for these people versus the others. We concluded that the client’s current internal systems and processes to support the strategy they had chosen were severely inadequate.
These revelations were critical. Failure to identify and address them would certainly have resulted in continued frustration. By addressing the disconnect between how they were approaching people decisions, their operations, and their strategy, my client was in a much better position for success. This was a clear case where the cost of hiring new employees was much greater than they realized.

Improve Your Hiring Strategy

Howard Shore is an executive coach and founder of Activate Group Inc. based in Miami, Florida. His firm works with companies to deliver business coaching to improve executive leadership development. To learn more about executive leadership coaching through AGI, please contact Howard at 305.722.7213.

Seven Techniques to Winning The War on Talent

I am impressed by the number of companies that are experiencing revenue records. And, surprised that in a large majority of cases, business should have been much stronger. Almost all of our clients have had to walk away from business or defer revenue. The primary reason has been related to people. While supply chain challenges have been a significant factor for some, two-thirds of the issue revolves around people. The number one challenge has been having had the wrong people or finding enough of the right people.

While many leaders have pity parties, others have taken a different approach. The truth is that your people’s issues are internally rather than externally driven. Yes, there are more job openings than people actively looking. Yes, many of the people who are applying are less than ideal. However, when was the last time you did not have this same problem! While many companies struggle to fill a few positions, others add hundreds of employees per month.

One client I work with had about 60 Employees in December and is now approaching 200 employees seven months later. They are on track to hire over 50 employees this quarter. They accomplished this while many other companies in their same industry are experiencing difficulty recruiting far fewer employees. There is a clear difference in how my client has approached winning the war on talent. They chose to follow the steps of other companies that were having success and not falling into the trap of listening to others that were not.

If hiring the right people is negatively affecting your business, I recommend you keep reading…

Before I get deep into how, I want to clarify that you probably need to raise rather than lower your standards. I am finding that a primary reason for your company is that you have been building a team with misfits, half-fits, people that lack hunger, and others that may be productive and a nightmare for everyone else to work with. This significantly deters the right people from applying or accepting your offers. Remember the saying, “birds of a feather flock together.” Be careful not to build the wrong flock.

When you accept lower standards, you create significant issues. And while you may try to persuade me that it is better to hire poor talent than none at all, I will respectfully disagree. Hiring success requires that you hire someone who consistently demonstrates all your core values and produces reasonably high productivity standards over one year. Those standards typically rise over the year. Anything less is a miss-hire. When you miss-hire, here are examples of the cost:

    • Let’s assume that lower hiring standards cause hiring success to be 25% (the national average). To correctly fill ten positions, it will take 31 hires before you have to fill them with the right people. Consider how much extra burden (recruiting, productivity, management time, training, and so on) it places on your organization.
    • Wrong people suck the life out of your best people. They infect the right people.
    • Wrong people cause lost business.
    • Wrong people damage your company’s reputation.
    • Wrong people cause right people to quit or not join your company.

I am sure you are reading this and thinking, “theoretically, you can’t disagree, but what do you do when you need people, and the right ones are not presenting themselves. I have identified seven techniques companies are using right now to win the war on talent.

Allocate Proper Resources

If I looked at how much organizational time and resources go into finding more of the right people, I will bet that you would receive a failing grade. You should be willing to work as hard (if not harder) to find people as you do to get customers, service customers, and create products and services. With the right people, it becomes easier to get and keep a customer. Product quality and service levels go up. To be a top-performing company, you must build a talent acquisition model that is the standard for your industry.

In every case where a company has a recruiting problem, I find a resource problem. For every eight people to be hired in a month, you need at least one full-time professional recruiter. Recruiting is not placing advertising on job sites. That is marketing, not recruiting. Recruiting is reaching to and communicating with candidates. Recruiting is a specialty role that requires the right type of person, knowledge, and skills. Just because someone works in Human Resources (HR) and has a professional designation does not make them a recruiter. Many HR people hate recruiting, suck at recruiting, and want to be doing something else. If you need a recruiter, hire a recruiter. Another common issue is delegating recruiting to administrative staff. This is the equivalent of putting a rookie in a position that requires a veteran. This is a war and you need the right weapons and strategies to win it.

The client I mentioned above has six full-time recruiters who all make six figures. What do your recruiters make? My client’s minimum standard for recruiter productivity is 100 applicants per filled position and two people hired per week. Essentially 1 in 100 candidates is employed by my client. They make every candidate complete three assessments, undergo several rigorous interviews, and have some of the highest standards of all companies I have ever worked with.

Engage Everyone

Every person in your company should be engaged in recruiting! When you are proud of your company, why wouldn’t you? Asking people for referrals and engaging them in a process is different. Engaged means it is important to them. Ask an overworked person how you can help, and they will tell you to hire more people. Yet, they know and interact with lots of people all the time. “And birds of a feather flock together.” They need to be part of the solution. If you want more people like you have, teach them how to help fill the company with great people.

Do you have a process to engage employees? Have you provided them with the knowledge, tools, and resources to help bring in candidates? Do you have a financial incentive that is worth their time? Does everyone know what positions you are trying to fill? Do they know what to look for? Have you made the process easy for them to help? If not, you are missing huge opportunities. The right approach leads to better candidates, more candidates, and often your best employees. If you are not receiving a significant number of candidate referrals from employees, they either hate working there, or you have a bad process.

Segment the Market

Similar to identifying customer segments, you need to identify employee recruitment segments. Everyone is not an ideal candidate for your position. One of our clients hires a lot of salespeople. They figured out that many of their best employees came from the car industry. These employees were well trained, well-screened, and could make far more than if they sold cars. As a result, most of their recruitment efforts target people who work for or worked for car dealerships.

Another client needs people in construction-related work and realizes that they have high success with former military people. So all of their efforts for certain positions are focused on getting access to people that are in the process of transition from military to civilian life.

Reduce No Shows

A problem that has always existed is people who applied for positions and never showed up for their interviews. With government stimulus packages to help unemployed workers, it seems to have exasperated this issue. Whether or not that is true, you need a process that discourages these people from wasting your time. We have found that requiring applicants to complete assessments before they are considered for positions weeds out the not serious people. That, combined with a quick phone screen, can help you minimize the effects of no-shows.

Increase Process Speed

Another common I see, which often is the consequence of the resource issue I mentioned above. Does it take too long to complete your hiring process? How long from when someone submits a resume to when they can get to “yes” or “no.” If it takes more than four weeks to complete your cycle from resume to offer made, you are going to lose great candidates. The lower the level, the faster your process should be. If it is a front-line position, set your goal to a two-week cycle time. They have lots of options, this is where the biggest shortages are, and the early bird gets the worm. The longer it takes to complete the process, the less interested someone will be to work for you. Customers require speed and employees are your most important customer.

Raise Pay

For any of you that have read my book, Your Business is a Leaky Bucket, you will not be surprised to find this suggestion. There are many case studies where companies paid far higher compensation than their competition and had higher net profit statistics. This happens when you are more proficient in hiring the right people. Great people do three times the work of the average worker. Finding the best people and compensating them leads to more ideal candidates and higher retention. Don’t look at compensation, monitor return on the payroll. The later is where the secret to success lies.

Leverage Virtualization

If you are one of those people that believe that people have to work in your office to be productive, you are missing a great opportunity. While I know you likely have positions that require people to be in your office, there are many situations where that is not true. By being willing to allow people to work anywhere, you increase your pool of potential candidates. When we were hiring an executive assistant, we picked markets where we thought more high-quality candidates would be. This not only increased our candidate pool, but we also found that we were getting far better candidates in other markets. In the end, we hit a home run with the person we hired. Virtualization is here to stay and can be a key weapon in the war on talent.


If you can’t fill positions fast enough, have too many underperformers, it is an internal problem, not external. Put the best talent at your biggest problem. And engage all employees to be part of the solution.

Howard Shore is a business growth expert who works with companies that want to maximize their growth potential by improving strategy, enhancing their knowledge, and improving motivation. To learn more about him or the other activate group business coaches please call (305) 722-7213.


STOP…wasting money on team-building exercises and retreats that, in the end, fail to bring about the desired results anyway. A significant reason that team-building initiatives fail is that too much emphasis is placed on the misconception that team-building should be fun. The purpose of team-building is to improve the performance of a work group, thereby creating better outcomes. This requires change, and for most people change is not fun … it is hard work. Team-building can be fun… if the members of the work group enjoy the learning process and relish the opportunities that change will bring. This is where a business coach plays a vital part in successful team building that brings results.

Key Elements For Driving Team Performance

If you want to improve teamwork and performance in your organization you have to look at the four core elements to driving team performance: relationships, goals, roles, and rules. All four of these elements must be executed well for the organization to flourish.

Focus on Improving Relationships LAST

Ironically, improving relationships is probably the last area you should focus on. Yes, the area that most leaders spend most of their time addressing is usually the symptom, not the problem. Almost every organization that has team-building issues will find their root of their problems in goals, roles, and rules. In my experience, when we address goals, roles, and/or rules, many of the relationship problems disappear.

State Your Goals

The first step toward achieving success as a team is to state your goals properly. You know your goal is well stated when anyone who reads it knows exactly what you are trying to accomplish and in what time frame. The better a person states the goal, the easier it is to create the action plan. An acronym commonly used for stating a goal properly is SMART (Specific, Measurable, Attainable, Realistically High, and Time-based).

Understanding Your Roles

In order for a team to function properly it is important that every member of the team understands specifically the actions and/or activities assigned to them. This is not as simple as some make it out to be, which is why this is usually an issue for team. There are two different types of roles: task and maintenance. The “task” roles relate to driving the desired outcome of a team. The “maintenance” roles relate to managing team processes and relationships among people on the team.

Rules Must Apply to Everyone

Rules are a very important component of teamwork. This is one of those areas many leaders, particularly in entrepreneurial and family-owned businesses have the biggest concern with. Everyone is fine with rules as long as they apply to others. You cannot have one set of rules for some people and another set for others.

Contact us if you need team-building ideas.

Howard Shore is a business growth expert and business coach who works with companies that want to maximize their growth potential by improving strategy, enhancing their knowledge, and improving motivation. To learn more about him or his firm please contact Howard Shore at 305-722-7213 or

How Strong Is Your Leadership and Management Team?

When evaluating your company’s ability to grow and to really scale itself, there is one question you must first ask yourself. How strong is your leadership and management team? Depending on your size, you may only have one level of management. As you grow, there will be multiple management levels to monitor. No matter the number of levels in place at this moment, your ability to grow will be dependent on leadership and management strength. Would your competition be jealous of your leadership and management team?

Leadership From the Bottom to the Top

“A fish stinks from head to tail.” Too often I hear the management team complaining that their company would be so much better if they had better people. If this problem is occurring in your company, start scrutinizing leadership. If you have the wrong team, you likely have problems at the top. The problem at the bottom will not be fixed until you fix the problem at the top.


Do you have the right people in the right seats? “The right people” refers to company culture. Does each of your leaders and managers exemplify your company’s core values? If not, they are creating the wrong standard of behavior for the rest of the team and will infect your business culture.

“The right seats” refers to performance. Does the person you have chosen to perform in a leadership or management position produce the outcomes required of that position? In many cases, leadership is not held to the performance standards required of lower-level employees. If I were to ask you which top 2 to 3 key performance indicators are used for each leader on your team as standards for good and bad performance, would I get the same answer from you and each subordinate? If not, how do you know you have the right people in the right seats? How do you know whether any part of your organization is suffering because its leader is underperforming?

Are They A Strong Team?

Here is where things are usually the most difficult. Do you find it hard to get people with different personalities, experiences, beliefs, and functional skills sets to work together? Do you find imbalance in how much of the leadership weight is being carried by various leaders? Do you find it strange that people who are supposed to be working together work at cross-purposes? It is frustrating how seemingly smart people can spend so much time putting out fires rather than addressing the issues that would prevent the fires in the first place. When I have met strong leaders this is what I find:

Characteristics of Strong Leaders and Managers:

  • People that never stop learning.
  • Smart and talented people who have humility.
  • Answer-seekers that ask a lot of questions.
  • Knowledge and experience combined to co-create.
  • Balance in contribution from team members in meetings.
  • All team members seek each other’s opinions on various issues.
  • Healthy conflict and debate on key issues.
  • Alignment on the priorities.
  • Decisions made and commitment from all team members.
  • Team members hold each other accountable.
  • They get the most important priorities done and consistently achieve their goals.

How to Improve the Leadership and Management Team

Understanding the necessary qualifications of a strong leader and building a strong management team takes experience and dedication to the employee. Sometimes an executive coach is needed to help increase the effectiveness of leadership and improve management skills. To learn more about how an executive coach can help your leadership and management team, call Howard Shore – one of the top executive coaches in the United States – for a FREE consultation at 305.722.7213 or contact Activate Group Inc. today!

8 Questions That Indicate Whether You Have Trust

Trust is the foundation to a cohesive team. While most leaders know this, they are unaware that they are probably breaching trust daily in their own organizations. When working with a new leadership team, I must first understand how dysfunctional the team is and specifically how strong the trust level is. Ironically, most CEOs will acknowledge some level of dysfunction in their teams but rarely understand “how” dysfunctional they are. Worse, they fail to realize how much lack of trust there is among the team members and how they are personally contributing to that mistrust. Failure to address this issue is costing companies millions. Fortunately, there are practical ways to address this issue.

You obviously cannot assume everyone trusts you equally. A great way to find out is to survey your people. I am a big fan of Pat Lencioni’s Five Dysfunctions of a Team Survey, which has questions to evaluate how much business team members trust each other. I recommend that you use a third party like Activate Group to administer the survey as you are more likely to get honest answers from the team. We can also help you use exercises to address the issue.

Do Your Business Team Members Trust You?

Here is a sample question from that survey to help you determine whether your business team members trust you. For each of these statements, how would rate your relationship with an individual team member and their relationship to you (the rating system is (1 = never, 2 = rarely, 3 = sometimes, 4 = usually, 5 = always):

  1. Team members admit their mistakes.
  2. Team members acknowledge their weaknesses to one another.
  3. Team members ask for help without hesitation.
  4. Team members willingly apologize to one another.
  5. Team members ask one another for input regarding their areas of responsibility.
  6. Team members are unguarded and genuine with one another.
  7. Team members can comfortably discuss their personal lives with you.
  8. Team members acknowledge and tap into others’ skills and expertise.

How Do You Rank?

Call Howard Shore for a FREE consultation at (305) 722-7213 to see how an executive business coach can help you run a more effective business or become a more effective leader.

Building Your Sales Force in 2014

Building a strong sales force is a key to success for many companies in 2014. There are many factors that can lead to disappointing results or actual failure including: bad company strategy, poor leadership, lack of management, failure to provide adequate training, and lack of infrastructure to support the sales force. I find that, whether or not the above-mentioned problems are present, most companies do not interview sales candidates properly because they fail to understand the complexity of the task.

Questions to Ask When Hiring a Salesperson

Sales is a very broad profession with many different types of salespeople earning between $30K to more than $1 million per year in a wide assortment of compensation structures. The salespeople you need for your situation require a special mix of skillsets, personality types, experiences, knowledge, and likeability to succeed. To give this some perspective, here are some of the different factors that one needs to know about a salesperson’s prior positions:

  • Where type of selling were they conducting: outbound and/or inbound selling over the phone, face-to-face, trade shows?
  • How much hunting/prospecting did they have to do?
  • What was their role in closing the deal?
  • Did they make presentations once or multiple times, and were these presentations to a single person or to groups?
  • How much management pressure did their previous companies place on them?
  • Were the products and services they offered top of the line, middle of the pack, different, a little behind?
  • How were they compensated?
  • What was the work environment like?
  • Did they grow existing accounts, get new accounts, or both?
  • Did they handle major accounts, national accounts, or mega accounts?
  • Was their selling direct or through an agent (channel)?
  • Were they selling to residential, corporate, small business, or institutional clients?
  • Was the initial person they called on the Ownership/C-level, Management, Business User, Procurement Agent, or Consumer?
  • Did they spend all day writing RFQs?  Have they every developed and submitted an RFQ?
  • How much resistance will they face versus in the past? For example, will they have more or less resistance with your brand, product or service?
  • How much more or less competition will they now face versus before?
  • Were they usually competitive on price?
  • What was the average size of an order compared to what you expect?
  • Can they sell custom-engineered solutions, conceptual services, commodities or products that can be demonstrated? What do they prefer?
  • What is the sell-cycle time they are used to? What are they suited to?
  • Are they more suited to selling and moving on, selling on a regular basis, selling and renewing, selling and servicing?

The mix of answers produces different types of challenges and explains why you might hire someone that was successful in one situation and fails to succeed for you. It is critical to understand your situation and the composition of skills, experience, and knowledge needed for success in your company. Your job is then to screen and interview for people that have this composition. Most companies do not spend enough time trying to figure this out. They also fail to have the patience to wait for the right people to present themselves.

Most companies have either a poor screening process or none at all. Given the range of considerations presented above most companies fail to produce a large enough candidate pool that would produce the success they seek. The more difficult your sales situation (e.g. unrecognized brand, average product or service, little differentiation, product is not a necessary purchase, complex product, lots of competition, etc.) the more candidates you will likely need in your candidate pool. I recommend a good assessment tool as your first screen and then a strong phone screen with the right questions. This will help you widen your pool of candidates and efficiently and quickly narrow it down to a short pool of 3 to 5 great candidates.

Questions to Ask During an Interview

Once you get to the first interview, you really need to do a good job of crafting your questions. The traditional behavioral interview will fail miserably with salespeople. You need to probe deeply. After 45 minutes to an hour you know you have done your job well if you can properly:

  • Assess the candidate’s past experience and determine how well that experience matches what your needs are.
  • Assess whether the candidate will fit into your company’s culture.
  • See how effectively a candidate will perform under pressure.

Call me, Howard Shore at 305.722.7213 if you think you want to address a challenge in your business or if you want an executive coach that can help you think differently.

Hiring the Right Employees

Hiring the right employees for your business can be a challenge. Most of my clients in Miami and Fort Lauderdale were adamant that they have excellent recruiting processes. The people they hired went through rigorous interviews, had great backgrounds, and should be performing at expected levels. However, the key performance indicators were telling a different story.

Underperforming Employees

Dismissing the usual answer — “the employee must have lied during their interview” — we dug deeper and asked these key questions:

  • Are expectations clear?
  • Are expectations realistic?
  • Is management sending mixed messages?
  • Does the person have the tools to do their job well?
  • Is the organization creating any barriers preventing them from doing their job well?

Hiring the Right People for the Wrong Jobs

After asking all the key questions, management realized they were hiring the right employees, but for the wrong jobs. The people they hired were a good fit for their core values and were well-credentialed. They just were not what these companies needed in order to produce the required outcomes for the jobs at hand. We see this all the time!

Management does not spend enough time really understanding the true attributes needed in the person to successfully fill the position. When attempting to hire the right people, there are many considerations in terms of experience, skills, talent, behavioral profile, and values needed to fill the role. In most cases, management fails to think this through before they hire the employee. Sometimes ,they go through the work of identifying what is needed and then fail to be patient in looking for candidates that completely fill those requirements. The result is a wrong hire.

Employee Recruitment Process

If you want to increase your success with hiring the right employees, it is imperative that you answer these questions before beginning your recruiting process. Make sure that everyone involved in the selection process knows the answers to these questions, and measure your hiring decisions against how well the candidates match the criteria. For those of you reading this and saying that you’ll take attitude over credentials any day, I say you better get both.

Key Questions for the Employee Hiring Process:

Ensuring You Hire the Right Employees for the Right Job

  1. What is the title of the position?
  2. What is the brief description of the position? In other words, what would not happen in this company if this position did not exist?
  3. What are the 3 to 5 most important measurable and specific goals/objectives this person will be held accountable to achieve?
  4. Who are the customers/clients that this position serves, and how do those customers/clients measure service?
  5. What key processes does this position own, and how do you measure that the process is working properly?
  6. What other key/critical processes are associated with the position, and how do you measure that the person in this position is doing their part well?
  7. Does the position have any certification and/or licensing requirements?
  8. What is the position responsible for and what is it accountable for?
  9. Who has input in this person’s performance review, determines their compensation/raises, and is responsible to help them develop?
  10. What do you see as the biggest challenges to success in this position and what steps must be taken to address them?
  11. What are the minimum qualifications for the position in terms of education, functional experience, and industry experience?
  12. What specific industry knowledge does this person need to have?
  13. What capabilities must the applicant be proficient in or excel at to be successful?
  14. What would you say are the critical obstacles for those filling the position, and what are the steps that must be taken to address them.
  15. Describe the ideal person for this position in terms of how they address new decisions/challenges, interact with people, deal with pace in the environment, and approach rules and procedures?
  16. How many subordinates does the position have? Describe the relationship this position has with it subordinates (e.g. can they hire and fire people?)

Results of Creating Proper Job Positions

Our clients have found their hiring success has improved dramatically once they have made a proper commitment to job design and position profiling. Only after you answer these questions should you begin your recruiting processes. The answers to these questions will help you have a much better mental picture of the ideal person. Without this information it becomes hard to screen out candidates as the ideal person is too vague.

An executive and business coach can provide you with practical business processes and solutions to accelerate your business growth. Call to learn how to improve your growth potential by contacting Activate Group Inc. at 305.722.7213.

Causing Your Own Underperformance

Causes of Underperformance in the Workplace

In every organization I have assessed, I have found the leading drivers of underperformance in the workplace are organizational recruiting and staffing effectiveness. The C-suite is the main cause of poor practices in those areas.

Generally accepted accounting principles do not have an expense line item called “Cost of Dumb Hiring Decisions.” If they did, it might well be the largest expense line item for many businesses, and companies would have to show a loss. Without taking into account bad hiring decisions and retention of ineffective staff members, current financial statements do not show the revenue you will never have, the market sector you never captured, and the excess costs you incurred because you did not spend enough time up front to really plan each new hire and then give each hiring decision 100% effort.

Performance vs. Underperformance

While the employee recruitment process is important, it is not the emphasis of this article. This article is about performance. The evidence is right in front of you on a daily basis. With only two people in the same position, you can get these varying outcomes:

  • Double or triple the difference in individual output.
  • Double the time managing one person versus the other.
  • Tons of time dealing with employee issues caused by one person while the other spurs other employees to rise up and increase productivity.
  • One person is able to do all of the assigned tasks assigned for the position while the manager must reassign some of the other person’s tasks in order to get them done.
  • One person works long hours, as necessary, without being asked while the other person leaves at “quitting time”, no matter what extra effort might be needed.

Managing Underperformance

With so much evidence that hiring the right people can have a dramatic impact on growth and profits, and that by hiring the right people you dramatically reduce your own stress, I have made this a personal mission to make it a top strategic priority.

When we work with a leadership team we ask leaders to rate their people on two dimensions: 1) consistently adhere to core values, and 2) meet or adhere to high performance standards for the position. Here is what we typically find:

  • Management has few yardsticks with which to measure the productivity of their employees. They have to guess, so it’s usually a popularity contest.
  • Management sets a low bar in terms of establishing standards for positions. We know this because the standards set are usually far lower than what the top performers achieve on a regular basis.
  • A high percentage of people do not really adhere to core values or meet performance standards, and management has decided to accept this behavior.
  • When we dig further into the accomplishments of people who management perceives as their top performers, we find that they may be performing well in some aspects (usually the pet peeves of the boss) but generally are not doing an exceptional job.

Signs That You May Be Causing Underperformance in Your Organization

Here are comments and questions I hear from leaders on a daily and weekly basis that tell me that they have left huge amounts money on the table over the years. If you are guilty of making any of these comments, it is time for organizational rehabilitation to maximize your firm’s value:

  • If someone is not hired by the time I get back from vacation, I will be really angry!
  • Why are you scheduling so many candidates for interview?
  • Why are we screening out so many candidates?
  • This recruiting process is too much work; just hire someone already.
  • A friend of mine says this person is great, so let’s bypass the process and get him/her in here.
  • That is not an important position; just hire someone.
  • Even though this is a great candidate, let’s see some more before we make a decision.
  • I know this person is not exactly what we need, but let’s hire them anyway. We can train and coach them to be what we want.
  • Why are you spending so much time with candidates?

Signs That You’re Influencing Higher Levels of Performance

Examples of comments that would indicate that leadership has made recruiting and performance a priority would include:

  • Too many bad candidates are getting through; let’s increase our screening criteria so we are interviewing better candidates.
  • We are going to treat every position as critical so we do not damage our culture.
  • We need to stick to our process or we are going to expose the company to unnecessary risk.
  • I would rather take longer to hire the right person than knowingly hire someone that does not meet our requirements.
  • What can we do to speed up the hiring process without compromising it?
  • After talking to candidates, is there a mismatch in our criteria that is causing us to slow down the process? For example, are we offering competitive compensation for the requirements we have put out there?
  • Does it look like we have created a position with requirements that have limited candidates? If so, how can we get creative to attract them to us?
  • What can we do to modify or change placement of our advertisements to attract better candidates?
  • Can you provide a report on the candidates we have had and reasons we have screened them out?

Learn How to Improve Employee Performance

An executive business coach can provide you with practical business processes and solutions to improve employee performance and accelerate your business growth. Contact Activate Group, Inc. to learn how to improve your growth potential or give us a call at 305.722.7213.

Recruiting Talent: Unusual Yet Effective Approaches

When Dietmar Petutschnig needs to find great engineers for his manufacturing company, ISD Limited in Whangarei, New Zealand, he heads to the docks. ISD is focused on innovation in the agricultural sector. One pursuit, for instance, is turning effluent from dairy firms into drinkable water. Recruiting people who fit into the company’s culture is crucial to its R&D efforts–yet that’s not so easy, given the country’s remote location. “How do you find engineers when all of the engineers want to leave the country?” asks Petutschnig, who acquired ISD in 2010 through Minerva Reef Fund, a venture fund he started with a partner.

Know the values that matter in your culture

His answer is to show up at coastal ports in late October and early November, when sailors navigating the globe tend to take shelter here from Caribbean storms.  The incoming vessels are full of people who have been successful enough in a previous business career to afford to buy sturdy enough craft to cross the ocean. Moreover, folks drawn to long-distance sailing tend to be mechanically inclined, since there’s no one to phone for repairs. “In the ocean, you have to fix things for yourself,” he says. And they’re resourceful and tough. “These are people who have made it across very challenging circumstances,” he says. They’re not easily rattled, he says, if a company hits a bump. People with this set of qualities have tended to thrive at ISD.

Not all growth companies face the same geographic challenges to recruiting as ISD does. But even those based in engineering hotbeds like Silicon Valley or the Boston tech corridor face competition from around the world for talent. And Petutschnig’s innovative methods carry lessons for every company, whether you’re located in dairy country or a big city. (I’ll get to another example of really creative recruiting by the tech firm Atlassian later in the column).

Tap informal networks for talent

One crucial part of what ISD does is show up in the right place at the right time. In some cities, that might mean hanging out at a particular Meetup where the tech talent tends to gravitate. At Petutschnig’s previous firm, Nunet AG—a tech company that serves broadcasters that got acquired in 2006—that would have been a practical approach. But at ISD, he, instead, keeps in touch with other sailors, whom he considers his “recruiting agents,” to find out when new arrivals are coming in–and shows up at the waterfront, ready to strike up a conversation.

“Docks are very social platforms,” says Petutschnig, who owns a 44-foot catamaran and sailed here with his wife, Suzanne DuBose, from the U.S. on a trip from 2008 to 2009. “You tend to know of people before they even come. Someone will meet them and say they’re coming next year.”

Ease into long-term work relationships

If Petutschnig hits it off with a new arrival, he’ll offer coffee or a drink to continue the conversation “You find out about their dreams, where they’re at,” he says. Then he might throw out the possibility of staying in New Zealand for a while by working at ISD. Sometimes, the right candidates will get interested. “They’ll postpone their day of departure from next season to a few seasons down the road,” he says.  And with three-month trial periods of employment typical in New Zealand, both ISD and the candidates know they will have a chance to try out the arrangement before it becomes a permanent one.

So far, ISD has hired four candidates this way: a director (who’s Petutschnig’s business partner) and three engineers. That’s brought the total headcount to 20 people.  “Our goal is to be a $10 million-revenue company in the next three years,” says Petutschnig. With innovative hiring practices like this, he’s on his way.

Don’t wait for candidates to come to you

Another company that’s gotten really creative about getting the right people on the bus—literally—is software firm Atlassian, which has offices in Sydney, Australia, and San Francisco. It’s more than doubled its head count to 550 over the past two years. A few months ago, it launched its “Europe, we’re coming to steal your geeks” recruitment roadshow, traveling around European cities in a bus to find 15 developers in 15 days. “We had a unique opportunity with the European economy not going as well,” says Joris Luijke, vice president of human resources/talent. Atlassian’s bus tour—a great idea for a company known for doing unusual and creative things—picked up interested candidates, where company representatives offered them a beer and told them about life in Australia. The company publicized its day-by-day progress on Twitter. Attracting press coverage everywhere from Spanish TV to the Wall Street Journal, Atlassian got 1,000-plus applications—and found 15 great developers willing to move to Australia.

A couple of crucial takeaways: Atlassian realized that recruiting is, as Luijke puts it, “a numbers game” and made efforts to generate enough buzz about its hunt to attract a large pool of talent. And once it found amazing people, Atlassian didn’t waste time. It offered them a job on the spot. “We cherry picked the best of the best,” says Luijke. That’s how creative—and aggressive—you have to be in today’s economy to snag tech talent, before your competitors do.

Call Howard Shore for a FREE consultation at 305.722.7213 to see how an executive business coach can help you run a more effective business or become a more effective leader.

Is It Time to Bring on a Business Partner?

How do you know when it is time to bring on a business partner? I just brought on an executive leadership partner, and am so excited for the great opportunities this will bring to AGI. My new partner, Lou Partenza, brings amazing business expertise, new business development experience, and will help me expand the capabilities of AGI and take it to the next level.

Until Lou came aboard, I was spread pretty thin, which was preventing me from growing the business the way I envisioned. We all have our capacity limits and I was reaching mine. I have an amazing team, but I was carrying too much of the load myself. The sheer volume of accounts and potential new business demanded I bring another executive-level person into the fold. I brought in Lou as my partner, and by doing so I immediately increased my company’s capacity.

Define Business Partner Needs

Besides increasing capacity, there are other very good reasons to consider bringing in a partner. Maybe you want to enter a new geographic market or start selling in a new community with a culture and/or language barrier. The long-term goals of your company should weigh heavily in your decision to bring in a partner and the type of partner you seek.

The first step is to decide what role you want the partner to play. Do you need someone for an executive leadership role for business guidance, or do you need someone with a total focus on new business development?

Based on the desired role, define the skill set for this person. The search process should be similar to bringing on a full-time employee. You want to look for a partner that has a set of complementary skills—skills that you may not have but really need in your business. The difference between a partner and employee is your partner will be someone who will assist you in making key decisions for the company, so they should be someone with whom you really mesh. You need to be able to bounce ideas around and have equal amounts of commitment to growing the company.

Define Success

Once you identify your potential partner, be careful to clearly define the role that you want them to fill, and define success metrics and expectations around that role.

Finding the right partner isn’t something that happens overnight. My advice is to start looking passively now. Even if you aren’t sure you need a partner (or a full-time employee for that matter) you should be in a constant state of recruitment. Great talent—especially at the partner level—is not easy to find. Talk, ask around and always be looking for great talent for key areas of your company.

Don’t Rush Into a Business Partnership

One caution: don’t make the mistake of bringing on a business partner too soon. Make sure you are eating well before you bring someone in. It takes energy and money to bring someone in as a partner. It’s important to be able to recognize where you are in your company’s evolution and know that you are financially stable before you commit to that extra executive salary.

Howard Shore is an executive leadership coach who works with companies that need leadership development and business management coaching. Based in Miami, Florida, Howard’s firm, Activate Group, Inc. provides strategic planning and management coaching to businesses across the country. To learn more about executive leadership coaching through AGI, please contact Howard at 305.722.7213 or email him.

4 Ways to Create Linsanity on Your Team

Do you have a Jeremy Lin on your team? You might. You may think you understand the potential of every person on your team but the truth is, you could have unbelievable, untapped talent sitting “on the bench” just waiting to be discovered by you—or your competitor. As company leadership we must think like championship coaches and learn to recognize and develop game-changing talent.

Jeremy Lin had been passed over, cut and underutilized his entire career. Yet, he quietly kept practicing and getting better. When the NBA lockout was going on, he used that time to practice harder and get better. When the season started, they kept him on the bench, and he kept practicing and getting better. And when they had no one else to put in, they put in Jeremy…and he blew everyone away. But what if he never had the chance to play? He would have been one of the best talents in the NBA, gone to waste.

So how do you identify your hidden Jeremy Lin? And when you find raw talent on your team, how do you develop it?

1. Use Talent Assessment Tools

Having great talent on your team starts with the hiring process, and that process should start with using assessment tools early in the candidate screening process. Talent assessment tools are keys to understanding the natural talents of your candidates. You can also use them post-hire to identify employees’ hidden qualities and talents that may have gone unnoticed. Every person has natural abilities—skills that cannot be taught—and areas that they have the capacity to develop. Things like strategic thinking, vision and data analysis capabilities cannot be taught but are an enormous asset to the team. Folks with these abilities should be coached and put into a leadership development track that builds on those talents. Assessment tools like the OMG Assessment and TopGrading are extremely effective in discovering these traits.

2. Ask the Right Interview Questions

Again, having great talent means finding great talent during the hiring process. After you have the results of your assessment tools and begin to understand what the natural talents of the candidates are, you need to make sure your hiring managers are asking the right questions to identify the people who are best suited for the team and the company’s strategy. As experienced leadership development coaches, we recommend asking the following about the candidate’s key past job experiences:

  • What were you hired to do?
  • What were your accomplishments?
  • What were your low points?
  • Tell me about your team…
  • Who was your boss and what would they say about you?
  • What were they like to work with?
  • When I talk to him/her what will they say were your greatest strengths and your areas for improvement back then?
  • Why did you leave?
  • What are your future goals?

3. Manage by Walking Around

Are you really noticing people for who they are or are you judging them with personal bias? The goal of executive leadership should be to capture all the positive energy that occurs when someone is working at high levels of performance. When employees are in the right role for their talents, performing work that is satisfying, they are happy and energetic, and it’s infectious. Learn to spot this energy, develop it and use it to motivate others. People who are challenged with tasks they enjoy breed positivity.

So how do you encourage this energy?

4. Assign Special Projects

As you are walking around and noticing your energetic employees, ask them questions and try to get a sense of what they want and love to do. Then give them opportunities to excel at those things. All leaders, from executives to managers, need to do this.

Jeremy’s special project was to play point guard when there wasn’t anyone else to jump in. He excelled and he became the “A” player that changed the team.

Howard Shore is an executive leadership coach who works with companies that need leadership development and business management coaching. Based in Miami, Florida, Howard’s firm, Activate Group, Inc. provides strategic planning and management coaching to businesses across the country. To learn more about executive leadership development coaching through AGI, please visit, contact Howard at (305) 722-7216 or email him.

Lead Your Team Meetings

Not many of us look forward to meetings. Whether you have them weekly, monthly, or quarterly, they are bound to be accompanied by groans and complaints. This is a problem. These negative responses towards team meetings may be because performance and contribution are down. Your meetings are lacking substance and people are no longer interested in what the team leader has to say. Is this because the team leader is no longer taking into account what the team has to offer?

It is often said that if everyone agrees than someone is not needed. This may be true, but the real issue may be that the team dynamics in the organization have been broken.  There are many leadership missteps that may be killing and destroying teamwork and cause conflict avoidance. Here are a few examples of when a leader can destroy the team.

  • Stopped being curious and really does not listen to people when issues are raised in meetings.
  • Intimidating or threatening so subordinates have fear of reprisal so they do not want to speak up.
  • History of judging people in the room (and voicing those judgments) when opinions differ from theirs or are not strong and thus people do not want to be vulnerable.
  • Appears to only be self- interested.
  • Tendency to interrupt other team members before their idea may be completed.
  • Makes personal attacks when they are not getting their way.

There are times in our lives when we must revert back to that old childhood adage of “play nice with others”. These team meetings are essential to the core of your company. Meetings give us the opportunity to not only remain up to date on the progress of the business, but to view the progress of those responsible for it. Inhibiting ideas and squelching brain-storming will cause a fall in production from the employees and result in an eventual loss in profit. If everyone is not weighing in and openly debating and disagreeing on important ideas at your meetings, look for passive-aggressive behavior behind the scenes or back-channel attacks. What organizations find is that healthy conflict saves them a lot of time and leads to better decisions. The role of the leader is to practice restraint and to allow for conflict and resolution to occur naturally.

Howard Shore is a business growth expert who works with companies that want to maximize their growth potential by improving strategy, enhancing their knowledge, and improving motivation. To learn more about him or his firm please contact Howard Shore at 305.722.7213 or

Trust is Essential For Teamwork and Maximizing Results

Does your organization, project, or next big deal depend on teamwork? Well, how strong is the trust within your team? Trust is essential to maximizing results.

Imagine that you are playing basketball. You are in the fourth quarter with 30 seconds left on the clock, and you are down one point. It is critical that you can count on the other members of the team. Imagine a team where you can count on any player’s ability to make that final shot versus another team where you do not have confidence in anyone to make the final shot. And if you need to stop the opponent from scoring before you get the chance to take that final shot, you must be able to depend on your team to play tough defense and get the ball back. What if you felt like someone on the team would not pull their weight?

This is essentially what goes on in the workplace every day. If trust-building is not dealt with, you cannot maximize the performance of your organization.  “Trust” starts with the premise that one’s peers’ intentions are good, and that there is no reason to be careful around group members. Once trust has been broken, its absence is hard to overcome.

In most teams, too much time and energy – and too many good ideas – are wasted trying to protect one’s reputation by managing behaviors, comments, and interactions because of a lack of trust that was created in previous interactions. People are reluctant to ask for help and to offer assistance to others, causing lower morale and unwanted turnover.

In addition, absence of trust in others causes people to create poor work behaviors. Instead of addressing the trust issue, they choose to do things themselves instead of delegating. Or, when others display a behavior they do not like or seem to not be delivering on promises, they take work away instead of addressing the issue at hand. Worse, they may even set lower goals so that they know they can achieve them without the assistance of others.

To address this lack of trust on a team, a leader must demonstrate vulnerability first, and make sure they are authentic and use good timing when doing so. Leaders must encourage open dialogue in meetings, look for situations where people engage in behavior that demonstrates lack of trust, and bring it out in the open. They need to have everyone openly discuss the strength each team member brings to the team. They also need to describe the behaviors that lead them to be distrustful and get them to address those behaviors. No one, including the CEO, is immune from this exercise. One bad apple will spoil the batch.

Howard Shore is a business coach and growth expert that works with companies that want to maximize their growth potential by improving strategy, enhancing their knowledge, and improving motivation. To learn more about him or his firm please contact Howard Shore at 305.722.7213or


Thanks Steven Slater and Jet Blue

I have been reading about Jet Blue’s flight attendant’s meltdown, and whether or not Steven Slater started the affair or the passenger did, it still highlights something that we can all probably agree on. People in general have lost their manners, and society needs to get back to basics. Whether we are on the road, in an airplane, in the workplace, shopping, or at home, people are not treating each other properly and in many cases are just downright rude and disrespectful.

I could never talk to my parents the way I hear kids speak to theirs today. The quality of communications among people has declined thanks to e-mail, text, twitter and other reasons not to talk face-to-face. Texting and e-mails have caused more strife between people than ever could be imagined. People do a poor enough job expressing themselves in person.

Even without the messaging problems, the basics have just gone out the window. For some reason, it seems that as generations go by, people think that it is okay to be disrespectful. Common courtesies have gone out of fashion like clothing. For example:

  • How often do all the ladies leave the elevator first?
  • How often are people holding the door open for people or just rushing in?
  • In South Florida I do not think anyone is ever on time. When someone is late, they are showing lack of respect for the people waiting for them.
  • When someone cancels a meeting at the last minute, they are showing disrespect for the other person’s schedule.
  • How often does someone see someone else carrying something heavy and pretend not to see them instead of offering assistance?
  • People do not return phone calls, e-mail, or invitation responses.

So after pondering these thoughts, I was considering some of the companies in the world that are known for their customer service. These customer service techniques are rooted in good manners. Saying thank you and you’re welcome, holding open the door for people, and other basic good manners.

I recently visited Aruba and was amazed at how friendly everyone was. I do not care who it was. You could talk to anyone, and they were helpful. The Aruban economy is clearly dependent on tourism, and the small country totally gets it. Compare that to say, Miami, which also heavily depends on tourism, and I would say half the hotels are not nearly as friendly and helpful as some of the street people were in Aruba. There was no surprise that in Aruba they have 2% unemployment, low crime and what they call a “happy island.”

So maybe if our state and federal governments want to spend money on something useful to improve our economy, they should require every American to attend good etiquette and customer service training. This alone might put our economy back on track and give us a competitive advantage over other countries.

If the government cannot see the forest through the trees, business owners must. If your company does not have a large loyal customer base, take a look at how well the staff treats each other and its customers. If you do not think they are setting an example in how well they treat people as human beings, I am sure it is having a negative impact on your top and bottom lines.

Howard Shore is a business growth expert that works with companies that want to maximize their growth potential by improving strategy, enhancing their knowledge, and improving motivation. To learn more about him or his firm please or contact Howard Shore at 305.722.7213 or

Accountability and Championship Teams

The true test of your team’s commitment and buy-in to its goals is accountability. Without accountability teamwork breaks down. Sports teams provide us with a great look at what happens when a team is working right. Have you ever noticed that the players on championship teams hold each other accountable? They will not stand for other members of the team not playing their role to win. Failure of one team member means failure of the team. As a result, they are all watching to make sure each other do their part to win.  The coach does not even need to get involved. Each player knows their job and so do their teammates if someone fail they know it and so does everyone else. It is not unusual for someone to apologize to the other team members when they fail to be in their position or a man gets by them. 

Are you creating enough clarity around roles and specific outcomes for each team member so that they can self police? It is essential that everyone knows what is expected of them and that this is public knowledge.  The more clarity and specificity the better! When someone fails to achieve their part of the plan they need to be held accountable and exceptions should be rare. If you create an environment where only some people are held accountable or goals are only sometimes achieved then you will not be able to create a championship team.

Commitment Is Rare

Many people think that making a decision is the same as making a commitment. This could be the farthest from the truth. Actually, the hardest decisions oftentimes have the weakest commitments, particularly the larger the group size.

Does this scenario sound familiar to you? More than a year is spent thinking about something; maybe even a committee is created to evaluate it. Consultants are hired; friends and colleagues are conferred with. Money is spent for market research, and finally an affirmative decision is made. The project, system, process, or other decision is placed into action, and all of a sudden the inevitable happens – problems arise – big problems, little problems, and attitude problems.

What happens to most people’s level of commitment when faced with these problems? Rather than addressing the problems, they ignore all of the thought that went into making the decision and allow emotion to take over. Their commitment to the decision it took them a year to make crumbles, and with it the chance of following through on the decision.

Commitment is often missing in many organizations. Many times it results from a lack of healthy debate in meetings or because a leader or leaders discourage opinions that differ from their own. Many decisions are the result of false consensus and weak buy-in. By having productive conflict and tapping into everyone’s perspectives and opinions, everyone can confidently buy in and commit. Even those who voted against the matter at least know their issues have been heard and considered.

Another issue that arises and hurts commitment is consensus building. Great teams know the danger of seeking consensus and certainty and find ways to achieve buy-in from the rest of the team. The leader’s role is to demonstrate decisiveness and to communicate awareness and acceptance of the fact that some decisions may turn out wrong. He or she must push decisions around issues, as well as adhere to schedules that the team has set. The leader must cascade messaging to key people in the organization to support follow-through on decisions so that everyone is clearly aligned.  The leader must not show weakness in making decisions and take action when fellow leaders show a lack of support.  Particular attention should be given to those people that take passive-aggressive approaches to undermine decisions. I have low tolerance for this type of behavior, because for me, a failure to strongly support the decisions of your leaders is the equivalent of helping the competition and is a form of dishonesty. If these people want to help the competition they should go work for them.


Howard Shore is a business growth expert who works with companies that want to maximize their growth potential by improving strategy, enhancing their knowledge, and improving motivation. To learn more about him or his firm please contact Howard Shore at 305.722.7213 or

Conflict Avoidance Hurts Teamwork

A great way to tell whether you have a strong team is by the amount of regular, healthy conflicts that occur in meetings when decisions are being made and if decisions are really being made at all. It is often said that if everyone agrees than someone is not needed. This may be true but the real issue may be that the team dynamics in the organization has been broken. This breakage may be causing key people that can be contributing to stop contributing.

There are many leadership missteps that may be killing and destroying teamwork and cause conflict avoidance. Here are a few examples of when a leader can destroy the team.

  • Stopped being curious and really does not listen to people when issues are raised in meetings.
  • Intimidating or threatening so subordinates have fear of reprisal so they do not want to speak up.
  • History of judging people in the room (and voicing those judgments) when opinions differ from theirs or are not strong and thus people do not want to be vulnerable.
  • Appears to only be self interested.
  • Tendency to interrupt other team members before their idea may be completed.
  • Makes personal attacks when they are not getting their way.

According to Pat Lencioni’s book Five Dysfunction of Team, “fear of conflict” is one of the five dysfunctions that are critical to teamwork.  The leader has to make sure that this behavior is not tolerated, and that topics focus on the issues that need to be resolved. If everyone is not weighing in and openly debating and disagreeing on important ideas at your meetings, look for passive-aggressive behavior behind the scenes or back-channel attacks. What organizations find is that healthy conflict saves them a lot of time and leads to better decisions. The role of the leader is to practice restraint and to allow for conflict and resolution to occur naturally.

Howard Shore is a business growth expert that works with companies that want to maximize their growth potential by improving strategy, enhancing their knowledge, and improving motivation. To learn more about him or his firm please contact Howard Shore at 305.722.7213 or