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.

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.

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 Miami 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.

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.

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.

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.

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.

EVALUATING MANAGEMENT

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!