I find all business challenges fall into one of three categories: people, money, or business model. With the right people, you can make anything happen. With the right money from the right sources on the right terms, you can fund your company's growth. With the right business model, you'll stay focused and build an easy/lucrative/fun business. To ensure steady business growth, you need to be able to manage all three.
Today, I want to talk about people. Yes, many of us don't want to focus on the human resources function of our business, or we find recruiting to be wildly time-consuming. But ignoring the people part of your business can lead to avoidable mistakes. I've certainly made my fair share. Here are a few big ones I want you to steer clear of.
1. Mismatching people and positions.
2. Hiring people based on potential and promises instead of track record.
3. Interviewing the résumé instead of the person.
A System Borrowed from Toyota
Which is why I want to tell you about the "Situations, Tasks, Actions, Results" (STAR) and "topgrading" methods for recruiting, which I am thrilled to say I am using in my own business with fabulous results. STAR was made famous by the team at Toyota. I've distilled STAR down to its essence to help you make better hires.
Situations: Has a potential new hire done the job or not? If hiring a part-time administrative assistant, has he held an administrative job in a 10-person office? If yes, move on to the next step. If no, b'bye.
Tasks: Is he able to assist the accounting department with billing and collections in addition to managing all the other tasks involved in supporting an office impeccably? If yes, move on to the next step. If no, b'bye.
Actions: He says he's done administrative work for a 10-person office before, as well as assisted with billing and collections. Did he also replace paper files with electronic files? If yes, move on to the next step. If no, b'bye.
Results: Can he complete his core responsibilities in 20 hours or less? Has he done this before? If yes, welcome aboard! If no, b'bye.
The STAR system shows that past behavior and past experience predicts future behavior and the ability to succeed in the job at hand.
Taking It from the Top
Now I'll tackle topgrading, a technique to hire, coach, and keep top players developed by brothers Brad and Geoff Smart. The net-net if you follow their approach is you'll more effectively weed out the non-A players and more thoroughly understand who a person is before you hire him. Topgrading consists of a series of steps:
1. Conduct a talent review of your team members.
2. Create scorecards for each role, so you clearly communicate what success is and isn't.
3. Build your virtual bench of A players, meaning always be recruiting for your future hiring needs.
4. Use structured interviewing techniques for screening, topgrading, reference-checking.
O.K., confession time. I still need to complete steps one and two in my own business—what we have is pretty loose. No. 3 I am getting better at, and I perform the three types of interviews the Smart brothers recommend. Since this is where I've got the most experience, I'm going to home in on what should happen in each interview and how to do them.
Narrow It Down over the Phone
Screening Interview. Here's what you want to learn during the screening interview, which is conducted over the phone:
• The candidate's career goals.
• What the person is really good at professionally.
• What he or she is not so good at, or not interested in doing.
• Who the candidate's last five bosses were, what each boss would list as the candidate's strengths and weaknesses, plus an overall rating the boss would've given the candidate (I use a scale of 1 to 5, with 5 meaning exceptional).
I especially like the last question. When candidates tell you the rating their past bosses would've given them, something fascinating happens. They either reveal their arrogance, or they reveal their humility. I have a follow-up question, which is "What would you have had to do to have gotten a score of 5?" This further reveals any disdain for authority, exposes a difficult working environment, or some other potentially useful nuggets.
Some Questions to Ask
Topgrading Interview. This interview will take about two hours. You'll want to have a note-taker present so you can focus on the candidate. Remember to interview the person, not the résumé. Questions to ask for each past job are:
• What were you hired to do?
• What were your accomplishments?
• What failures or mistakes did you make in this job, and what did you learn from them?
• What employees did you inherit ("A's", "A" potentials, and non-"A's"), what changes did you make to this talent mix, and what employees did you end up with?
• How would you describe the people you worked for and how would they rate you?
• Why did you leave?
I also like to add "What rating, 1 to 5, would your direct reports give you and why?" Remember, we all need to manage up, manage down, manage across. Everyone can stand some improvement at one of the levels. Find out from your candidate where he or she needs help in advance.
Last But Not Least
Reference Check Interview. These babies are short and sweet. Keep it snappy so the reference doesn't get irritated and stop providing information. Questions to ask are:
• The context in which he or she worked with the candidate.
• The best examples of the candidate's strengths and weaknesses.
• How he or she would rate the person's overall performance in that job.
• Further elaboration or insight regarding something specific the candidate admitted to struggling with in that job (this is a creative way of gathering more information about weaknesses).
This is just a quick look at the topgrading process. I highly recommend you dig deeper into it online. Good luck using STAR and topgrading in your recruiting efforts.