MBA Mondays Series: Human Capital
When I asked everyone where to go next last Monday, I got a ton of great suggestions. But at the top of the list, with 24 upvotes was this one by Robert Holtz:
How about the job of recruiting talent?
Finding/attracting the right key people, where to go to find good hires, getting headcount dialed in right at various stages of development, in-house versus outsourcing (when to do or not to do each), good hiring practices (i.e. interviewing, evaluating, selecting new hires among candidates), and also the evolving VC's role (some, as you know, are not just advising in this area but actively functioning as a recruitment partner/talent agency).
So over the next roughly ten Mondays we will explore the issue of Human Capital on MBA Mondays. This is indeed a huge one. Possibly the single most important thing you will face in building a business.
It is not my sweet spot. I'm more of a product, strategy, finance person. But I've developed a huge appreciation for the role of human capital in a startup over the 25 years I've been in the venture capital business and I spend as much time on this as anything else these days. So I am going to give it my best shot and then call in the experts.
Here's a basic outline (taking a lot from Robert's comment):
– The importance of culture and fit when hiring
– Where to find strong talent
– Optimal headcount at various stages
– Best hiring practices
– How to leverage your partners (including your investors) in the hiring process
– Guest posts from several top HR/CPO executives
– Guest posts from several recruiters
– Guest posts from several CEOs who excel in this area
It should be a good series. I am looking forward to it.
Great topic.Especially interested in innovative approaches that recruiters are using. Including pricing models.Curious if there are new tools or platforms that are changing the game. Is anyone creating the HR equivalent of the VRM replacing CRM paradigm?
we will have a couple recruiters do guest posts. i’ve already invited one who is a distinguished member of this community.
Looking forward to this and to one of them especially!Big question for me is to see if innovation in process and pricing has evolved or if it is still a rolodex and LinkedIn game with the same 20-30% of years comp payment structure.
Yeah, I’m sure she’ll do a great post!
That is going to be the puzzle for the whole week finding out who she is… 🙂
Ah. A recruiter and distinguished member. Wonder who that could be?;-)
This series looks amazing. If you want to go a bit broader, I would add a post about measuring performance and another one about firing (nobody likes it, but sometimes it has to be done). It’s not recruiting, but both have an important impact on it.
firing would be very interesting. . .so many preach the “hire slow, fire fast” until they have to do it, yet I’ve never heard anyone say – I wish I had not fired him so quickly.
Good line.I disagree about the hire slow, though. If you are willing to fire fast, then nothing wrong with hire fast (or moderately, anyways). I have seen several clients shoot themselves in the foot doing mental masochism over whether the candidate is a “perfect” fit or not… and then lose them and leave a role unfilled for 6-12 months or longer.
Half the process of hiring is figuring out what job you are really hiring for. A great recruiter, like a great salesperson, is a maven because they get this.
Therefore, logically (to quote Monty Python), a great recruiter, like a great salesperson, is extremely rare, because so few actually do get it.
This is very true. However, sometimes the recruiter has to wait for the client to figure this out or to trust her enough to let her guide them. The stories I could tell. Today, a client is making an offer to a candidate that they said “no” to the first time I presented him. What happened between that initial no and then the yes is a story in itself. Led to this tweet… http://bit.ly/J9xvqR
Great info.So is recruiting:-a service industry like a web shop-a partnership-a frame of mind-all of the aboveIf All, how does the company find the right match for their point of view.Discovery of the recruiter they can trust is as much a risk as finding a candidate.Seems like this process has been critical forever and still not any easier, even with ubiquity of information and transparency of people’s backgrounds.
All the different descriptions apply, although not sure what you mean by “frame of mind” — except I do believe that recruiting should become part of a management team’s thinking, maybe even the entire team’s in a startup. I wrote a post about this recently –> http://bit.ly/IOwqWn (One of my attempts at a more practical post.) Often when companies want a recruiter’s help, what they really want is “sourcing” i.e., finding candidates — and don’t want/need much consultation on their needs or assessment of candidates. You need to become more selective if you are seeking someone to work with on a longer term basis and/or if you need someone who can be more consultative. My personal preference is to partner with clients — I do my best work this way.However, to one of your points, a huge part of selecting a recruiter is finding someone you trust and who “gets” you — someone that you can enjoy working with — who it will be a pleasure to interact with. Of course, you also want the person to be competent but there is a high burn rate in recruiting, so if someone has been doing this a while, they are probably doing something right. I don’t think specialization is as important as the person’s ability to figure things out quickly and to understand your needs.
Going to love this series.A tough, important topic.I listen to you and hear a pro that knows the trade and even more knows how to listen and read people.The intersection of understanding human nature, tips and tricks and processes to really internalize recruiting is the mashup here.
Yes. I’ve never employed someone at will (much tighter labour laws here), so I’d be very interested in hearing about performance management and dismissal in that context.
So true. My hands used to shake when I fired people. It is never fun but often necessary. One of my mentors finally told me “you realize that the employee is twice as miserable in a bad fit as you are. As long as you’re kind to them, you’re doing the both of you a huge favor by ending this.”
I’ve fired lots of people. I don’t want to think about the count. I’m sorry but that is a rationalization.If it makes you feel better well we all have to do what we have to do. Don’t get me wrong either, keeping them is worse for the company and everybody else than getting rid of them. So I think the fact is that you have to do it for everybody else on the team.My wife and I can have the most bitter argument ever, but the only time we sleep in separate beds is when I have to fire a person (or when one of the kids is sick because as a nurse she worries so much about them)
Yeah, I didn’t even touch the impact on the rest of the team. That can be a huge part of the problem as well.I feel like I’ve gotten the last few right. I didn’t fire too fast. I gave the people a chance to improve. When they missed that chance, I did it quickly, helped them find something new, and have given them good but honest references since.
Don’t get me wrong. You have to do it.My point is when people come up with the concept of you are doing the person a favor….long term yes if they have the ability to learn. Short term it is a punch in the gut. Once you let the ugly head of rationalization rear its head you start convincing yourself you should be like Steve Jobs. As Joel Spolsky said you are not.As far as the references I have lost respect for a couple of people when I hired somebody check references and it was a train wreck and after it ended they told me yeah……he really was a “^%&*” Well, thanks a bunch buddy.
Yeah, that’s not what I meant at all.I won’t lie with references. I’m talking about people who are talented but are genuinely a bad fit for the job I have.If they are miserable, and they’re making me miserable, and they’re making the team miserable, you owe it to yourself to make the change but try and support them on to their next job where hopefully they will find a great fit.I’ve certainly fired people who deserved it, don’t get a good reference from me, and hate my guts for it. Such is the life of a CEO.
Depending on the reasons you were fired, it becomes hard to ask for references….
Firing is key factor in having a healthy work place.Some people don’t fit no matter how talented they are. It’s always best to do this quickly and directly. It’s best for all involved.
I hope that the series gets people to think beyond skill sets (“engineers, community managers, and UX rockstars”) and that they understand that “culture and fit” is ever evolving and needs to be thought of as “being and becoming.” ESPECIALLY in small companies and start ups.Sometimes you have to go against the grain….
Yes, and also the notion that talent and performance are not fixed attributes, and subject to environment.Here’s a related research finding: many firms overvalue external hires.http://knowledge.wharton.up…Yes, it’s about large companies, but we all can fall into the trap of using false signifiers for “talent.”Great series! I can’t wait.(and hopefully this won’t post twice — either user error or Disqus ate this comment the first time I typed it in!)
Here is another article that goes a bit further:http://www.forbes.com/sites…Yes, I agree with the idea that “traps of false signifiers” exist. I cannot help but see a real similarity between the concept of “A People” and the idea of “good ol’ boys network.”
Exactly, Carl. And at worst, labeling people as C players or Losers, a brand that could follow them elsewhere. (The “bad body, ugly girlfriend” problem described in Moneyball, so deftly laid out in that recruiting scene at the beginning of the film. For those who haven’t read the book, it goes deeper.)Thanks for the article!
The biggest false signal that becomes a perpetuation of itself (in large corporate recruiting at least) is a prospect getting that one blue ribbon company on their resume/CV. So the thinking goes, if “Brand Name Corporation” hired them they must be strong, best in class, etc. And that begets a brand name run of 3-5 year stops and hiring mistakes for talent that is often not that talented (in my experience this happens a lot with financial services careers in the NY metro area). It is the downside of an employer Halo effect. When somebody offers up that they worked at Goldman, or Amazon, or Kraft, there is a knee jerk assumption to assume they are capable, talented and an asset. They might in fact be hollow and fairly untalented, but hiring leadership will typically start their assessment through a glowing filter, and not see where there might be gaps and issues. You can then take an alternate view to those who have worked at seemingly small time firms and the incorrect presumption that their skill set is small time…Hire against the needs and skills of the position you have open. Fit matters a lot in smaller environments especially, but I get leery when fit leads too much of the decision-making process. You could have divergent politics, hobbies, drinking habits. They might even wear baggy jeans instead of hipster “skinny”, but the candidate might be able to crush it when it comes to channel development, coding, etc. You let fit lead too much of that process and you miss out on good talent.
John, as @JLM:disqus might say, I agree with you more than you agree with yourself!
Whoa, the disqus format has changed. Not sure if I like it yet or not.1) Don’t know if it is its own topic, but the importance of avoiding groupthink. It is too easy to hire “everyone like me,” when contrarian viewpoints and cultures are crucial to innovative thought and success.2) Hire the mindset, not the skill set. E.g. I always hired engineers, i.e. a personality and a way of thinking, not a “developer” or “administrator”, which implied a certain skill. I always wanted people who could figure out how to solve the next problem far more than experts in today’s problems, which will definitely change by tomorrow.
#2 is interesting although I don’t think it is an either/or choice, The ‘mindset’ is part of the ‘skillset’.Hired a young rockstar-in-the-making UX person to partner with me to design workflow for a personal project. That balance of perspective, thinking and with UX ‘prior and current art’ knowledge is the magic formula.
Good point. I didn’t make clear that I don’t want mindset instead of experience, I want both. But mindset has always been far more important to me.How did you find your rockstar-in-the-making?
Luck. Personal referrals.In NYC, the big interactive agencies are a goldmine for UX and graphic designers. There are super talented people doing freelance work who have amazing perspective.
Nothing like luck!Good point; I have a good friend who was one of the founders of an agency in NYC, he is brilliant and knows everyone. I will use him for referrals next time. Great suggestion!
what’s the single most thing that stood out in their design process arnold?
For UX designers…we talk in wireframes and prior art.Question: How can we design a hoover state to create a Pinterest type choice of lists with favorites on a web service? The wire will tell you whether you have something/someone.For designers…if they think like mobile designers even on web services then I feel comfortable. Reduction as a design element to me is key.These of course are simply my biases.
thanks.this is a great video (see preview): https://peepcode.com/produc… well worth the 12 bucks
Great points. Thanks!See yesterdays post on the new disqus. Lots of feeddback in the comments
Great topic. I’m particularly fascinated with the screening/evaluation process. It’s amazing how heavily people rely on interviews when there are so many more tools available: skills/knowledge tests, work samples, mock presentations, reference checks/assessments, etc., Sometimes you need to search for new talent in unknown pools and this process is critical. Some good examples on how people do this for sales jobs, tech jobs, customer service jobs, etc., would be very interesting.
Also, it would be great to hear some contemplation on the value of using the phrase “human capital” when we’re talking about our people. Maybe Jerry Colonna would weigh in on this one?I think we lose something when we describe people as capital, or assets…
Hah, I’ve not considered that one as closely, maybe because I grew up with it. It sounds hopelessly old fashioned!Resources can at least seem alive, i.e. “natural resources,” or even have a human quality, such as being resourceful. Agree, though: we’re not really “resources”.
Great point!I struggled with what to call this series. I initially called it Talent. But i dont like that much either.Team and people are better. But not perfect.Ideas anyone?
Ha — that was my first thought.
A bit off beat.. but I like thinking of it as ‘the orchestra’.Getting the right players (not necessary the best ones) where everyone’s contribution is second to that team…. playing for a conductor they believe in..And, of course..it’s always good to remember that the conductor of an orchestra never makes a sound.. 🙂
moneyball for startups.
aggregation of talent?assembling the dream team?your own personal avengers?duck duck hire?thundercats, ho!this short and random list has been brought to you by my morning coffee
The human connection
My context is from a large company standpoint, not startup; that said I like Human Capital because the VAST majority of hiring management I have and do work with do not value the hiring process, like it literally was “capital”. “Capital” gives it the credibility of being the true investment it is…nothing illustrates this more than the pain of a bad hire/[email protected]:disqus – you can likely appreciate my mantra, “hiring would be easy if not for the people involved”
Ha! Yes!One of the most demanding parts of my job — except in the case of any clients that may be reading this — is managing the client! Fortunately, I thrive on challenge. ;)People don’t always have an appreciation for the people management aspect of hiring/recruiting — managing hiring managers, managing candidates — and it doesn’t necessarily stop when the hire is completed. Sometimes months later I am still consulting on the transition process — and not because of a poor hire. I don’t really think of the job being done until a year after hire.Great point by the way –> “Capital” gives it the credibility of being the true investment it is…
The Human Factor
i particularly liked the use of the phrase. it didn’t tip-top around what it is.most of the system is dehumanizing. that should change.
Agree! …bums me out to alk about people as ‘resources’ ..yuk
Funny, I didn’t think of it in that way…When I hear ‘human capital’ it actually evokes great value and worth in my mind.
It’s funny how terminology hits us all differently. My own reaction is to see capital and assets as inanimate, as stuff. It’s easier for me to own them and move them around.People not so much. We’re so much more complicated, and valuable.
Personally, I like it as an overview term. The necessity (and value) of capital in itself has never been questioned or overlooked. I think it is language that speaks to people who “get” the value of capital and may not automatically translate this to the critical value of the “human factor” in business.
If I were a crotchety 19th century socialist I’d point out that people who “get” the value of capital already have an overview term: labor. But I’m not a crotchety 19th century socialist 😉
Well, you coulda fooled me. This whole time I’ve been thinking you were a crotchety 19th century socialist.”Labor” or “personnel” are expenses on the P&L (even if you call it human capital for that matter) whereas capital is an asset. I’ve seen the difference between companies that think of their employees as an expense — especially in my early career in compensation management — and those that think of their employees as an asset. Semantics? Maybe. But language does influence thinking.
nothing wrong with them, they had utopian ideals missing today…
Between 1947 and 1979, the years of strong unions, healthy social security, the GI bill, and government investment in infrastructure etc., US productivity rose by 119% and the income of the bottom fifth rose by 122%. As neoliberalism took hold over the next 30 years, productivity rose by 80% and the income of the bottom fifth fell by 4% (the income of the top 1% rose by 270%).Perhaps they were more sane than utopian.
that is the 20th centuery =P. Probably a better example is that the 19th century brought us changes in art and science, and laid the groundwork for the 20th century’s struggles and solutions.I do wonder if the craziness of the 20th century will make the 21st a more reflective time period.
Well yes, but I’d argue the influence 19th century socialism continued right into the post war era.If anything it’s less reflective and more reactive. Pity.
Retaining the talents is another big pain (talent or wise thing I would like to hear.Retaining your little cubs (the lions and tigers) when the FB hunters are around with their monstrous offers….hope will cover a good discussion topic.
Ooh. That is an added post. Same with asking people to leave. This topic is getting longer and longer
“what does it take to get fired?’ used to be my favourite question as a new exec in a startup….
One of the most interesting things in business is developing loyalty. Longevity of employees.Why does someone follow you from company to company?Would you do the same thing?
Also part of this conversation is the community/ecosystem environment you’re in. That’s a big variable factor in how you approach recruiting and human capital. Whether you’re in the Valley, NYC, Toronto, Austin or London, your recruitment approach will vary widely.I also think of the 3 phases: Recruit – Retain – Retrain.You need to keep your recruitment funnel filled-up, your employees satisfied, and you need to keep them growing, learning and out-doing what they did yesterday.
You bridge the other topic of importance which is where to put people,My perspective as you know is that online communities are grounded at street level.If I lived in the middle of America and had a community based solution that touched the mass market on the ground, I would put the community manager right here.
That’s a whole new topic (or post). Which functions to keep at head office & which ones to have locally.
Or….first steps to build a community and an environment for engagement. Same thing in context.
I Love the way how you choose this topic. Crowdsourcing Demand in action. Imagine that applied in politics, education, commerce…
Walk the walk if you are going to talk the talk
There was a long walk to Simplicity, but we are almost there.
Fred, I’d be most interested to hear your take (or founders’ takes) on hiring non-traditional skill sets for startup roles. You hear a lot of people say that startups just need people that can get the job done but you also hear a fair amount of folks saying that startups don’t need generalists or someone that can “just do anything” – they need people who can fulfill specific roles and responsibilities. I think that’s a tough tension and one that makes the hiring/job-seeking process that much harder. I think there are a lot of square pegs that can actually fill the round holes.
Jobs was always saying A people only want to work with other A people.This is not only very hard in finding them but also limiting too.If your team is strong enough you can hire B+ and turn them into A people. I always felt it was more efficient and much better for the company to be able to produce your own talent.It’s like having a great minor league system where you have a lot of talent always percolating on the back burner.
Some would argue if you can turn someone into an ‘A’, they were always an ‘A’. 🙂
No question.I’ve seen it in myself. Sometimes a dud but in the right place can hit a few long balls.Hiring well has always been a great mystery to me.
I would say that almost everyone is an A — somewhere. Maybe not on your team. Performance is not a fixed attribute, like having blue eyes..The “A Player” mythology risks abdicating some of a manager’s responsibility to choose appropriately skilled people who fit into the culture, and then actually managing them.
I think A = attitude.Some people can manage a great attitude in most environments.While many others come alive in a few.That’s when they become ‘A’.My $0.02
Totally agree. That’s why I love hiring young people with great attitudes. You can’t really say they’re As because the don’t have the skills yet, but boy do they learn quickly and take off!
Actually A refers to Abilities primarily. Either they can or can’t do the job. Either they know something or don’t. Either they can or can’t learn it. Either they can or don’t want to adapt. etc..You can start with a set of assumptions that they will, but those that can’t are the B.
Ah. This is a much longer discussion.There’s a fine line in my view. When you get into the zone of ‘either they can or can’t learn it, can or can’t adapt’ – I feel you are heading into the attitude zone.One of the interesting observations from Mihaly Csikszentmihalyi’s thesis on ‘flow’ and mastery is that key part of experiencing flow is not necessary your ability but your belief in your ability.When you hear it/read it first, it might sound like you are deluding yourself.. but he’s really making a deeper point. Our insides shape our outsides.Our attitudes shape our abilities.
Funny I brought up the A & B people hires below. Great minds think alike!
In Job’s biography, he goes back to that point many times.
I am really looking forward to this series.
I’m guessing one of those guest posts will be our resident recruiter, Donna, and I can’t wait for that one! This will be a great series.
Thanks @ShanaC:disqus and @aaronklein:disqus . You give a girl a lot to live up to.
Hmmm… an invitation to the White House or to do a guest post on AVC? Which would be more exciting?
Clearly AVC. No question.
Any way to accelerate this 🙂 we are on the process of hiring up and this has even a challenging process!
I want someone out there to talk to me about Gen Y. I swear I’m so frustrated at times with the overall sense of entitlement. I keep interviewing Juniors with 6 month experience and all seems great. Then it comes down to the negotiations. All of a sudden it’s as if they are CEO’s with 20 yrs experience. Half the time i’m pretty sure we are negotiating with their parents. Or they come in and expect to be in corporate strategy meetings…..
Lol. Where do you find them? They are bluffing, trust me. Don’t give in. Offer them what you think is fair, not what they think they want.
if ever. you know me — how likely is someone who is unproven and jr. able to negotiate? Once you prove yourself — hey make sure you get what you contribute and deserve.
Ys have a different attitude to work/life balance than Xs or Boomers, and yes, something of a sense of entitlement, but I’ve found that they’re great workers so long as you keep them interested. When they’re no longer interested they leave, which I think is far better than having them die on the vine.As for the negotiations, I find a healthy dose of reality works wonders – they pretty quickly figure out that you’re not their parents, and they aren’t going to get everything they want.Have you ever thought of rotating the good ones through your corporate strategy meetings?
“they pretty quickly figure out that you’re not their parents” ^10 Word.
lol yep they do
We are a small company so everyone gets involved internally — but whether or not an intern or Junior gets to come to a Sr. Executive client meeting — it’s rare (although we will try and get them to come through the excuse of taking notes etc.)
Gen Y, always trying to steal our thunder. 😉
we’ve been planning lots of stuff on our own because of the getting the job issues/getting into college issues. We don’t have 20 years of experience, but we want to make up the rest fast, and we know the things we are experienced in are the things people worry about when it comes to online stuff.
I have had exactly the opposite experience as it relates to negotiations.I always just ask them — what do you think I should pay you?I have never paid anyone as little as they respond.I always pay them enough to rent an apartment and to have a decent existence because I feel like I own their problems.I recently hired a videographer who I think could be the next Spielberg. For twice what he was willing to work for.He still hasn’t learned to tuck his shirt in or comb his hair but he can run that camera and edit that film..
– When and how to use outsourcing and remote development options.
I hope that your post on “the importance of culture and fit” will actually be about the importance of avoiding/limiting culture and fit as hiring qualifications. As a startup you are already excluding people from your talent pool- people who want to get paid next week, people who want to go home at 6 (or even 5) PM, people who want health insurance in many cases- why would you further limit your pool to “people who spent their Friday nights in college the same way I did” ? Maybe you could mention the case of Google’s “strong no hires” as well.
So glad you’re writing about this topic. Looking forward to ensuing conversation.Disqus bug: Couldn’t comment from my Nexus One…native kybd wouldn’t come up when I clicked into comment form field.
Corporate Culture for startups and small business is very important. One hire can destroy that culture. Hire carefully – even when you desperately need someone. [I have written a lot about hiring: http://radinfo.blogspot.com…]
This is going to be great for two sides. Obviously those looking to higher talent, and for that talent to know what good startups are looking for in their employees.
would it be possible to leave behind the topic-title “human capital” … it feels bad … and wrong … and … just plain yuck
My two suggestions:1) Include a post about the appropriate times to hire people in certain roles, e.g. after engineering should come sales, then marketing, then B.D. etc.2) Make sure one of the posts is done by Grimlock (preferably not the post mentioned in number 1).
Very much looking forward to the series Fred and interested to note the focus of the comments so far have all been from the employers’ perspective.There is, I believe, a big series of questions to consider in terms of what moral responsibility one has in treatment of and the giving of feedback to prospective employees – especially in a world of increasing youth unemployment. Furthermore, the way candidates are treated can have a significant effect on the way your business is perceivedConcomitant with that is a personal bugbear about the tension between declarations of people being the most important part of a business and the outsourcing of the recruitment process to third parties whose drivers may be different from yours. It would be interesting to hear your guests’ views on such things.
Fred – Can you also add (in this series or separately) a post (or a few) about some of the legal issues associated with hiring. Probably a good guest post from a lawyer friend — but, specific issues around immigration, non-competes, non-solicits, etc. (ie. land mines to avoid)
This is a great topic and I’m tuning in for every episode!
Fred, you’re not tackling the real issues most CEOs face — when things don’t work out. How to let people go. How to know when someone is not working out. How one person not working out affects the wider team.Come on, these are the real issues. The hiring part is trivial in comparison.
Paul, check out Ben Horowitz’s post on the firing issue if you have not seen yet. Think he does a great job. Hope it helps.Firing an Executive: http://bhorowitz.com/2011/0…Demoting a Loyal Friend: http://bhorowitz.com/2012/0…
Agree with you more than you agree with yourself.As a young military officer, I thought of myself as a real badass — a few ribbons, a Ranger tab, shiny jump wings and the confidence of a survivor. Oh, I was quite full of myself.How we can allow 23 year old kids to do those kind of things is beyond comprehension. Now.And, then, I got Notification Officer duty stateside. I had to go tell a young soldier’s Mom and Dad that he was dead.You memorize a little ditty — “On behalf of the President of the United States and the Secretary of Defense, I regret to inform you…..”That, my friend, is a lot scarier bit of duty than jumping out of airplanes or dodging bullets.Your soul goes MIA for a few days after that when you completely wreck someone’s whole world and all you can come up with is — “…I regret to inform you…”When you are wrecking people’s lives — even when they deserve it — you have to summon up your humanity.I personally suck at it. And therefore I have tried to be better at hiring.But YOU are completely right, that is the real core issue.
I am already predicting that this will be a superb series. I think one point to keep in mind when hiring is the technical diversity issue. In other words, having people from different technical backgrounds (sometimes extremely different) brings many unexpected benefits to the workplace. The cultural fit is also a super important one and usually I find that in small intimate workplace it is always good to get the opinion of current employees.
It’s like a family, but you get to choose.
Awesome. I am really looking forward to this series.
This is a great set of topics. I have come to believe that human resource processes is the most important operational process in a company; more important than how you finance your company; more important than the actual opportunity you are chasing, or the product you are building..I look forward to reading your opinion on this.
Very excited to read more about this topic…One of the most unique things I’ve ever heard about hiring was in Brent Constantz entrepreneurial thoughts podcast. He referenced using a practice he learned from Scott McNealy saying:”We would go and interview dozens and dozens of people and in every interview we would ask the candidate who the most talented person in their field was that they’d come across. And every time we would go find the person they referenced and interview them and repeat the process until everyone was giving us the same names.”
This is exactly the process that the military uses to make one off teams of raiders and special operations.This is why Seal Team 6 is the best — at every position they have THE guy who is the best in all the teams for that position. And they are very, very, very good.Best tactics guy, best weapons guy, best explosives guy, best commo guy, best marksman guy, best hand to hand guy, best directing fire support guy, best language guy, best interrogator, best water swimmer/boats guy, best airborne delivery guy, etc. etc. etc.The funny thing about elite units is that the officers never, ever raise their voices. Because everybody knows their individual job better than the officers ever could.
There’s a post — or a book — in how folks in these circumstances are identified as best.
I wondering to what extent when hiring, employers ask to interview spouse or significant others to see if they are on board with the career, company or situation. Also to uncover any information that would indicate the person might be required to relocate as a result of a spouses job which could be in cases more valuable. Or has marital problems that could hamper performance.
This sounds like an awesome series! Having graduated from RU with a degree in psychology/sociology I have not had the most seamless transition into the business world. My skillset is far from what is expected of someone in a tech start-up, however I do fancy myself a decent judge of character. Just from this intro-post alone I have been given hope that my love of human behavior might be able to serve a role in this realm of life.Can’t wait for next monday
I have been given hope that my love of human behavior might be able to serve a role in this realm of life.Super important and the same has helped me a great deal over the years. Can’t stress this enough.
That is great news! Your words of support have been taken to heart and are much appreciated
Watch this:http://www.pbs.org/wgbh/pag…Although Rapaille (on a segment) is controversial, many of the things he says, in my experience, are dead on.http://en.wikipedia.org/wik…
Just read that intro and it definitely sounds controversial but brilliant none-the-less. This is on my info to-ingest list! Thanks a bunch
I view your psych training as good or better than an MBA.
If you are a start up that is funded by a Fred/USV, in other words, one of the 1% of 1%, then obviously the world from which you hire is totally different than the other 99.9%. When you talk about “A people” then the reality is that you are talking about “rock stars.”You want the best and the brightest obviously, but in all truthfulness you have to understand that you are most likely hiring folks who I would consider to be “hired guns.” They are polished, they have reputations and are well known, but their focus is to protect, maintain and build their reputation, they also come with their own “rolodex” and that is what Charlie Crystle mentions in his article as “politicking.”Its a seller’s market right now for VC funded start ups, and all the hired guns are focused on building and maintaining their “brand.”The issues faced by the 1% of the 1% are totally different than those start ups that are funded by lesser known VC’s or even worst yet, self funded. Ego management becomes a real issue as does getting down and dirty with the egos and letting them know that their brand will be tarnished if the start up as a whole doesn’t succeed.Leadership of egos requires someone like an Eisenhower….
I have been waiting for this! I know that I am supposed to be an expert on some aspects of this topic, but I sometimes wonder if this is an accurate description since I continue to learn so much with every assignment and from the people who call upon me for assistance.I expect to learn a lot about something I am passionate about from the collective wisdom of the AVC community as well as from you and the guest speakers you will invite. What I have learned from this community has already influenced my perspective of what I do and how I carry out my work.I love the variety of input you are offering as part of this series; some of the most valuable insight will come from the CEOs and other leaders in the startup ecosystem who have learned hard lessons, often the hard way — especially if this has translated into success in subsequent hiring.Thank you, Fred. I can’t wait!
Thanks for all 24 of you who upvoted my comment. And thanks, Fred, for taking it on. Honored and grateful for the mention in your article. This is gonna be a great series! Hurray for AVC.
If this is done well you should be able to crowd source a new startup focused on the recruitment space by the end of all of this commentary :).While the startup space is different than Fortune 1000 staffing in a number of ways, keep in mind that we are literally still using the same tools that we had at our disposal a decade ago to identify, source, interest, communicate with and recruit talent. Us corporate recruiting folks are still driving a car with square wheels. But I’m tryin’…
Great topic that is so critical, but so often given less focus and attention than it deserves. A few guest blogger ideas… from companies that seem to “get” talent as a strategic asset rather than a risk-reduction/admin function are Quirky.com, Hubspot and Evernote… and, of course, Netflix.On culture at Startups: http://bit.ly/KKrcIJOn hiring best practices for startups: http://bit.ly/K95PVL
One time I passed the talented Instrument player in the subway earning quarters. They are so talented, however they don’t have the right place to play to earn the equal money they should get. I can’t help to thinking of myself, having 18-year high level education, working for global business for 8 years, speaking three languages fluently, can not find a market place to realize my own value so far, so as my other talented MBA fellows.
I think it would be great to add cash and equity compensation as an important topic to address in this series.As both a hiring manager and an employee, compensation is a tremendously important tool to attract, retain and motivate employees. Some companies pay a lot of attention to this issue, others don’t, and many simply want to offer whatever seems to be ‘market.’How a company spends money should ultimately be a reflection of the things that are most critical to a company’s success. . . .people being number 1 on that list.
Human Capital is the biggest challenge facing startups I am involved with especially technical talentHighly recommend following Fred Wilson’s Series or reach and ask me and I can share what has worked and what has not worked. I approach this critical issue as I am a GM of an NBA Basketball Franchise trying to build a balanced team of Founder’s and first ten employees with startup experience across skill sets of Technical, Product Mgmt, Business Development, marketing.
That’s what I am complaining about Tafahurehwa Virimayi is not my user’s name to use for posting comments, i post as Garbex
i’d like to hear your and other experts’ thoughts on retention. recruitment is one part, but then keeping good people through the ups and downs of a startup’s rollercoaster ride is another. how do you keep challenging and rewarding people? how do you create an environment where there’s always upside to staying?
Hey Fred! This idea has been bouncing around my head for 18 months, and now its a minimum viable product (It’s called Mibrary). It’s something you and the AVC community can be proud of, because much of the confidence and knowledge gained to build this came from AVC, and it’s greatly appreciated.You’ll be able to best understand the idea within the context of MBA Mondays. Click on “Building a Board of Directors” section inside the link (http://mibrary.com/members/… These are my important thoughts from the “Board of Directors” series you posted over the last few weeks. In Mibrary, you collect important perspectives into a library as you come across interesting content – the Pinterest of important thoughts, per say (although, never built as an off-spin to their idea).Storyline 1: An entrepreneur may assemble a board of directors 3 months from now, 6 months from now, a year, or 3 years. Mibrary keeps the information ready for re-engaging, while they continue learning other subjects.Storyline 2: Another entrepreneur comes to them, and asks, “hey, I’m in the process of building a board of directors, any thoughts?”… he/she emails them a link to their mibrary section titled: building a board of directors…Storyline 3: In Mibrary, an entrepreneur searches for “building a board of directors” and gets recommendations from other’s Mibraries. Or one of the people he/she follows, posts an important thought on building a board of directors, which catches his/her attention and leads her to check out their full section on “Building a board of directors”You’ll be kept up to date as the product moves forward (next step validation through traction, then seed, then VC). For a glance at the longterm vision, check out the “Vision for Mibrary” section (http://mibrary.com/members/…. Thanks Fred.
The importance of attracting and hiring the right team and surrounding them with the right players is critical. I built a business model around this theory and created an outsourcing business (TWC Group) that had 120+ recruiters that went on-site to manage and scale these companies. We delivered the stragtegies, processes and people to venture backed companies. I sold the business to COMSYS/Manpower in 2007 and co-founded an early stage venture fund in 2006. I love the model so much that I have recently raised capital to re-launch a new brand new business called ORS Partners that will do this again.
Excellent read. Frameable. Your second to last point on the first page is golden.I believed a long time ago that if you don’t hire A people, you’re dead. A people hire other A people. B people hire C people, then you’re in trouble.
Really good postmortem here Charlie. Loved the honesty. Tons of respect for what you went through. Chief learning for me: if you know it ain’t right, stop at nothing to fix it. Never be held ransom by people or politics.
you will get another chance, that I am sure of.
Love the candor and insight – thanks for sharing.
all who read this article can tell it came from the heart and from real life experiences that real life hurt. I am also one to trust people from the get-go so reading about an experience like this really hit home for me. thank you very much for sharing!#avcftw
Thanks for linking that Charlie. That was a great.
Amongst all the vitamins, pain is the one that makes for the best growth catalyst.You, my friend, have paid full tuition for that vitamin.It is always difficult to swallow a 10-pound vitamin pill.There are folks who have Purple Hearts who have not endured such pain.Well played, not for the experience but the strength of the endurance.
I’ve made it no secret that at times your wisdom astounds me (and always impresses me).I see that this wisdom has been hard won. It is gold.
thanks for opening up with this Charlie
How did you write that 9 years ago??? #Nostradamus
As a business person, I feel such an emergency that the business world needs to create all kinds of market places to not only allow the right products and services to be known, discovered and utilized by more and more customers, just like a lot of startups; but also allow the right talents to be known, discovered, and be hired by the right company and right position in return those products, services, and talents can redeem their real values.
really great post – thanks for the story.
That was a really interesting article – thanks for sharing Charlie.
Identifying the “A Player” requires a Moneyball-type analysis. “A people hire A people…” has become a meme, I’m hearing it verbatim, often.I’m sure that you get the work behind this statement. Not everyone does, especially some of the young founders who are new to the hiring game.And also, when people hire badly, and then excuse it as “I got fooled by a C player,” yikes. We’ve all seen talented people who do great at one firm, and then fail at another. (I’ve been that person!) There’s no such thing as an A, B, or C player, in absolute terms.
A people are as apt to hire B people or C people as B people are as apt to hire C people.
more of a cliché. not sure who made it popular. jack welch maybe.
True that you can have bad hires as A people, but at least you know what you’re up against. If you’re in the B/C range, you have to work both on their skill level and on their fitting in. That’s more work & more uncertainty.
This is an excellent observation, Anne. The question is always fit. Always. Do these skills fit what we need? Does this person fit the culture we are building?For a startup, it is even more complicated because you are always dealing with the “already and the not yet” and these can be worlds apart. In making a hiring decision (especially at more senior levels) you are often straddling a chasm.
The first time I saw the terminology was in a couple of books by the Smarts (a father and son) on “topgrading,” which is basically an algorithimic — and very nuanced, and skilled — approach to hiring the right people for your team.Not everyone who has told me that “A Players hire A players, B players hire C players” actually has had the experience to understand the craft that allows you identify your ideal people…
oh right, yes, topgrading.Manager Tools podcast is good for this subject: http://www.manager-tools.com/ used to listen to it all the time.
sometimes i think recruiting ( which i only have a little experience with ) is not so much about finding ‘A’ people but finding people that can, and will be willing to play their ‘A’ game in your company.More credit has to be given to great bosses who motivate the team to play an A game together.
Are you saying that you view someone’s performance as an inherent characteristic? (i.e. I have green eyes.)(And on that note, I won’t be any kind of player today if I don’t sign off!)
I started with a team of 3 A people two years ago. Heavenly fit on paper, but in real time the ego issues of being too fabulous to do certain things made for splintering. Each one wanted to be top dog. BTW I was the one who brought the idea to the table. One team member remains, but is no longer team, since I do all the heavy lifting, so is contract labor.
Making the most of A players requires creating an environment that can attract and support them…and allow them to play as A’s.If someone is an A player they will eventually operate at this level in any environment once they get their grounding. But, if functioning at the A level requires too much work, will they stay? That is the question.
William,Give me someone with an attitude and a desire/opportunity….then the issue of “fitting in” is nothing more than “nurturing”Or if that is too maternal sounding then call it “investing time and effort.”You have commented numerous times about people who have worked for you, left, and would or have come back….you might not realize it but those relationships have as much to do with “nurturing” as they do respect….You hired a young man who posted on this very blog just a little while ago, I doubt you realize what you did to him by recognizing his talent/potential. That also makes you a nurturer….Of course if you want to be all straight laced about it, we can claim that you are an A person hiring another A person! 🙂 and a wink, wink……or you can claim to be “Super Fly” and the person who strikes fear in everyone’s heart when you walk into the office but I really doubt you could pull that one off. Personally, I never really got into the aspect of that routine where you had to fire people.I somehow just think that you get a thrill of finding that diamond in the rough; its okay, you are among friends! 🙂
Well said about Charlie. And don’t delay acting when you sense something isn’t right. The more you wait, the more difficult it becomes to fix it.
In a small team with no hierarchies, that’s typically not the issue. The issue I was describing is when “B” people are in charge of hiring others, and they tend to hire B or C.
That is a key responsibility of leadership, Ego management. Developing skilled EQ to harness big egos is essential. And big egos aren’t necessarily a bad thing.
Andy, agree, 100%I also think that this is what “A player” was originally meant to be shorthand for: willing/able to play an A game in your company. (With your participation, too.)
Early on I have to determine whether a company can truly attract (and retain) A players.Or what represents an A player for that environment.
Bullseye, a group of solo all stars will fall to a coordinated team of dedicated pros every time. Solo heroism doesn’t scale.
DonnaHiring senior people is one thing. We have histories out there and with some diligence we are very easy to vet.But for super talented younger people with maybe 3-5 years experience in design, UX, programming and a bunch of degrees, feeling comfortable about them is more a leap of faith than a dive into history.So looking forward to your input on this whole series.
What do you think is the right choice?
But it should be avoided. In my experience, A’s hiring B/C is less likely than B’s hiring B/C’s.
William,When we use such terms like “A People, B People” without defining what is meant by “A” then what we believe should be “avoided” and or “my experience” might just be a self fulfilling prophecy.You are an engineer and its obvious, my brother in law is an engineer also and there is no doubt, based upon my experiences with my brother in law, that in your case you are an A person and you want to hire A people and surround yourself with the best and the brightest.Personally, I consider myself a “B Person” on a good day….and I am not an engineer, but I want to surround myself with the best and the brightest also.When you actually sit down and look at most tech start ups you realize that you have a very concentrated skill set, engineering and coding. That skill set creates a shared mind set. When you start expanding into other skill sets you get other mind sets. I have yet to see an operations person, or production person who thought anyone in Accounting or Human Resources were worth a damn. I have also seen lots of operations and production people, and accounting/finance people who would never hire anyone whom they felt could threaten them and their position.At the end of the day we are individuals hiring individuals and hiring should never end with the acceptance of a job offer.Were your “A People” thus before you hired them? How did you determine that?
It just dawned on me…Think about Jeremy Lin, now before his latest stint with the Knicks, he was by most accounts a “C Person” I mean by the consensus of the league based upon the draft he didn’t rank, based upon his playing time up to this winter, he didn’t rank…But now by most accounts, for the time this winter, he is by far an A Person.I would love to have him on my team….
You are right, Arnold, about there being differences in hiring at different levels — and identifying senior candidates and gauging their track record is easier. Making the hiring decision is not.Key differences in hiring senior people and earlier career people are your retention expectations and concerns about scalability. I am a strong believer in hiring for retention and this frames a lot of what I say about recruiting/hiring.Recently, I’ve been looking at developer backgrounds which admittedly requires a different mindset than what I apply to executive hires. I am seeing a lot of developers with a series of 1 – 2 year stints (or even 6 months) and they have no problem landing the next role. Same track record for a CFO could be sketchy. Even at a startup, you typically don’t want to think that you are going to change out your senior people a year after hire — even though an eon of change can occur in a year. So you are hiring at this level asking different questions of yourself and the candidate.One thing I want to know regardless of the level is what motivates the person and you can look at their history to confirm this. This is key in vetting.
Oh, and, thank you, Arnold.I look forward to your input as well.
Then just assume it is wisdom, Charlie, even if you don’t know. You will most likely be right. Anyway, the rest of us will know for you. Keep talking, writing…
Performance is exactly what I meant.
I’m focusing on the performance aspect. I think the A folks have done some A things in their past and have the A potential. At least, that’s how I look at it. It’s also in the attitude. There’s an old belief I learned from someone at Deloitte where they have 3 hiring traits they don’t deviate from as basic tenets: a) smart, b) work hard, c) nice people. You can quickly eliminate some people that don’t seem to fit that mold.
But you can argue that Lin had A potential from the early days. Otherwise we wouldn’t have made it so far.
This gets to the crux of things — how good are you at identifying talent, talent spotting and also how good are you at filling the exact niche which needs to be filled?Jeremy Lin is not just a pretty good BB player, he was a freakin’ point guard who could score.Talent spotted for sure. But the RIGHT talent for the Knickerbockers at that instant in time.And the Coach had the wisdom to spot the talent and to point it in the right direction.Good CEOing?.
That could be one way of looking at it, and thus you could argue that the coach of the Knicks is one of the few A people in the league. Or you could just view it as being in the right place at the right time.Personally I think his injury and whether or not he comes back will tell us a lot about what type of person he is. Note, I said person not player and thus the focus is more on mind set (person) not skill set (player).
Sometimes the competitive advantage is in recognizing A player potential and getting those people before they are fully emerged as A players. Building the [email protected]:disqus seems to be a pro at this from some situations he has described.
Belief is a system of making things happen Charlie. Not delusion. I do this as well. I get stung but less more than more.
No, thank you :PAnd only with that mindset is it possible.
If one has one great success and then 10 failures what is the judgment on that performance?If one has 10 failures and then one great success what is the judgment on that performance?You have to live the life. You have to squeeze out the goodness.Both paths end with a bit of wisdom and bunch of scars.The answer is — it doesn’t matter..
thats an interesting problem to work though for sure.Often I think techies aren’t attracted to certain kinds of companies because the problems the companies are working on can’t be articulated as more interesting than what they are working on right now.or worse .. An unemployed friend & former coworker once told me that he was simply not interested in joining a startup to work on “yet another iphone app or web site”. He was holding out for an interesting and challenging embedded / electronics problem to work on.
Donna, Thank You!With my time on AVC I have tried to grasp exactly what it is tech start ups do and the best I can come up with is that they are building “prototypes” to get funding or to get traction and to do so before the funding runs out.If that is true then the reality is they are not companies with employees per se but rather small work groups of “hired guns” as I call them.In a start up your whole motivation is to bring in the best and the brightest, work them to death because you have a deadline you have to meet before you can do anything else.Everyone in the company knows the assignment is short term. Thus you hire the best and handcuff them to their job with a promise of a big payout. Of course in that situation a potential hired gun is going to look at the founders, their funding sources, seriously before they make any rash decisions. Lets be honest, as a hired gun you are locking yourself in for a period of time and its a crap shoot.What is going to happen at Facebook when it becomes a public traded company and all of the employees who were at one time there for the big payout all get paid?Then you have small companies that are growing fast, they don’t have the same incentives “hand cuffs” and their focus is more trying to find employees who will bring something to the table and make a long term commitment. Lets be honest, a 9 to 5 job just doesn’t have the same thrill to it nor the same payout but the job its self might have the same expectations? I want people who believe their job, their effort, and their involvement makes a difference.Organizations, offices, workplaces can all look like machines where one’s individual effort just seems to get lost in the mechanics.I think my perspective evolved from the fact that every year I was in school I found myself at either a new school or new town….even though my father was in the military we never lived in military housing. Thus you learn how to read “the terrain” real quick and you learn about people real quick or you are going to be miserable, friendless, and pretty much alone for that year.I spend a lot of time observing and studying…..and always searching for potential.
you wrote for BI
Agreed with you. But A doesn’t mean burn out. A means consistency…a keeper…a longer term player.
I think WE agree with each other more than WE agree with ourselves – a variation on @JLM73X famous line.You have a great memory indeed. Am definitely not the fear type person 🙂
William, I am sure that Engagio requires that you get the best and the brightest and have them hit the ground running like yesterday. Your world is totally different than mine and most everyone else has experiences someplace in between you and I.The concept that “A people” hire “A people”, smacks so much of elitism and a country club view of the world and that is one thing, THE one thing, that can set me off. Now, most hiring professionals spend 6 seconds reading a resume and honestly, I spend a lot more time than that reading resumes. I also read resumes with the old disclaimer on mutual funds, “Past Performance is no guarantee of future performance…” dancing around in my head the whole time I am reading resumes.I have been testing Indeed.com for the last 90 days to get a better grasp of talent and what everyone else is looking for. I figure if I have an idea of how it works from a job search perspective I can better understand it from a candidate search perspective later on. So far the results show me that we have a much bigger “pond” to fish in but we still have absolutely no idea what we are looking for in regards to job applicants. All I can assume is that we are using some sort of matrix of job titles and keywords to find candidatesWhew, the stories this little adventure has created! Lets just say that all the talk about “individualism” and “engagement” and “empowerment” really stops when it comes to hiring; it seems that at hiring we are looking for a formula that will identify the best candidate for us.
Hah, that’s a generous way of framing it.I think folks are A, B and C performers conditioned on the task they choose or are assigned. Everyone has strengths, it may not be what they are doing. Gifted leaders know how to draw out the best of each team member.
Groovy Donna, looking forward to learning more from you in the comments on this series.
Thanks, Mark.I will SO be here…I expect to learn a ton.
I agree here — I feel it’s more about presenting these “B-C” people with the right challenges and expectations.
“…but also allow the right talents to be known, discovered, and be hired by the right company and right position in return those products, services, and talents can redeem their real values.”I am intrigued by this idea. It’s something I think about a lot…well, between raising four kids and running a business.I am not necessarily asking you to share this here, but I wonder if this is something that you have ideas about?
I just feel sad that my fellows and myself are from foreign countries, came to the US for MBA, but can not find a right job realize our values. We knows deeply about our own business environments, cultural, and even global business, but can not find a place in the US to utilize our knowledges and experience.I have been brainstorming and plan to pitch to Linkedin for a new product, which could map the companies’ structures, and map who should people target to in the entire companies’ tree. Whether for candidates or for business approach, it would be so much easier, efficient to find the right people we should talk to and Inmail them directly.