Hire Slow – Lead Better – Fire Fast
Hire Slow. Hiring effectively is very difficult. I have seen statistics indicating that only about 50% of hires are successful, and my own experience with companies agrees with that. The cost of bad hires, though, is immense. At the executive level, the cost can easily run into the six figures. And the indirect costs can be even greater, in terms of lost productivity, negative impact on employee morale and productivity, disruption to projects, potential loss of customers, brand weakening, and even litigation costs. The stakes are very high, so here are a few tips to help you get it right:
· Read Topgrading, by Bradford Smart. This 1999 book is the bible of hiring, in my opinion. Smart advocates a slow, very detailed hiring process designed to hire “A” players, i.e., those who would be recognized as in the top 10% of candidates available for the position. They must be continuously assessed to ensure that you are always striving for that state of having your positions filled with “A” players. This, of course, means that there will be turnover, but this is the type of turnover you want. Modest turnover that leaves your company with a better team than before.
· Hire a good recruiter - either internal or outsourced. And I go with retained versus contingency recruiters. Simply put, they are more effective. While more expensive, you get what you pay for.
· Demand a large sample of candidates - don’t let the first good person you interview drive your process.
· Interview, interview, interview - expose the candidate to as many people internally as you can and insist on detailed feedback.
· Be rigorous on candidates - although I am not a fan of the trick questions beloved by tech companies, I do believe the process is a stress test that the candidate must pass.
· Pay healthy, market rate compensation and benefits - you underpay and you are sure to receive underperformance.
Lead Better. It is important to recognize that a team member's performance is a product of many things. Sure, their talents, skills, capabilities, attitude…but also your leadership. Have you or their direct managers provided a clear roadmap for success? Have you equipped them with the necessary tools? Have you incentivized them effectively? Have you worked with them when they stumbled to ensure they are “failing forward”? Have you communicated with them so they know what they are doing right and where they can improve?
Fire Fast. I am a huge fan of working to “rehabilitate” where a team member’s performance has fallen off. But I believe in clear, crisp, corrective plans so that either the performance improves as soon as possible, or the person is let go.
I can’t tell you the number of times a CEO has told me how unhappy they are with a team member’s performance and how they have tried to correct the situation. And then they look at me, and I respond with the obvious, “Why are they still here?” They cringe and admit that they hate firing people. Well, I say, everyone hates firing people. Those are the worst days a business owner or CEO has. The ability, however, to walk into that flame, take the heat, and do what must be done separates the best CEOs and companies from the pack. When you reach the point where you must admit that the person is not a fit for your company and is not helping your mission, fire and fire fast. Equitably, humanely, and professionally, but fast. (This is with my lawyer hat on: always terminate with at least two people representing management. Never fire one-on-one, which leaves too much latitude for the terminated employee to start alleging things were said that only you can deny.)
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