Podcast Summary: "Geoff Smart - Building the Perfect Team: The Power of WHO from New York Times Bestseller"
Podcast Information:
- Title: How I Built My Small Business
- Host: Anne McGinty
- Episode: Geoff Smart - Building the Perfect Team: The Power of WHO from New York Times Bestseller
- Release Date: January 21, 2025
- Guest: Dr. Jeff Smart, Chairman and Founder of GH Smart
Introduction to Dr. Jeff Smart
Anne McGinty welcomes Dr. Jeff Smart, a renowned expert in leadership and hiring strategies, to discuss the pivotal role of team building in scaling a business. Dr. Smart is the author of the New York Times bestseller "Who: The A Method for Hiring" and has successfully grown GH Smart to over $100 million in revenue. His expertise lies in helping companies make high-impact hiring and leadership decisions, making him a sought-after authority in the business world.
Dr. Smart's Journey and Expertise
Timestamp: [01:50 - 03:06]
Dr. Smart shares his background, highlighting his 30-year journey in industrial and organizational psychology, influenced by his parents' careers as a business psychologist and a speech pathologist. This foundation ignited his passion for enhancing workplace performance through effective talent management.
Dr. Jeff Smart: "If I didn't mention that, you know, all the remaining choices I made in my career, you'd miss the origin."
[02:04]
Common Hiring Mistakes in Businesses
Timestamp: [03:14 - 07:22]
Dr. Smart identifies the top three mistakes businesses make in hiring:
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Insufficient Time Allocation: Businesses often neglect dedicating enough time to the hiring process amidst juggling customers, products, and operations.
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Faulty Hiring Methods: Reliance on hypothetical interview questions ("How would you...") and gut instincts leads to poor hiring decisions. These methods fail to predict actual job performance.
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Intimidating Interview Techniques: Aggressive interviewing tactics, such as stressing candidates to simulate a challenging work environment, are ineffective and deter potential hires.
Dr. Jeff Smart: "Everybody's terrible at hiring. They do it wrong."
[04:17]
He underscores a staggering 50% error rate in hiring, emphasizing the need for structured, data-driven approaches to achieve up to a 90% success rate.
Strategies to Improve Hiring: The WHO Method
Timestamp: [07:31 - 14:35]
Dr. Smart introduces his proven four-step hiring methodology:
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Scorecard: Define clear criteria and outcomes for the role. This involves reflecting on the specific competencies and results expected from the candidate.
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Source: Build a diverse and robust pool of candidates through referrals and extensive sourcing, avoiding nepotism and favoritism.
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Select: Conduct structured, accountability-driven interviews that delve into candidates' past performances and use reference checks to validate their capabilities.
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Sell: Actively engage and attract top talent by showcasing the company's benefits and culture, persuading them to join despite being employed elsewhere.
Dr. Jeff Smart: "Success in hiring begins with scorecard."
[09:39]
He illustrates the effectiveness of this method through Rob Waldron's story, where reallocating 25% of time to hiring transformed his business from a $13 million valuation to a $5.2 billion enterprise.
Applicability Across Business Sizes and Industries
Timestamp: [14:35 - 22:33]
Dr. Smart affirms that the WHO methodology is scalable and effective for businesses of all sizes—from small startups to large corporations. He highlights its versatility in various sectors, including skilled trades and sales teams, by focusing on objective performance metrics and structured hiring practices.
Dr. Jeff Smart: "These four steps are useful for teeny tiny companies with like one person or the biggest companies in the world."
[16:34]
Managing Underperformers in Teams
Timestamp: [19:00 - 22:21]
Dr. Smart discusses his approach to handling underperforming employees:
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Honest Feedback: Provide clear, constructive feedback to help employees understand their performance gaps.
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Clear Expectations: Define specific performance criteria and steps for improvement.
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Support and Coaching: Offer resources and coaching to aid in their development.
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Timely Action: If improvement isn't seen, promptly remove toxic or consistently underperforming employees to maintain team morale and effectiveness.
Dr. Jeff Smart: "The number one regret, the last, I don't know, thousand managers we've advised or worked with will tell you is waiting too long to remove a low performing colleague."
[19:12]
Evolution of Hiring Methodology Over 30 Years
Timestamp: [22:33 - 24:41]
Dr. Smart reflects on two significant changes in his hiring approach:
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Globalization and Diversity: Emphasizing the importance of diverse teams with varied cultural and linguistic backgrounds to enhance innovation and market reach.
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Digital Technology: Leveraging digital platforms and AI-driven tools for sourcing and evaluating candidates more efficiently, a practice less prevalent 15 years ago.
Dr. Jeff Smart: "If we were to rewrite the book today, we would have more chapters on globalization and digital technology."
[24:33]
Scaling GH Smart to Over $110 Million
Timestamp: [24:41 - 30:44]
Dr. Smart details the strategic steps taken to scale GH Smart:
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Delegation: Transitioned operational leadership to Randy Street, allowing Dr. Smart to focus on strategic growth and vision.
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Hiring Excellence: Employed the WHO method to recruit top-tier talent, empowering team members to drive business expansion.
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Cultural Alignment: Maintained a positive and flexible company culture that fosters trust and autonomy among employees.
Dr. Jeff Smart: "Hire well and manage little and just think about that for a moment."
[28:26]
He credits this approach with enabling exponential growth and establishing GH Smart as a leader in leadership advisory services.
Trusting and Empowering Employees
Timestamp: [30:44 - 33:23]
Dr. Smart emphasizes the significance of trust and autonomy in the workplace. GH Smart’s "freedom culture," where employees have control over their time and methods, has been lauded for enhancing happiness and productivity.
Dr. Jeff Smart: "If you're super reliable, you're going to be golden."
[30:53]
This culture has not only improved employee satisfaction but also attracted top talent seeking flexible and supportive work environments.
Maintaining Company Culture During Rapid Growth
Timestamp: [33:16 - 36:02]
With GH Smart expanding to 185 employees across five countries, Dr. Smart outlines five key strategies to preserve company culture:
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Hiring for Cultural Fit: Select individuals who naturally align with the desired cultural values.
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Clear Expectations: Clearly communicate role expectations and acceptable behaviors.
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Incentive Alignment: Link rewards and bonuses to cultural and performance goals.
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Training: Provide continuous training to reinforce cultural values and practices.
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Structural Alignment: Design organizational structures that promote collaboration and cultural cohesion.
Dr. Jeff Smart: "If your culture stinks, you're probably not using one or more of those levers to get the culture that you want."
[33:32]
He also stresses the importance of swiftly removing toxic employees to maintain a healthy work environment.
Essential Skills for Aspiring Leaders
Timestamp: [36:12 - 41:03]
Dr. Smart identifies seven critical skills for emerging leaders, derived from his book "CEO Next Door" and other studies:
- Decisiveness: Ability to make quick, informed decisions.
- Adaptability: Flexibility to adjust to changing circumstances.
- Reliability: Consistently meeting commitments and building trust.
- Engaging for Impact: Persuasive communication to influence and lead teams.
- Prioritizing: Setting and focusing on the most important goals.
- Team Building: Assembling and nurturing effective teams.
- Relationship Management: Building relationships that drive shared goals and results.
Dr. Jeff Smart: "Proactively seek out mentors. It's free, it's not that scary."
[46:08]
He underscores the importance of mentorship, advising young professionals to seek guidance from experienced leaders to accelerate their career growth.
Personal Challenges and Lessons Learned
Timestamp: [41:47 - 45:58]
Dr. Smart candidly shares personal setbacks, including:
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Client Trust Issues: Disclosing sensitive information inadvertently damaged a high-stakes client relationship.
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Internal Conflicts: Yelling at a colleague led to their departure, teaching him the value of constructive feedback.
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Missed Opportunities: Early discontinuation of digital innovation efforts like Feedback Planet, a precursor to modern survey tools, remains a significant regret.
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Delayed Global Expansion: Slow international growth limited GH Smart’s global reach, though efforts are ongoing.
These experiences highlight the importance of maintaining integrity, fostering positive workplace relationships, embracing innovation, and seizing growth opportunities.
Advice to Younger Self and Future Leaders
Timestamp: [46:08 - 50:16]
Dr. Smart offers profound advice for young professionals:
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Pursue Challenging Paths: Engage in impactful and demanding endeavors early in your career to build a strong foundation.
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Embrace STEM: Encourage foundational skills in science, technology, engineering, and mathematics.
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Cultivate Mentorships: Actively seek out and build relationships with mentors to gain insights and advance your career.
Dr. Jeff Smart: "By the time you're 20, to have like five really good mentors who are very successful people in the field you want to be successful in is unbelievably positive return on investment of your time."
[46:08]
He emphasizes that mentorship can provide invaluable guidance, networking opportunities, and personal growth, significantly impacting long-term success.
Key Takeaways
Timestamp: [50:16 - End]
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Allocate Adequate Time to Hiring: Neglecting the hiring process can cripple business growth. Invest time to build a strong team.
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Implement Structured Hiring Methods: Adopt the WHO method—Scorecard, Source, Select, Sell—to enhance hiring success rates.
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Maintain Company Culture: Use strategic hiring, clear expectations, aligned incentives, continuous training, and cohesive structures to preserve and cultivate company culture.
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Develop Essential Leadership Skills: Focus on decisiveness, adaptability, reliability, persuasive communication, prioritizing, team building, and relationship management.
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Seek Mentorship: Proactively find mentors to guide your career and personal development.
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Embrace Challenges Early: Choose impactful and challenging career paths to build resilience and a strong professional foundation.
Dr. Jeff Smart: "Challenging paths early help you unlock your full potential."
[52:42]
Conclusion
Dr. Jeff Smart's insights underscore the critical importance of strategic hiring, effective team building, and maintaining a strong company culture to scale a business successfully. By implementing structured hiring processes and fostering a supportive work environment, businesses can achieve remarkable growth and sustainability. Additionally, aspiring leaders are encouraged to develop key skills and seek mentorship to navigate their professional journeys effectively.
For more in-depth strategies and practical advice, listeners are encouraged to explore Dr. Jeff Smart's books and GH Smart's resources.
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