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- [00:01]
A
I'm trying something new this week by releasing a shortened highlights episode alongside the full one. It's designed for those of you who may not have time to listen to the whole episode. Perfect for a quick commute or busy day, but to be honest, it's more work. And my ADD brain isn't entirely convinced this idea is worth continuing. But I wanted to experiment and see how it goes.
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How many classes in high school did you take on hiring Ann?
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Zero.
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And how about college?
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Zero.
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B
And like, okay, so it's nobody's fault that almost everybody is terrible at hiring result. We have a 50% error rate in hiring. If you survey your listeners and say, hey, just reflect for a moment on your last few hires who have been with you for, you know, over the last two, three years or so, how many of them would you say? You weren't surprised they performed as advertised and you're happy that you hired them? The number is 50%. It just is across regions, across sic codes, across industries. And what I learned from reading all the psychology stuff in my PhD program in psychology on this topic and then practicing it and refining it over the last three decades is you can achieve a 90% hiring success rate if you follow a couple of best practices. It's actually four best practices, but if you don't follow them, you're doomed to a 50% success rate. Stop chasing the what and really allocate more time to solving the who. Do what Rob Waldron did. So check this out. He was stuck at a $13 million valuation for his business. Not bad. He listened to someone in our company give a keynote speech about 10 years ago saying, stop chasing the what and really allocate more time to solving the who. So he said all he did to change his leadership approach, his management approach, was to go from spending less than 5% of his time on hiring and developing his teams to spending about a quarter of his time on it. So that's a lot of time. 25% of your time. That's a lot of time, right? And he said, all I did was really focus on what are the two or three key hires I need to be making right now? And rather than looking at one or two or three candidates, I'd look at dozens of candidates and I'd get referrals. And he practiced the four methods that you and I are definitely going to talk about. He followed the correct approach to hiring. He spent the right amount of time on it. And his $13 million business turned into 30 million, turned into 500 million, turned into a billion turned into a five, $5.2 billion business over a decade. And I said, well, come on, what else happened in the business? He said, I didn't do anything different other than change. From not really focusing on the talent part to really making it a major allocation of how I spend my time and then just getting the next two or three key hires right has made all the difference in the world. Okay, so here's what to do. You do these four things, and the four things are called scorecard, source, select, and sell. What are the outcomes you expect this person to achieve in this role? A big, big, big, big mistake entrepreneurs make. I'm talking to you and entrepreneur. Business starters out there is you hire your cousin to be head of marketing, and then, oh yeah, your next door neighbor is like your product person. Knock it off with the hiring the warm bodies who happen to be around you, okay? Knock it off with that. That is your business is too important to, to just hire whoever is just around you. Like, stop that. Get a huge pile of candidates that you're considering. That's like step two takes a candidate, like a finalist candidate, like someone you're pretty sure you want to hire. That's when you wheel out this heavy duty interview and you basically just walk them through each of the chapters of their career. And you talk about highlights and accomplishments. You talk about low points and things that didn't go well for each job they've had. You're asking them what were they hired to do? What did they accomplish they're most proud of? What were some examples of mistakes or things that didn't go well? Who did they work with? And this is a great one. Watch this. What was your boss's name in that job? And then they tell you. And then you like, show that, show them you're like writing the boss's name down. Ooh, you know, Susan Jackson. And then ask them to spell the boss's name. How do you spell Jackson? I. And they'll say, you know, J, A, C, K, S, O, N. And then write it down. Great. And then you say, oh, at some point in this process, we might ask for your help setting up some reference calls, if that's okay. And then the candidate says, like, yeah, that's fine. And then you say, great. When we talk with Susan Jackson, what's she going to say were your big strengths and weaknesses when you work together? And as entrepreneurs, we have to sell like heck to land the A caliber talent that you want to bring into your business? Because guess what? They're already gainfully employed Somewhere doing well, making money and making impact and treating their colleagues well somewhere else. So you have to really put the sell on them in order to get them to say yes to joining your smaller company. To me, it's all about getting the data of what they've actually accomplished and getting examples of it, getting the real numbers, verifying it with references. That's what good hiring looks like. It's great to give people very honest feedback, give them a lot of feedback, give them more feedback than they even want to hear so they really understand where they stand. Really be clear on expectations, really be clear on steps that they could do in order to perform at the target level. 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. And I'm telling you, if that person's also culturally toxic and is like being mean to people or mistreating juniors or you know, doing anything bad, that's like cultural deep, that is very, very costly. You gotta have those chats with the people. If there's like values abusers at your company, get them out pronto, pronto, pronto. Maybe not even a whole lot of coaching and feedback because it's just so costly to those around. Someone was talking about the difference between working in your business versus working on your business and a light bulb just went on and siren sounded and I was like, wait a second, I can work on the business without working in the business. You know, I was carrying a 20 client load. Like I was in it, in it, in it. And then I looked around in 09 and we all were like, okay, who wants to run this thing? I was like, I don't need to run this, like I'm a proud founder and sort of chairman here. But if someone else wants to step up and run it, like a show of hands. And so we picked Randy street, the co author on the who book. So we had worked really well together on the who book. And he is an engineer by training. He's a Harvard MBA. He worked at Bain for like 10 years. He ran a company, he had operating chops, as we would say, not just consulting skills. And so he became the president and managing partner in 2010 and he 10 axed the business over the next 10, 11 years. So I mean it wasn't like, how did I do? I picked Randy. Randy did it. I mean it was like literally like that simple. I would highly recommend to your listeners. Highly, highly, highly recommend. For gosh sake, find someone to Help run your business. Maybe it's a muscular CFO who could play the role of CEO. Maybe it's like you do what I did, you know, hire a president to run the day to day, run the, really run the business, run the meetings. A lot of small, medium businesses owners are like, oh, you know, no one. I wouldn't trust anyone else to run the business. And that's probably true because their hiring process stinks. They shouldn't trust other people to run their business. But if they improve their hiring process and they really find some excellent talent, for gosh sake, I shall now quote Warren Buffett who said, hire well and manage little. Don't micromanage your star performers or they will leave. But if you align on goals, you have a great culture. You're willing to delegate and let people have room to operate. You reward and incent when they really do well so they can share in the upside. You're good, you're going to be, you're going to be golden as a small business owner. You're going to find yourself suddenly a medium business owner. And spoiler alert. Freedom makes people happy in the workplace. When you have freedom to choose and you have control over your time, you're way happier than if you're living in a more coercive environment. We've written four books as a firm. We published, they were all bestsellers. We for sure should write a book on culture. We haven't yet, but I'll give you my secret sauce here. There are five things your listeners can do to manage their culture, to create the culture that they think is going to win the day. The five things are who you hire, clear expectations. Three is incentive alignment, which is like, are you developing your colleagues? Are you helping people learn and grow? That kind of thing, right? So you have to reward people for it. Training, Give folks training so they can know how to do whatever the key elements of your culture are. And then the last one I don't have a good name for. I call it like structures, but just the idea of like, who's meeting when, what's the org chart look like. It's also who you fire when we have fired people who weren't living our values. Although it's a sad day and we're like, oh man, you know, I wish we could have, you know, helped that person not be such a culture destroyer. But when we've done that over the years, the very next day, everybody sighs a big sigh of relief and you go, that was an important thing. That's a very important part of of building and sustaining your culture is taking out folks who are actively, you know, toxic in that culture. So I got seven things that matter. So leaders who really worked on being decisive, like make more decisions, not less. Make faster decisions, not slower. Working on being decisive, decision maker massively correlated with success as a business builder. So that was one. Two is a adaptability. So don't fall into the trap where you're just like, well, that's what I always did, you know. Meanwhile, market conditions have changed or probably product conditions have changed. Like being able to face reality and then adapt. That's the second thing. Third is reliability. If you say you're going to do something, like do it. We're huge in gh smart on. We start meetings weirdly on time, we end them on time. If we say we're going to do something two years from now, like, we do it. Like we're very, very reliable. And it creates trust. It creates just like a really high competence culture if you're super reliable. So that's the third one. The fourth one is E. Engaging for impact. So it's not good enough just to have the right answer as a leader. Having the right answer. Oh, congrats. Great. You have the right answer. You need to like persuade other people and influence and listen. And basically it's like persuasive communication was the. The fourth thing that matters. And it says learn skill. I mean, you can learn how to be a more persuasive communicator. So that's. Those are the four that came out of that study. Setting the right goals. Not too many goals, but just a small number of the right goals. I think that's basically the spirit of what good prioritization looks like as an entrepreneur. That's the P. The W is who's on your team. So back to the hiring and firing thing. Learn it. You can learn it. Read our books. Like, listen to this podcast. Like, you know, learning how to be good at hiring and firing to build talented teams. Super important skill to develop. And then R is relationships. It's like, how do you build relationships that are focused on achieving shared goals together? Like achieving results through your relationships is kind of like the third habit. And you put the three together, you're 20 times more likely to achieve your goals. I cannot believe what percent of high performing small business owners who turn into medium or big business owners? What percent of them cite having good mentors as like one of the most important things? Mentors were super important to me. Mentors are super important to people who build amazing things. Quickly. Yet I don't see even my own kids to the degree I think they should. I don't see young people proactively searching out mentors and kind of collecting mentors. So I'd see. I'd say that'd be like the last career strategy advices. It's free, it's not that scary. DM people on LinkedIn find out, get referred to. So and so freaking Steve Jobs called up the founder of Hewlett Packard of HP to get computer parts that he could like build something when he was 12. Like weirdly, people out there who get like a step function of success and you're like, how do they do that? They all have mentors giving them advice or intros or computer components as it turns out. So I'd say if you're young and you're listening to Ann's podcast, just think about what do you want to learn? Or what are some jobs or industries or types of roles that really sound interesting to you? Who do you know? And maybe you don't know anybody but like use the network you have to get to folks or just go Ahead and blind DM people on LinkedIn. Call them up, email them, you can figure out this stuff and try to recruit. I'd say 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.
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I'd love to hear your thoughts. Do you like and appreciate the highlights version or should I stick to full length episodes? Your feedback will help me decide if this format is a keeper. Thanks for being flexible as I try this out. Have a great day.