Are you Hiring Right for your Start-up

The biggest set-back for a start-up is getting a key hire wrong. And, in a start-up, a lot of roles are ‘key’ for the simple reason that there are no fall-back mechanisms or back-ups. In large Firms, the cost of a wrong hire could be 2-3 years of salary, but in a start-up, it could very well decide whether the start-up gets to the next stage of growth seamlessly or falters irretrievably.

Some founders and execs get this and make sure that there is a very strong process for at least a CXO hire. There are stories of how a founder spotted a terrific individual at a conference and wooed this person through multiple meetings, stretching sometimes over 6 months, before taking a call to hire this individual.

In this article, I would talk about conducting insightful interviews.

The ability to interview and select the best person for a role is the most important skill for a function head. If you can’t hire well and build a strong team, impatient stakeholders & recipients of service would want you out in no time. Start-ups cannot afford to forgive under-performing managers, and those that do forgive too often, very quickly end up under-performing themselves.

If you are a senior manager, there are two types of roles for which you would need to interview candidates – for roles in a domain that you understand deeply and for roles in domains that you do not necessarily understand deeply. You need to be effective in both situations. To be able to interview and evaluate candidates in multiple domains, you need to have a decent knowledge of every domain (marketing, operations, HR, analytics, product etc) and insights on what differentiates an outstanding candidate in these functions from mediocre individuals.

First things first:

• You have a huge problem if you are not clear what specifically you are looking for. Therefore, first of all figure out the 3-4 things that are critical to success in a role. Examples:
  • Problem solving, Initiative and being Hands-on
  • Deep knowledge of brand building with a working knowledge of digital marketing
  • Has deep insights and execution excellence in process training for a large and distributed blue-collared workforce
• Ask the right questions that can help you figure out whether a person is outstanding at these, and has a proven track record.
• Look for any fatal flaws, shortcomings or value alignment issues 

To evaluate if a person has “Problem Solving skills”, you might start by asking:

“What were two of the most complex/difficult problems you have solved where your personal contribution was very significant?”

…and follow it up with…

• Can you give an example where you broke up a complex problem into smaller problems in a systematic way?
• Can you describe a situation where you independently researched for information and solutions to issues
• Can you give an example where you asked insightful questions when not sure of what the problem was or to gain more information, and in the process, helped define the problem more accurately or shape the solution” 

To evaluate if a person takes “Initiative”, you might start by asking:

“Can you talk of some examples where you proactively addressed a situation or problem to the delight of a key stakeholder of yours, even though it wasn’t explicitly expected of you”

…and follow it up with…

• Can you describe a situation where you did not wait until every bit of information was available, and made progress by simplifying the problem through logical approximations/assumptions?
• Can you talk about a situation where you personally solved a difficult problem despite little or no support from anyone-else
• Can you give examples where you carried out important tasks and attained closures without follow-up?” 

To evaluate if a person is “Hands-on”, you might start by asking:

“Can you describe a process that was completely broke that you personally fixed?”, or, “If there is a process break down, what would you do?”, or, “What are the problems that you delegate to your direct reports, and what are the ones that you personally deal with?”

…and follow up each of these with some more probing questions…

• Based on your experience, what differentiates a leader who is great at execution from a leader that is mediocre at it?
• How do you deal with escalations in some of the things that your direct report is managing? 

Ask questions that test for thought process as much as correctness of a response. Look for intellectual integrity and honesty

The thought process is particularly important. In addition look for intellectual integrity - can the candidate easily say, “This is an interesting perspective. I had never thought about this”, or “I didn’t know this”.

Some Examples:

A problem for the role of the Head of Analytics that simultaneously evaluates thought process, intellectual integrity and intellectual capacity: 

The accuracy of a test to detect a disease is 99% - which means that 1 in a 100 times, even if one did not suffer from the disease the test would say that the individual suffered from the disease. If a person suffered from the disease, the test would show with 100% accuracy that the person suffered from the disease. Now you go through the test and the test says you suffer from the disease. The question is, “Do you need to be worried and what is the probability that you suffer from the disease?”

The obvious answer that comes to mind is, “you need to be worried. And, you have a very high probability – in fact 99% - that you suffer from the disease”. But the fact is that this question cannot be answered unless some additional information is furnished (this additional information is the prevalence of this disease in the population – for example 1 in 10,000 people in the population suffers from this disease). Now, it is interesting to see how the candidate responds. Especially if he does not figure out what that additional information is. He could then state the obvious answer (99%) or if he thinks there is a catch, try and ensnare you in some specious arguments wrapped in jargon. It would be interesting to see how he responds to the follow up question, “is there some additional information you may need”.

If the candidate gets the right answer (with the additional information) it would be, “if the test says I suffer from the disease, the probability that I really suffer from the disease is actually very low (0.01)”. Counter-intuitive but true because the prevalence of the disease in the population is a hundred times smaller than the test accuracy!

A question for the role of the Head of Marketing that simultaneously evaluates thought process, intellectual integrity and intellectual capacity: 

What are the drivers of customer satisfaction in your business? How do you measure customer satisfaction and what are your views on NPS?

Keep some general principles in mind: 

• Never ask leading questions. They get you nowhere – “Can you handle negative feedback?”, “Are you strategic?”
• Do not hesitate to check for “fundamentals” even if you are interviewing a candidate for a senior position. No start-up can afford leaders that have forgotten fundamentals.
• Follow up responses with “Why” multiple times. It tests for clarity of thought.
• Follow up responses with “How” multiple times. It tests for appreciation of process, depth, analytical skills and an ability to anticipate execution issues.
• Start with an open ended question and gradually go deeper based on the responses
• If you find someone isn’t good at something, shift gears and move on quickly
• Look for the motive for change. And, why does she want to join your company? This is especially important for senior roles.
• Does the candidate ask some intelligent questions and have a point of view? Is she willing to debate you?
• Does this person demonstrate a track record of stability and resilience (willingness to dig in and get things done when the going gets tough) 

Interviewing and recruiting is one of the most important things one does as a manager, and much more so in a start-up. One can get much better at it if one pays attention to some of these basic principles and prepares.