Interview with Geoff Smart: CEO, Bestselling Author and Social Entrepreneur

Geoff Smart is the Chairman & Founder of ghSMART and one of the most recognized experts on hiring and performance. He’s also the bestselling author of Leadocracy: Hiring More Great Leaders (Like You) Into Government and Who: The A Method for Hiring. In my interview with Geoff, we explore his thoughts on hiring and talent.

Mike Goldman: In your book, Who: The A Method for Hiring, you make the case that effective hiring is a prerequisite for any successful business. Through your consulting work, you’ve seen all kinds of hiring practices. Where do most companies get it wrong? And, what advice would you give to a new leader who hasn’t been involved in hiring before?

Geoff Smart: Thanks Mike. The topic of hiring talented teams, is currently the #1 topic in business.  This is according to global surveys of what’s on the minds of CEOs by the Conference board, by Harvard Business School, and if you believe some of the business greats like Jim Collins, Richard Branson, and Google’s Eric Schmidt.

Our Who book is the #1 top seller on this topic of hiring talented teams.  We at ghSMART get asked to advise and speak with all sorts of leaders in all sorts of organizations—from Fortune 500 companies, to the biggest private equity firms, to Superintendents of school systems, to military leaders, to several heads of state.  We joke and say that our books and our consulting are only useful in organizations that have people in them! So what I’m about to tell you, I hope, is valuable to any of your readers.

Companies get hiring wrong because they skip steps.

There are 4 required steps in good hiring, if you want to achieve a 90% hiring success rate.  (This is better than the 50% hiring success rate that managers typically achieve).

  1. SCORECARD:  Leaders make hiring mistakes when they don’t give enough thought to the outcomes they want someone to achieve.  Leaders say things like “we need a marketing person” but what they fail to do is articulate the specific results that this person is expected to achieve.  This concept is not new.  My mentor, the great Peter Drucker, coined the term “management by objectives”—MBOs.  Our notion of scorecard is consistent with his observation that the best leaders are pretty darned clear on what they want to accomplish.  Skipping this step is not smart.  When the outcomes are not specified well, leaders blow it on the next 3 steps too.

  1. SOURCE:  If you have failed to do step #1, you are going to fail to source the right candidates.  So you’ll have a bunch of random candidates of various skill-levels and flavors and varieties without a sense of priority.

  1. SELECT:  Managers make hiring mistakes when they use bad interview approaches.  One type of bad interview approach is to ask candidate hypothetical questions.  For example, Mike, if I asked you, “How would you resolve a problem with a teammate?”  You might tell me a nice answer about how you would sit down with the person, listen to their side, collaboratively work out a set of possible solutions, select one together, then implement it.  Well, that’s nice.  But unfortunately, a half-century of research in the field of Industrial Psychology (the field in which I earned my Ph.D.) suggests that the way people answer hypothetical questions has very little predictive validity in helping you see how they will actually behave on the job.  So don’t ask people to speculate how they “would” do things.  That’s dumb.  A smarter approach is to conduct a series of interviews that are aimed at collecting real facts and data about what candidates actually have done.  Then do some reference interviews to verify the data.  Now you can predict with greater accuracy how somebody is likely to perform in a job, and make a great hiring decision.

  1. SELL:  Oh yeah, there is one more step.  Managers sometimes fail to sell a candidate on taking a job.  Here the manager puts so much work into finding great candidates, but then falls short of really closing the deal.  We have found that candidates say “yes” to jobs based on fit, freedom, family (being OK with their taking the job), fortune, and fun.  We call these the 5 Fs of selling.  You can use them as a checklist to make sure your ideal candidate says yes.

MG: Many leaders believe that it’s possible to have too many A-Players on their team. For example, they say “I can’t have all A-Players because they’d all want to get promoted and my business can’t support that”. What’s your reaction to this? Is there such a thing as too many A-Players?

GS: No, there is no such thing as too many A Players.  Let’s define what A Player means.  The way we define A Player is a person who performs in the top 10% relative to their peer group.  True, talented people generally want to get promoted.  But you can hire plenty of A Players who are happy to just do their job.  My CFO is an A Player; he has been in his job for 11 years.  My cleaning person is an A Player; she has been in that role for 5 years.  It’s all about fit to role and A Players are the ones who perform best.  As a manager, you are always “paying” for A talent, the big question is whether you are getting it.

MG: You and I are both believers in quickly removing underperformers (C-Players) from teams. While most leaders would agree with this view, actually removing underperforming employees is something most leaders have a hard time doing. Why do you think this is?

GS: It’s funny.  The less experienced the leader, the “harder” it is for them to remove a C Player.  Oh no, what if I hurt the other person’s feelings?  Oh no, if I have a person who is a bad fit for this job, I should probably try to coach them.  Oh no, I’m really conflict-avoidant, I shy away from having tough conversations with people.  These are the signs of a really inexperienced leader.

In contrast, the best, most experienced leaders I know are very quick to move somebody who is a bad fit for a role, into a role in which they are a better fit.  Like immediately.  Like, as in, right away.  They know that leaving the wrong person in a job is bad for the company, bad for the person, and bad for the team.  So the best leaders look at a person who is a poor fit and say, “What are you good at?  Let’s see if we can change your role so you can focus on what you are good at and what you love to do.”  And if the person is just not good at anything, or is unwilling to do a job they are good at, then the best leaders will give that person some time to look for another job outside of the company, then leave.  But with the best leaders, compared to the worst or most inexperienced leaders, there is not this habit of leaving poor-fit employees in place and wringing your hands and hoping their performance will suddenly improve.

MG: For most companies, reference checking a fairly low value tool. I love your TORC idea to dramatically improve the values companies get from reference checking. Can you briefly describe how it works?

GS: Sure.  I think typical reference checking is not super valuable.  Typical reference checking is to take the list of references that the candidate gives you, call them, and you don’t hear much useful info.

Here are 3 best practices to doing good reference interviews:

  1. You choose the people you want to talk with, based on hearing the names of bosses, peers, and subordinates during your interview with the candidate.  Ask the candidate, “I’d like to talk with some of these people you worked with.  What do you think Dina Moore will say were your biggest strengths and weaker areas in that job, when I talk with her?”  To give credit where it is due, the term TORC (Threat of Reference Check) was coined by my father, Brad Smart.  I love that term, because it is indeed the accountability that you are going to verify the candidate’s statements with references that compels them to tell more of the truth, whole truth, and nothing but the truth.  Just asking a candidate “what are your weaknesses” generally gets you the typical fake weaknesses like working too hard, perfection, and caring too much.

  1. Ask the candidate to set up the reference call, so you know the reference is willing to speak.

  1. After hearing generic strengths and risks, ask the reference giver some specific questions about the magnitude of a person’s strengths in an area on the scorecard.  For example, don’t just ask, “What are their strengths?”  Say, “Janet mentioned that you might say she was good at landing new customers.  How would you rate her performance in generating sales from new customers, relative to her peer group?”

MG: Most companies I work with believe finding the right people is their biggest challenge? What advice do you have about the most productive sourcing strategies for finding potential A-Players?

GS: This is the #1 question we get asked when we give keynote speeches.  “How to source great candidates?”  Mike, I have the very best solution to offer you.  It sounds extremely simple.  And it may be common knowledge, but I’m here to tell you it’s uncommon practice.  There are two ways to source great candidates.  This is from our personal experience of using these methods over the 20 years of growing our firm ghSMART, as well as from interviewing thousands of leaders and learning how they source their best talent.

  1. INTERNAL REFERRAL BONUS: Do your readers offer to pay a referral bonus to employees who refer other employees?  They should!  Typically, in a room full of business leaders, only 25% offer referral bonuses.  I ask those people to tell the other 75% of the leaders whether it’s a great policy or not.  They all emphatically insist that internal referrals are the best source of great candidates, and to pay for these referrals is how to generate a flow.

  1. EXTERNAL REFERRALS: I call this one the “List of 10.”  Say you want to hire a painter for your house.  You write out a scorecard—what you want them to do, what you want to pay, etc.  Then you make a list of 10 people you know whom you can call on to ask for referrals.  Ask them, “I want to hire a painter to paint my house; I want to spend X.  Do you know any great candidates?”  You will get plenty of great candidates.  Use the interview guides in the Who book, whittle down the candidate pool, and hire an a Player.

MG: In your new book, Power Score: Your Formula for Leadership Success, you say successful leadership starts with asking 3 key questions. Can you tell us briefly what those 3 questions are and why they’re important?

GS: Mike, this is huge news.  We studied 3,052 leaders and their teams, to search for the “Holy Grail” of leadership success.  We found it.

Leaders who were good at 3 things were TWENTY TIMES more likely to be successful than leaders who were not so good at these three things.

The 3 most important things for leadership success, and the questions that go along with them are:

  1. PRIORITIES:  Do we have the right priorities?  Only 24% of leaders are good at prioritizing.  Most just let too many priorities diffuse their team’s focus.

  1. WHO:  Do we have the right people, who are on the team?  Only 14% of leaders are good at hiring and developing talented teams.

  1. RELATIONSHIPS:  Do we have the right relationships to achieve our results?  47% of leaders are good at relationships.

If your team rates from 1-10 your priorities, who, and relationships, and you multiply the three numbers together, we call that your power score.  The average power score is around 400.  Teams that have a 729 power score or better are “running at full power.”  Teams that are running below 400 had better change something about their priorities, who, and relationships, if they are serious about achieving results!

To learn more about Dr. Smart, visit GeoffSmart.com.

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