Continuous Hiring: Trust….but verify (Part 2)

In the previous article in this series, we looked at the serious financial implications for early stage founders of mis-hiring a single Account Executive.

Specifically, how the typical time lag of 6 to 18 months before poor or middling performance becomes apparent can fatally damage your runway to the point where the resulting lack of commercial progress means you are unable to raise another round.

Selection failure

Despite the serious implications of mis-hiring commercial roles, the failure rate of Sales hires in early stage companies remains consistently high, with some of the most common reasons being the founder –

• Prioritised speed of hiring over thoroughness
• Outsourced much of the hiring and interview process to others
• Accepted the candidate’s (on paper) experience at face value
• Over-indexed on marquee company names on the candidate’s resume
• Was “dazzled” by the candidate’s confidence / charm / authority / air of credibility / apparent “culture fit”
• Succumbed to investor pressure to hire quickly (or to hire a specific candidate)
• Relied on “gut instinct” to make up for a lack of experience hiring commercial roles

Data collection

Putting together a Hiring Scorecard is the first step in minimising selection failure, because unlike a job description which lists the activities you want a candidate to do, a Hiring Scorecard defines what measurable outcomes a successful candidate needs to achieve, and more importantly how you want them achieved.

The how or behaviours you are looking for are critically important to define before you start meeting candidates because people whose behaviours do not fit the role, team or company ultimately fail.

A Hiring Scorecard also helps to minimise bias and subjectivity as it provides every interviewer with a clear definition of what they are required to test and a standardised way to collect and rate the data they have gathered about the candidate.

Going slow to go fast

Despite being a powerful tool to help minimise the chances of mis-hiring, the effectiveness of a Hiring Scorecard relies on it being paired with a structured interview process.

Early stage founders regularly trace the root cause of mis-hiring to not having put in enough time and effort to define a properly thought out interview process, opting instead for speed (which invariably involves cutting corners and an over-reliance on their or their team’s collective gut instinct).

Given the serious financial implications of mis-hiring commercial roles, spending a few days upfront putting together a Hiring Scorecard, defining how many interview stages there will be, what scorecard competencies will be tested at each stage and who will being doing the testing, not only minimises the financial risks of mis-hiring, it also saves that other rare and precious founder commodity – time.

A structured interview process

The combination of a Hiring Scorecard paired with a structured interview process allows founders to filter out unsuitable candidates much earlier in the hiring process, saving both time and effort for everyone involved.

This combination also helps introduce reliable and scalable hiring practices early, ensuring that as the company grows, hiring managers are not relying on self-taught or inconsistent approaches such as sticking with their favourite pet questions, aggressive or trick questioning, logic problems, hypothetical scenarios, irrelevant chit chat, constantly selling or any of the other myriad hiring “techniques” they may have picked up along the way.

Example: Hiring an Account Executive

For the remainder of this and the next two articles in this series we will demonstrate this combination in action by taking our example and pairing it with the following structured interview process –

1. Screening stage
2. Skills stage
3. Career deep dive stage
4. Simulated work exercise stage
5. References stage

These are the minimum number of stages founders should consider if they want to ensure they are gathering the right amount of data for an Account Executive hire.

As most hiring scorecards will have anywhere between 7 to 9 different skills and behaviours to test, it is unrealistic for all of them to be meaningfully covered in a single interview.

For stage 2 in particular, founders should break down the hiring scorecard into groups of 2 to 3 competencies and assign them to different interviewers to cover in a series of competency focused interviews.

To balance thoroughness with speed, founders should conduct the first interview of stage 2 focusing exclusively on the first competency in the Account Executive hiring scorecard – the candidate’s “Track record of sales success in an early stage start-up”.

If the candidate looks promising after this first skills interview, only then should they be moved forward in the hiring process to the remaining competency focused skills interviews.

We will cover the interviews that make up Stage 2 in more detail in the next article in this series.

For the remainder of this article we will look at Stage 1, the screening stage, in particular –

• The goal of the screening interview
• Who should conduct it
• The screening interview format and duration
• Behavioural questions to ask
• What to look out for in the candidate’s responses

Stage 1: Screening interview

Done well, a good screening interview acts as an effective filter for qualifying out unsuitable candidates as early as possible in the hiring process.

The aim of the screening interview is to check that the candidate’s expectations match the role you have on offer and to test their intrinsic motivation to join an early stage company like yours.

Candidate expectations may include things like compensation level, job title, span of responsibility, or pace of career progression. Depending on your jurisdiction, it may be possible to ask for things like their compensation expectations when they first apply for the role. If not, the example questions in Table 1 are designed to elicit their expectations so you can see if they are a match for the role you are offering.

Understanding a candidate’s intrinsic motivation to join an early stage company like yours is the other critically important goal of the screening interview.

Poor or middling performing Account Executives like to join earlier stage companies because there is usually less sales process, rigour and oversight to keep them in check and the relative lack of product & market maturity of an earlier stage company also offers them more ways to excuse any lack of results.

These types of candidates will often have multiple short stints at early stage companies, or if they’ve been fortunate enough to catch the tailwind of a breakout company that scaled significantly such that they stayed there for several years, they will usually have left at the point that that company’s sales organisation became more professionalised.

In the screening interview you are therefore looking for valid career reasons from the candidate as to why they want to leave their current role for a less commercially mature organisation where there will almost certainly be more obstacles for them to overcome in order to hit their quota.

Valid career reasons may include (but are not limited to), lack of professional development opportunities, limited or no career advancement opportunities, compensation requirements, wanting a faster paced, less hierarchical, less bureaucratic work environment, desire to be in an emerging or growing technology sector or redundancy.

Table 1 provides a template, questions and tips for conducting a screening interview.

Drilling down

The most important aspect of any interview is to always follow up every answer a candidate gives by drilling down further.

Effective questions to drill down begin with one of the following –

• What – e.g. What is an example of that? What did you do? What happened next? What did you do next? What was your role? What did your boss say? What were the results? What do you mean by that?
• How –g. How did you go about it? How did the team react? How did you deal with it? How did that feel? How so?
• Tell me more? – this is a simple and highly effective open ended question designed to get the candidate to elaborate and share more detail about their initial answer

Another way to think about drill down questions is that they help you to elicit real stories from candidates about the things they have actually done.

The resulting additional detail not only helps to determine the veracity of their answers, it also reveals more about the candidate’s behaviour and how they do things – behaviours you can then compare with your hiring scorecard.

Poor or middling performers generally struggle with drill down questions, often struggling to provide real examples or detailed rationale. As a result they will often resort to pivoting back to the achievements listed on their resume, going off on a tangent or trying to deflect the drill down question by answering a different question.

This is why it is very important to get into the habit of using a “What…”, “How…” or “Tell me more” follow up question after every answer.

The next stage

In the next article in this series we will look at how to use the hiring scorecard for the skills interviews that make up stage 2 of our structured interview process.

In the meantime, if you are interested in learning more about  conducting a screening interview, feel free to DM or email me at rav@crane.vc if you have any questions.