Startup Execution, Startup Talent

What’s in a Name?

Shakespeare famously spoke through Juliet, asking “What’s in a name? … a rose by any other word would smell as sweet.” That’s true, as long as you know you are truly holding a blossoming rose (and not a seedling or a plant that has yet to flower).

Many startups bring on promising talent to run large portions of the business. Because cash is usually tight and equity pools are limited, founders scramble to offer compelling packages to attract top talent. One common “carrot” or concession offered during the interview cycle is a big fancy job title. The rationale is that, if you can’t increase the salary nor the stock options, then let the candidate take a VP or a Director title. It costs you nothing, so the prevailing logic goes.

Pay Me Later

But the reality is that job titles are not free — you eventually pay for it later. Founders should think carefully before doling out executive or senior job titles. Founders need to ensure that the candidate’s skills truly match the expectations of the senior job title. Multiple challenges can arise when an employee is over-titled, including:

  1. Insecurity that leads to defensiveness. Difficult personnel issues surface when it becomes apparent that the employee isn’t capable of playing the senior role. Employees who are overly hungry for a big job title usually have a hard time facing the facts if they aren’t meeting your expectations of the role. Their insecurity often takes over when you try to provide constructive feedback and they resist any notion that they aren’t truly VP or Director-level material.
  2. No room at the top. If the candidate is over-titled, eventually founders need to bring on a truly senior employee to take over. But if the current candidate already holds a VP title, then you are left with few options other than to bring in the new person as a Senior VP. Top-heavy small companies easily become unbalanced when they have too many generals and not enough infantry. You need a typical distribution of titles within a team to properly allocate work between leaders and staff. New investors will also question your management decision making when they see an unbalanced, top-heavy organization. In addition, if you bring in the next person at a higher title just because the current person is over-titled, you run into more problems with compensation. The new person will expect a salary and equity package that is commensurate with the higher title, further draining your limited resources.
  3. Low morale among the troops. The staff working for the over-titled executive will eventually recognize that the team leader isn’t meeting the expectations of the role. The front-line staff are often the first people in the company who recognize that the leader isn’t doing the job well. They won’t want to work for the person, which results in disunity and dysfunction. Their expectations put pressure on the founders to deal with the over-titled individual, creating a messy people issue to resolve.
  4. Can’t right-title. In many cases, the over-titled individual is a hard worker and a reasonable employee, just not at the title he/she currently holds. The right thing to do is to change the person’s title to one that more appropriately reflects their current capabilities and contributions. But just about everyone will see this as a demotion. Very few people are comfortable with being demoted, leading you right back to cleaning up a messy HR issue.

Because most people hate dealing with messy HR issues, I often see founders avoid the problem altogether. Avoiding the HR issue means your company will just limp along, under-performing along the way. Progress will slow, investors will sit on the fence or lose interest, and employees will get disillusioned.

Right Titles, Right Foundations

Occasionally, you’ll find a promising candidate with great potential. Chances are the candidate will have many options to choose from, forcing you to compete for their services. Don’t give in to the temptation to over-title the candidate in order to make your offer more attractive. Do talk about your solid HR practices and culture and how you want to provide many opportunities for employees leverage their preparation. Every team member wants to feel successful, so highlight the fact that success is likely when opportunities and preparation intersect. Bring the candidate in at a lower title — the right title — and offer regular feedback and coaching. If the candidate exceeds expectations of the lower title over a sustained period of time, promote them. This approach avoids the risk of over-titled employees. It also motivates the employee when they see their contributions being recognized and their career opportunities growing.

As I wrote in my posts on interviewing and finding the right candidates, hiring game changing employees has to become a strength of every startup. Employees are the foundation of your startup. It is important to align the job title with the candidate’s true capabilities and proven experience. Over-titling employees runs the risk of creating multiple layers of complex, messy problems. But rational, consistent and accurate mapping of roles and titles can form a solid foundation for you to grow your startup. Hire well and grow well!

 


Startup Execution, Startup Talent

Diamonds in the Rough

As I’ve written previously, every startup needs game changing players. You can hire them if you have a good interviewing process, know what to look for, and can offer a strong compensation package (cash + equity). Sadly, even if you have all of these, the ridiculously competitive job market (especially in areas such as the Bay Area, New York, and several other tech hot spots) may frustrate your ability to bring on ready-built veterans. In such cases, your only alternative is to hire candidates with raw talent and potential and then grow them in house.

Every owner of a fantasy football team would love to draft the top quarterback, top two running backs, and top three wide receivers in the league. But the realities of most leagues typically limit any one team to maybe two veterans with a proven history of production over several seasons of gameplay. The rest of the team must be built around role players and younger, unproven athletes.

The Veterans

In order to develop unproven players, founders must build an atmosphere and system that cultivates growth. Veterans who are chartered and able to develop the younger staff serve as the anchor of high-growth teams. These veteran leaders need to buy into the fact that a key part of their success depends on their ability to raise up their teammates. Team leads need to balance the efficiency of doing tasks on their own versus delegating, coaching, training and empowering others to take ownership for key parts of the project or team.

The Rookies

Once you have the veterans in place, you need to find the right rookies to add to the team. Take a moment to review my previous post on building a strong interviewing process. As I’ve previously written, success is usually the combination of preparation and opportunity. Younger-in-career candidates haven’t have many opportunities, so your goal in the interview process is to identify candidates that have great potential because they’ve done the necessary preparation. You should focus on:

  1. Strong technical ability. Front-line staff typically need to demonstrate very strong technical capability in the role they are hired to play. Make sure your interview process goes the extra mile to identify raw technical talent with real-world “show me” demonstrations and tests rather than “tell me” stories.
  2. Executive abilities. Don’t ignore analytical abilities, methodical / structured problem solving, organization skills, communication skills, and attention to detail. These are common requirements on a resume, but rarely assessed in an interview.
  3. Emotional intelligence. Daniel Goleman published a landmark work where he asserted that a person’s Emotional Intelligence can matter more their Intelligence Quotient. Because of the demands of a high-growth team environment, candidates need to have some basic emotional intelligence in order to thrive. Goleman identifies five key components of emotional intelligence: self-awareness, self-regulation, internal motivation, empathy, and social skills. Make sure your interview team evaluates these aspects of every candidate.
  4. Humility. Finally, each member of a fast-paced, growing team needs to be willing to learn from others and not be afraid of owning up to any mistakes. Humility is essential, as individuals with a modest view of their own importance tend to be better learners and less defensive when mistakes are made.

The Farm System

Once you have the veterans and the rookies lined up, you need to create a system that provides a safe environment to grow. Give people challenges that stretch their abilities. Capable, well-prepared team members really need just one successful project to go from a novice to a strong apprentice. Two successful projects will often be enough to forge a journeyman from a strong apprentice.

When you task a team with multiple stretch goals, regular check-ins become very important. Create daily and weekly processes that have your veterans providing regular inspection, direction and coaching of younger team members. Agile development processes are very well-suited to rapidly develop younger team members.

Keep in mind that, as you challenge teams with stretch goals, failure is not just possible, but likely. Mistakes will be made. Bugs will always plague software development. But failure shouldn’t be fatal. When honest mistakes happen, make sure the team knows where they went wrong and are diligent about recovering from the error. Hopefully, your regular check-ins will uncover the mistake before the freight train flies off the rails or the project goes completely sideways. Plan for problems because, with fast moving young teams, mistakes will happen.

On the flip side, when a young team or team member executes the stretch assignment well, be quick to recognize and reward the achievement. Correct mistakes privately, but praise successes publicly. If the young team member strings together a couple of wins in a row over two to three months, find a way to recognize that with a small bonus. If the team member continues the winning streak over two to three quarters, step up the recognition with either a larger bonus or a small bump in compensation (cash or equity). If the team member demonstrates consistent growth for about a year, recognize it with either a job title progression (e.g., Associate 3 to Associate 4), or a promotion (e.g., Associate 4 to Senior Associate 1).

Creating Brilliance

Building a strong team from a pool of raw talent is very difficult. Few people do it well — even fewer can do it at startup speed. But most startups need to learn how to do this as it’s not likely they will be able to always fill their roles with seasoned veterans. You basically need to find diamonds in the rough, then cut and polish the raw stones to brilliance. With a few strong veterans, a pool of promising rookies, and the right farm system, success with younger teams becomes not just possible, but likely.


Startup Execution, Startup Talent

Nailing Your Fantasy Draft

Fantasy sports leagues have flourished in the last 10 years. I love football, but since I lack the size and skill to play in the NFL, I have to settle for vicarious competition in a fantasy football league. Anyone who does well in their fantasy league knows that the key to success is having the right players on your team. Getting the right players is all about nailing your draft picks and paying attention when quality players are available.

Your startup is no different. In my experience, getting the right players is so important that I have devoted several other articles focused on this topic, from building the right interview processes and skills to the role of game changing team members. Here, I have a few recommendations that will help you identify quality team members.

Show, Don’t Tell

Most interviewers are satisfied if the candidate tells you about their past exploits. It’s certainly important to get an overview of the candidate’s past work, but it’s vital to have the candidate show you their skills. This “show me” philosophy is the foundation for the hackathon, a popular Silicon Valley recruiting tool (which was immortalized in an over-dramatized scene in The Social Network). Although not as glamorous as Hollywood would have us believe, this “show me” exercise is still a very important part of identifying true skill. If you are hiring a pro services consultant, have them write a SOW. If you are hiring a programmer, ask them to write some code as part of the interview. If you don’t have time to create a programming exercise relevant to your startup, at least use a generic problem from a site like CodingBat.com.

My fourth startup was heavily dependent on a team of very strong Cisco network engineers. Every engineer we brought in for an onsite interview had to demonstrate their hands-on knowledge with real Cisco gear. We set up lab with a laptop connected to a Cisco firewall, which was then connected to a server. We then asked the candidate to configure a pinhole and NAT for web traffic from the client to the server. This is a simple exercise that a seasoned Cisco command line engineer should be able to do in 10-15 minutes. The candidate was provided with access to Cisco manuals if needed. I was shocked how many Cisco Certified Network Professionals (CCNPs) — a mid-level certification that can be roughly described as a “Bachelor’s degree” in Cisco technology — were unable to complete this simple exercise, even after laboring for over an hour.

If they succeeded, we gave them a second, more difficult exercise. We asked them to configure two separate VLANs on a switch intended for a production network and demonstrate bi-directional traffic flow through a layer-3 router. We purposely emphasized that this was for a production network and asked them to harden the configuration, but did not provide specific requirements. A mid-level engineer typically configures the VLANs in 10-20 minutes and says they are finished. But a senior engineer would take another 15-20 minutes to disable and assign unused ports to an unused VLAN, avoid using VLAN 1, configure user-facing ports as non-trunking, optimize spanning tree, configure VTP, configure switch security (such as BPDU Guard, Root Guard, DHCP Snooping, port security, etc.), harden access to the device, and many other configuration best practices. We basically designed a test that gave us insight into the depth and breadth of the network engineer’s skill. The more the candidate paid attention to these details, the more eager we were to hire them.

Not Just for Propeller Heads

These “show me” exercises aren’t limited to technical job roles. If you are hiring a product marketing or product management person, ask them to build a part of a go-to-market plan for a product. You could ask the candidate to put together one of the following components of a product go-to-market plan:

  1. Build out a launch plan for a new product
    1. Distribution and channel
    2. Marketing and communications
    3. Competitive positioning
    4. Sales tools
    5. Training and mentoring
    6. Customer success plan
    7. Target customers / segmentation
    8. Geographic expansion
  2. Build a model that segments a market for some common product of your choice (e.g., bicycles, refrigerators, cars, grocery bags, etc.)
    1. Target customers
    2. Product categorization / sub-categorization
    3. Value proposition
    4. Use cases
    5. Competitors

If you are hiring an accountant or a bookkeeper, create a fictitious business in QuickBooks (or your preferred accounting system) with a few customers and some high-cost inventory items. Then ask the candidate to create a sales order with multiple inventory items, convert items that shipped to an invoice, create an AR aging report, and receive payment from the customer. Take note of how much audit data (like product serial numbers, shipment tracking numbers, payment reference numbers, etc.) they capture in the transactions they record. Did the candidate know to ask about class tracking (a somewhat more advanced feature)? There are plenty of scenarios you can create to determine a candidate’s depth and breadth of knowledge. If you don’t have a strong accounting or finance lead to help you design the test, then at least use an off-the-shelf test from a web site like Brainbench.com.

How, Not What

Many people have had opportunities to serve in certain roles. Whether they have experience serving in the role is just one criteria. A smooth talking candidate will paint a rosy picture of their past roles with little verifiable information. Don’t just ask what their responsibilities were, but dig into how they did it. What was their approach? What process did they use? How did they govern and control the process? Did they create the process or did they just follow a process someone else created? Did they profit off of someone else’s groundwork? In a startup environment, the groundwork is rarely laid so the candidate will have to lay it themselves. Were they successful in growing sales because the market was growing and they happened to catch a rising wave? Or were they successful in growing sales in a down market? Dig into details. Don’t be afraid to spend 20+ minutes getting into the weeds with the candidate on how they did their job. I’ve met many, many candidates with Superman resumes, but Clark Kent abilities. It takes time and determination to separate the chaff from the wheat.

Stud or Dud?

Getting the right players on your fantasy football team requires knowledge and hard work. Every team needs a few star players that you pick in the first, second or third round of your draft. In fantasy sports, identifying the best players is somewhat easier because you have access to the player’s performance and stats from previous years. In addition, ESPN and other sports outlets provide a ton of advice on who to pick and when to pick them. However, in the world of startups, we don’t have access to stats or sports analysts who provide specific advice on individual players. Hopefully the suggestions above help you hire a few game-changing players for your team. In a future article, I’ll provide some suggestions for finding unproven talent to fill out the rest of your team.


Startup Execution, Startup Talent

Interviewing – The Unheralded Startup Skill

Java. HTML5. MongoDB. Agile/Scrum. REST/JSON. Kubernetes. AWS. Product management. GAAP/financial accounting. Channel development. Interviewing.

Wait. Interviewing?!? Yes, interviewing skills!

Startups hunger for talent. A company’s ability to source and hire skilled employees determines its ability to grow. A quick search on any job board produces long lists of openings for web developers, DevOps engineers, cloud architects, mobile app developers, product managers, sales engineers, business development managers, accountants, and more. Building a robust hiring engine is an often overlooked but essential part of growing a startup.

How Borderline Employees Get Hired

A growing startup devotes a significant amount of time and effort to interviewing candidates to fill open positions. However, very few companies spend any time to establishing a structured interview methodology. In the rush to get back to their primary job of writing code, chasing a deal, or closing the books, startups assume employees know how to interview prospective employees. The hiring team rarely does any advance planning to prepare for candidates coming onsite for an interview. Interviewers are left with no guidance and no structure. The interview may cover overlapping topics and/or miss several key topics, resulting in a disjointed and disorganized process. One of a startup’s most important operational decisions is left to an unstructured and subjective sense of whether the interviewers generally liked the candidate. This mistake allows a higher percentage of borderline candidates to join the team.

Borderline employees dilute the effectiveness and productivity of the entire team. Senior employees invest one of the company’s most precious assets – time – into training the new employee and getting them up to speed. Team leads, managers, and peers spend multiple man months on a new hire, only to be disappointed in the borderline employee’s output. Companies can minimize these headaches by adopting the simple, structured interview guidelines below.

Behavioral >> Situational

First, every person on the interview team must understand how to conduct a behavioral instead of a situational interview. Many great articles are available that dig into the definition of these terms and provide detailed explanations of why behavioral questions are better than situational. In short, behavioral interviewing asks the candidate to describe how they handled a past experience. In contrast, situational interviewing asks the candidate to make a choice among several options presented.

Behavioral interviews are built on the premise that past history is the best predictor of future behavior. A behavioral question or request tends to start with “Tell me about a time where you (faced a certain problem)”. A situational question tends to resemble “What would you do if you (had to choose between option A and option B)?” Behavioral questions tend to extract a better picture of a candidate’s ability to execute. A person who is good at interviewing will often be able to guess what the situational question is driving at and will give you the response you wanted to hear. For example, “Tell me about a time where you faced an unreasonable deadline” will provide good insight into how the candidate handles pressure. In contrast, “What would you do if you had to work late to meet a deadline?” usually results in the candidate responding that they’ll just suck it up and work longer hours. Whether the candidate really will do that isn’t truly known, but it’s probably the safest response during an interview. Clearly, behavioral interviewing produces better results. Train your interview team to use behavioral questioning. You can use the attached one-page document to provide an overview of behavioral vs. situational interviewing.

The Cookbook

The hiring engine usually includes some version of the four phases above. I’ll assume that you have a recruiter sourcing candidates and doing the first round of filtering. The recruiter’s job should be to provide a short list of candidates that have a good chance of being a fit. Recruiters rarely have the technical experience to effectively validate the skills of all the roles they have to fill, but a seasoned recruiter should be very good at filtering. Filtering generally involves some combination of the following:

  • Ensuring the candidate’s goals align with the company’s opportunity
  • Evaluating the candidate’s communication skills
  • Determining at a high-level if the candidate’s past roles provide the foundation to perform the responsibilities of the position
  • Assessing logistical fit with the role (timeframe, travel expectations, work location, relocation, etc.)
  • Performing initial due diligence (work authorization status, work location, compensation and title expectations, readiness to make a change, etc.)
  • Providing background information about the company
  • Selling the role
  • When at the appropriate stage in the process, performing final due diligence (background checks, reference checks, verification of degrees/certifications, etc.)

Once a candidate clears the filtering process, the interview team validates the candidate’s fit. I generally ask the interview team to cover the following topics: cultural fit, manageability, and technical skill. One person (usually the recruiter) covers the cultural fit. The hiring manager should cover manageability and may cover some technical topics. A technical lead and one or more colleagues should cover technical skills.

To help guide your behavioral interviewing, I’ve put together the following list of cultural and manageability questions, along with some simple forms you can use guide your questions and capture the candidate’s responses:

Cultural Interview Questions

(downloadable form here, 148K)

  1. Why are you looking for another job?
  2. What are you looking for in a job? What are your goals?
  3. Describe a time where you worked on a project with an unreasonable deadline.
  4. Describe a time where you worked in an environment with very little structure.
  5. Describe a time where you were asked to work on something you were unfamiliar with.
  6. Describe a time where you had to take a risk.
  7. Describe a time where you had to move faster than you were prepared to move.
  8. Describe a time where you had to choose between working on an immediate task vs. meeting the needs of another person.
  9. Describe a time where you were faced with choosing between individual achievement and team achievement.
  10. Describe a time where you had to work within an established process that you disagreed with.
  11. Describe your three biggest strengths and your three biggest weaknesses.

Manageability Interview Questions

(downloadable form here, 149K)

  1. Describe a time where you had a conflict with a co-worker.
  2. Describe a time where you disagreed with the decision of a subordinate.
  3. Describe a time where you had a difference of opinion with a co-worker.
  4. Describe a time where you worked with an under-performing co-worker.
  5. Describe a time where you were asked to work on something you did not enjoy.
  6. Describe a time where you disagreed with the direction of a project or with a decision made by management.
  7. Describe a time where you didn’t feel heard.

Technical Interviews

Because of the broad range of technical topics possible, it’s beyond the scope of this article to provide a sample list of technical questions. However, one thing I strongly believe in during the interview process is asking candidates to produce some work related to what the role needs. If you are trying to hire a programmer, then ask them to write some code that solves a problem. A simple Google search on “Java programming problem and solution” will provide a number of useful web resources such as CodingBat.com. If the candidate needs strong written communication skills, a Google search on “writing tests” will point you to resources such as IELTS academic writing practice tests. Asking them to produce some real work products in your office often separates someone with true skill from someone who is just buzzword-compliant or who merely holds paper credentials without real capabilities. In some cases, online tools or tests (such as those found on BrainBench.com and PanPowered.com) can supplement the interview process and reduce the time or effort needed to vet a candidate’s technical skills.

Wrap-Up

Before the candidate leaves, either the recruiter or the hiring manager should conduct a wrap up conversation. Topics to cover may include:

  1. How does the candidate feel the day went?
  2. What do they like about the company?
  3. What concerns do they have about the company?
  4. What do they like about the role?
  5. What concerns do they have about the role?
  6. How does this opportunity align with their goals and objectives?
  7. What other opportunities are the candidate currently considering?
  8. What considerations would lead the candidate to choose this opportunity over other opportunities in play?
  9. What questions does the candidate still have about the company or the opportunity?
  10. When would the candidate look to make a decision about their next role?

 

At the end of the interview, the interview team should reconvene and summarize their portion of the interview and provide their individual recommendation (hire, don’t hire, need more information to decide). Finally, the recruiter should collect the actual notes from each member of the interview team. Having the notes will help justify any decisions not to hire the candidate in the unlikely event that the candidate accuses the company of bias and/or threatens legal action.

If the interview team recommends hiring the candidate, the hiring manager and/or executive take responsibility to assemble a compelling job offer. The closing team should use the candidate’s responses to the wrap-up questions above to help close the deal.

Hopefully, this framework provides the foundation for you to set up a robust hiring engine so you can find the most qualified candidates to grow your company.