Who’s The Boss

Over the past few weeks I have built a recruiting framework which I believe will help to streamline recruiting efforts for OpenView and our portfolio companies. Much of this framework is based on what I have learned through my own recruitment experience, but I have taken several cues from the book Who: The A Method for Hiring by Geoff Smart and Randy Street. If you haven’t already read it, I recommend picking up a copy. In Who, Smart and Street outline the recruitment process and give their recommendations for hiring A-Players in 4 steps: create a Scorecard, Source, Select, and Sell. It is an interesting book filled with humorous anecdotes and success stories from CEOs who have already implemented the process.

 

One important thing I took away from Who is just how huge the cost of a mis-hire can be. The book states that a hiring mistake typically costs about 15x the candidate’s salary, so a single mistake on hiring a $100,000 employee can cost a company $1.5 million and countless wasted hours. This would be a huge expense for any company, but for an expansion stage company a mis-hire could be even more detrimental. So what are some steps you can take to dramatically reduce the occurrence of mis-hires at your company?

The first step may be to hire a Recruiting Analyst or Resourcer, which is what OpenView has done. Since errors in recruitment can result in such a huge cost, and a successful hire can be so beneficial, it makes sense to hire someone whose full-time responsibility is to manage the process. My second piece of advice is to make sure you know what you are looking for before you begin a search. If you feel that you know what skills are required, but haven’t committed them to paper, you may make the mistake of choosing a candidate based on qualifications which are irrelevant to the position you are looking to fill. Make a list of your “Must Haves” and your “Would Like to Haves”, and stick to them. Lastly, perform several informal reference checks. The growth venture capital community is relatively small, and chances are high that you or one of your colleagues knows someone who has worked with the candidate being considered. Rather than only checking the candidate’s pre-approved formal references, do some digging and talk with other people who have worked with him/her. In all likelihood, the information you will learn about a candidate in informal reference checks will be some of the most beneficial to your hiring decision.