who no. 1 problem solve your · and heads of state. with randy street, he is the new york times...

16
SOLVE YOUR NO. 1 PROBLEM WHO FOR FINANCIAL PROFESSIONAL USE ONLY

Upload: others

Post on 08-Jul-2020

2 views

Category:

Documents


0 download

TRANSCRIPT

SOLVE YOUR NO. 1 PROBLEMWHO

FOR FINANCIAL PROFESSIONAL USE ONLY

FOR FINANCIAL PROFESSIONAL USE ONLY

ghSMART is the premier leadership advisory firm to CEOs, investors and boards. Drawing on two decades of

experience with over 17,000 senior executives, ghSMART brings the best thinking and highest service experience to

help clients achieve their top leadership priorities, including CEO succession, M&A diligence and integration, top

talent selection and development and senior team effectiveness.

ABOUT ghSMART

GEOFF SMART

Geoff Smart is the No. 1 thought leader on the No. 1 topic in business. He is chairman and founder

of ghSMART, where his clients include Fortune 500 CEOs and boards, billionaire entrepreneurs

and heads of state. With Randy Street, he is the New York Times bestselling author of

Who: The A Method for Hiring (Ballantine, 2008). He is also the author of Leadocracy (Greenleaf,

2012) and the co-author of the Wall Street Journal bestseller Power Score: Your Formula for

Leadership Success (Random House, 2015). Geoff is the founder of SMARTKids Leadership

Program™, which provides mentoring and scholarships to students with leadership potential

from low-income communities, and he also founded The Leaders Initiative™ to inspire private

sector leaders to work in government. Geoff loves giving talks on the topic of hiring and leading

talented teams to audiences globally.

RANDY STREET

Randy Street is the managing partner of ghSMART. He has advised boards, CEOs and executive

teams for over 25 years on topics ranging from CEO succession to management due diligence,

and he regularly helps them select and develop teams that win. In collaboration with Geoff

Smart, Randy co-authored Who: The A Method for Hiring, and he is also the co-author of Power

Score: Your Formula for Leadership Success. Prior to joining ghSMART, Randy was the EVP of

sales and marketing and EVP of corporate development and strategy for EzGov, a software

firm that was named the fastest growing company in Atlanta during his tenure. Before that,

Randy was a strategy consultant with Bain & Company. He is also a popular keynote speaker

with a dynamic and energetic style that routinely generates the highest audience satisfaction

scores possible.

JENNIFER STURMAN

Jennifer Sturman is a principal at ghSMART, where she advises public and private equity boards,

investors and executives on CEO and executive assessment, leadership development, talent

planning and team effectiveness. Prior to joining ghSMART, Jennifer held senior strategy and

corporate development roles at Amazon and Time Warner after serving as a strategy consultant

at McKinsey & Company. She began her career as a financial analyst in M&A at Goldman Sachs.

© 2017 by ghSMART & Company, Inc. All rights reserved.

2

“ The most important decisions that businesspeople make are not what decisions, but who decisions.”

—Jim Collins, Good to Great

WHO: SOLVE YOUR NO. 1 PROBLEM 3

1 Our research shows that hiring mistakes typically cost 15x an employee’s base salary in hard costs and productivity loss.

4 FOR FINANCIAL PROFESSIONAL USE ONLY

Too many leaders spend too much time and energy chasing solutions to the what problems

that plague their business—problems with what strategies they choose, what products

they sell and what processes they use. Yet all that focus on what problems seems only to

breed more of them.

Who, on the other hand, is where the magic begins. Who refers to the people you put in place to make the what decisions. Who is providing your clients with differentiated service and flawless execution? Who is winning new clients in your competitive marketplace? Who is running the analytics that lead to client insights? Without the right who, you’ll never have the right what—but with the right who, the right what will follow, and you will be better positioned to deliver differentiated service and performance to your clients.

So how do you solve for who? How do you hire people who not only get the job done, they consistently hit it out of the park? And how do you avoid the costly hiring mistakes that soak up valuable resources and yield nothing but headaches in return?1

ghSMART has spent thousands of hours interviewing hundreds of CEOs and conducted more than 17,000 assessments for C-suite hiring decisions. Along the way, it identified the four most common drivers of hiring failures. Who mistakes happen when managers:

+ Are unclear about what is needed in a job

+ Have a weak flow of candidates

+ Don’t trust their ability to pick out the right candidate from a group of similar-looking candidates

+ Lose candidates they want

The good news is that each of these mistakes is preventable. There is a simple, practical and effective method for making better who decisions—and you’ll find that by adopting this method, you can experience greater professional success while enjoying your work more, and you’ll have more time and energy for what matters most to you.

WHO IS YOUR NO. 1 PROBLEM. NOT WHAT.

WHO: SOLVE YOUR NO. 1 PROBLEM 5

08 THE PSYCHOLOGICAL & PERSONALITY TESTERAllowing psychological tests to decide for you. In ghSMART’s experience, these tests are easy to fake and not predictive of success in the job.

04 THE SUITORSelling candidates on the opportunity rather than rigorously interviewing them.

03 THE PROSECUTORAttempting to trip candidates with trick questions and logic problems (e.g., the classic “Why are manhole covers round?”).

02 THE SPONGEAllowing everybody to interview a candidate, often in a “round-robin” format where everybody asks similar questions.

01 THE ART CRITICRelying on gut instinct to make a snap judgment about a person.

07 THE CHATTERBOXEngaging in small talk and conversation while neglecting the interview itself.

06 THE ANIMAL LOVERAsking pet questions that lack relevance or any scientific basis (e.g., “If you were a can of Campbell’s soup, what flavor would you be?”).

05 THE TRICKSTERUsing gimmicks to test for certain behaviors (e.g., throwing a wad of paper on the floor to see if a candidate picks it up).

09 THE APTITUDE TESTERUsing aptitude tests to decide for you. These tests can be useful screening tools, but they are only a small part of a much larger equation.

10 THE FORTUNE TELLERAsking forward-looking questions about hypothetical situations (e.g., “What would you do in this situation?”). You’ll probably get a great answer, but remember—it’s the walk that counts, not the talk, and a hypothetical question only gets you a hypothetical answer.

YOU ARE WHO YOU HIRE—BUT IF HIRING IS THAT IMPORTANT, WHY DO SO MANY PEOPLE GET IT WRONG?

In an age where practically every management process has been studied and codified, it’s amazing that people still view

hiring—the fundamental building block of any organization—as something that resists an orderly, logical approach. To

many managers, hiring is an art, not a science, and not just any art, but a mystical, arcane black art. With this sort of mindset,

it’s no wonder they resort to what ghSMART calls “voodoo hiring” techniques.

These voodoo hiring methods all share a common assumption: that it’s easy to assess a person. Just find the right gimmicks,

pop the right quiz and trust the scattered chicken bones to point the way, and you’re certain to have great hiring outcomes.

We’re also all prone to certain cognitive traps. We want to make quick decisions to get on with things. We like to see

people as fundamentally truthful. We wish that were so, but one of the painful truths of hiring is this:

It is hard to see people for who they really are.

ghSMART defines an A player as a “candidate who has at least a 90% chance of achieving

a set of outcomes that only the top 10% of possible candidates could achieve.”

Pay attention to the two parts of this definition. It suggests that you need to initially stack

the odds in your favor by hiring people who have at least a 90% chance of succeeding in

the role you defined. Not 50%—90%. It will take longer to find this person in the short run,

but it will save you serious time and money down the road.

The second part of the definition raises the bar. Who cares if somebody has a 90% chance

of succeeding at something that just about anybody could accomplish? You don’t want

good. You want great, and A players have a 90% chance of accomplishing what only 10%

of possible hires could accomplish.

An A player is not just a superstar. Think of an A player as the right superstar, a talented

person who can do the job you need done while fitting in with the culture of your company.

WHO ISAN

PLAYER?

6 FOR FINANCIAL PROFESSIONAL USE ONLY

WHO: SOLVE YOUR NO. 1 PROBLEM 7

The ghSMART A Method for Hiring® defines a simple four-step process for identifying and hiring A players

with a high degree of success. The A Method has worked for hundreds of ghSMART clients, including

public and private companies, partnerships and nonprofits of every shape and size. Whether you’re the

owner of a small business, leading a division in a large corporation or even a parent in need of a new

babysitter, these four easy-to-follow steps will help you get who right.

THE ghSMART A METHOD: HOW TO GET WHO RIGHT IN FOUR EASY STEPS

SELECT

Interview with a standardized process that gets the data you need to rate the Scorecard

SCORECARD

Describe the ideal candidate for the role, with measurable outcomes and competencies

SELL

Close the deal with your ideal candidate

SOURCE

Find high-potential candidates

OUTCOMES RATINGS/COMMENTS

01

DELIVER EXCELLENT CLIENT SERVICE, WITH >90% CLIENT RETENTION.

• Design and execute investments that appropriately balance risk and reward in accomplishing client objectives.

• Ensure flawless execution of client investment plans.

02

BUILD AND LEAD A TEAM OF 5 INVESTMENT PROFESSIONALS WHO CONSISTENTLY MEET OR EXCEED THEIR PERFORMANCE TARGETS.

• Ensure 100% of direct reports are A players within 1 year.

• Provide coaching and mentorship to team members.

03

GENERATE FEE-BASED REVENUE OF $3M ANNUALLY & CONTRIBUTE $1.5M TO FIRM EBITDA.

• Existing clients will generate 80% of revenue.

• New clients will generate 20% of revenue.

COMPETENCIES RATINGS/COMMENTS

CLIENT-FOCUSED

FOLLOWS THROUGH ON COMMITMENTS

ANALYTICAL

CREATIVE/INNOVATIVE

HIRES A PLAYERS

8 FOR FINANCIAL PROFESSIONAL USE ONLY

You wouldn’t think of building a house without an architect’s blueprint. Don’t hire someone for your team

without a blueprint for the role.

The Scorecard is that blueprint. It provides a clear picture of what success looks like by describing exactly

what you want a person to accomplish. It is not a job description, but rather a concise statement of the

mission for the role (why the role exists), a set of specific and measurable outcomes (what the person needs

to deliver) and the competencies that define a job done well (how that person needs to do it).

You’ll know you have the right Scorecard when everyone involved is on board and if the thought of someone

achieving the Scorecard puts a big smile on your face. The Scorecard is also a gift to new hires. They’ll know

exactly how they’ll be evaluated and what their boss cares about.

ROLE: SENIOR INVESTMENT ADVISOR, ADVISORCO

MISSION: Lead a team of five specialists who are collectively responsible for delivering outstanding client

service and profitably growing their book of business.

SCORECARD: A BLUEPRINT FOR SUCCESS

WHO: SOLVE YOUR NO. 1 PROBLEM 9

Getting great candidates does not happen without effort. It’s also not a one-time event, something you

only do every now and then. Sourcing should be an ongoing effort. Successful executives are always on the

lookout for new talent and always identifying the who before a new hire is really needed.

Of all the ways to source candidates, the No. 1 method is to ask for referrals from your personal and

professional networks. Ask your contacts, “Who are the most talented people you know that I should

consider hiring?” Then reach out to these talented people and get to know them. Over time, you’ll have

created a “virtual bench” of talent that you can call on when the need arises.

SOURCE: GENERATING A FLOW OF A PLAYERS

Too often, hiring decisions are made based on incomplete information that is simply not applicable to or

predictive of job performance. In contrast, the A Method includes a series of structured interviews that

gather comprehensive and relevant data about somebody’s performance track record over time.

THE A METHOD IS CAREFULLY DESIGNED TO:

+ Filter out bad candidates quickly

+ Evaluate candidates in a way that’s relevant to the Scorecard and the specifics of the role—it delivers all the data you need to make an informed decision

+ Eliminate duplicative interviewing from multiple people capturing the same data

+ Give candidates a positive experience that helps sell them on your firm and enhances your brand

SELECT: INTERVIEWING TO SPOT A PLAYERS

FOR FINANCIAL PROFESSIONAL USE ONLY10

THE FOUR

METHOD INTERVIEWS

SCREENING QUESTION WHAT YOU’RE LOOKING FOR

What are your career goals?Talented people know what they want to do and aren’t afraid to tell you about it. And if their goals aren’t a match with the job, screen them out.

What are you really good at professionally?

Do the candidates’ strengths match the Scorecard? If not, screen them out.

What are you not good at or not interested in doing professionally?

If they’re not good at or lack interest in critical elements of the Scorecard, screen them out.

Who were your last five bosses and how will they rate your performance on a 1–10 scale when we talk to them? What will each of them point to as your strengths and development areas?

This question will flesh out your understanding of what candidates are and aren’t good at, and the use of TORC—Threat of the Reference Check—will keep candidates honest. You’re looking for 8s, 9s and 10s. Watch out for 6s and below. Candidates giving themselves a 6 are really saying 2.

After the screening interview, ask yourself: Do the strengths match the Scorecard? Are the weaknesses

manageable? Am I thrilled about bringing this person in? Only proceed if your answer to each of

these questions is yes.

WHO: SOLVE YOUR NO. 1 PROBLEM 11

01 THE SCREENING INTERVIEWThe Screening Interview is a short (30–45 minutes) phone-based interview that uses four simple questions to

filter out inappropriate candidates ASAP.

FOR FINANCIAL PROFESSIONAL USE ONLY

Many investment products come clearly marked: “Past performance is not indicative of

future results.” This may hold true in finance, but ghSMART believes the opposite is true

for people, and that belief is core to the Who Interview. The Who Interview uncovers data

and patterns of behavior in the candidate’s career history that can be used to predict

future performance.

You begin by asking about the highs and lows of candidates’ educational experience to gain insight into

their backgrounds. Then you ask five simple questions for each job in the past 15 years, beginning with the

earliest job and working your way forward to the present day. These five questions are so straightforward

that the discussion may feel more like a conversation than an interview—candidates actually enjoy it,

because they have a chance to tell their stories.

And remember: Curiosity is a critical ingredient of an effective interview process. You want candidates to be

specific and provide real-life examples, so double and triple click on every answer. By getting curious—asking

“What?” “How?” and “Tell me more”—you’ll gather an immense amount of data about candidates’ strengths

along with what they find more challenging. You can then use this data to assess a candidate’s fit with the

Scorecard with objectivity and a high degree of accuracy.

THE WHO INTERVIEW—INTERVIEWER SCRIPT

EDUCATION: FOR HIGH SCHOOL, UNIVERSITY, AND GRADUATE SCHOOL (10–15 minutes)

1. What were your biggest high points? 2. What were your biggest low points?

FOR EACH JOB IN THE PAST 15 YEARS (20–30 minutes per job)

1. What were you hired to do?2. What accomplishments are you most

proud of?

3. What were some low points during that job?

4. Who were the people you worked with? Specifically:

+ Bosses: What was your boss’s name? How do you spell that? What was it like working with him/her? What will he/she say were your biggest strengths? Areas for improvement?

+ Teams: How would you rate the team you inherited on an A, B, C scale? What changes did you make? Did you hire anybody? Fire anybody? How would you rate the team on an A, B, C scale when you left?

5. Why did you leave that job?

CAREER GOALS (10 minutes)

1. What are your career goals for the future?

02 THE WHO INTERVIEW®

12

WHO: SOLVE YOUR NO. 1 PROBLEM 13

The Who Interview is so comprehensive that it should get you most of way toward the right

answer, but it may make sense to conduct one to two more targeted interviews to gather

specific information relevant to the Scorecard. For example, for a highly technical role, this

is an opportunity to delve into the details of a candidate’s technical skills, or you might

want to further probe a candidate’s international experience for a role that will require that

person to manage a global team.

The Focused Interview generally lasts about 45 to 60 minutes and follows a simple format. First,

you introduce the purpose of the interview (e.g., “The purpose of this interview is to talk about your

programming experience”). Then you ask, “What were your biggest programming accomplishments

during your career?” And finally, you follow up with “What are your insights into your biggest programming

mistakes and lessons learned?”

03 THE FOCUSED INTERVIEW

FOR FINANCIAL PROFESSIONAL USE ONLY14

WHATEVER YOU DO, DON’T SKIP THE REFERENCES!

References allow you to pressure test your own conclusions by gathering third-party feedback. Review your

notes from the Who Interview and pick six to eight bosses, peers and subordinates you’d like to speak to—

don’t just go off the list the candidate gives you.

A truly positive reference should brim with tremendous enthusiasm and obvious admiration. There won’t be

any hesitation or hedging. That excitement and spark are the clearest indicators that you and the reference

are both talking about the same A player.

The A Method interviews give you all the data you’ll need to rate your Scorecard. Begin by evaluating

skill—in other words, the combination of strengths and weaknesses that describe what a candidate can

accomplish. Use your assessment of a candidate’s skill to grade the outcomes section of the Scorecard.

Next, evaluate will—specifically, the combination of motivations, behaviors and values that describe how

a person operates. Use your assessment of the candidate’s will to grade the competencies section of

the Scorecard.

An A player for the role is someone whose skill and will offer a strong match with the Scorecard.

SELLOnce you identify people you want on your team, you need to persuade them to join. Selling the right

way ensures that you avoid the biggest pitfalls that cause the very people you want the most to take their

talents elsewhere. It also protects you from the biggest heartbreak of all—losing the perfect candidate at

the eleventh hour.

The key to closing the deal with your candidate is to put yourself in that person’s shoes. Care about what

that person cares about. ghSMART talks about the five F’s of selling: Fit, Family, Freedom, Fortune and Fun.

Figure out which of these really matter to the candidate, and address them throughout the hiring process,

from the moment you first make contact to making the offer and beyond.

04 THE REFERENCE INTERVIEW

DECIDING WHO TO HIRE: THE SKILL-WILL BULL’S-EYE

WHO: SOLVE YOUR NO. 1 PROBLEM 15

PUTTING IT ALL TOGETHERYour clients count on you to help them realize their financial objectives and secure their financial

futures. You and your team earn their trust by poring over the data and thoroughly vetting

investment strategies and products. You wouldn’t recommend an investment based on “voodoo

analysis”—why would you build your team based on “voodoo hiring”?

The A Method is simple and practical, and as ghSMART clients attest, it works. ghSMART has

seen CEO after CEO implement the A Method and achieve amazing results.

Getting who right may be the highest-return investment you’ll ever make.

Randy Street of G.H. Smart & Company, Inc. (“ghSMART”), is an advisor to WisdomTree Asset Management, Inc. (“WisdomTree”). This material contains the current research and opinions of Mr. Street and ghSMART, which should not be considered or interpreted as a recommendation to participate in any particular investment strategy or deemed to be an offer or sale of any investment product, and it should not be relied on as such. The user of this information assumes the entire risk of any use made of the information provided herein. Unless expressly stated otherwise, the opinions, interpretations or findings expressed herein do not necessarily represent the views of WisdomTree or any of its affiliates.

ghSMART®, ghSMART A Method for Hiring®, and Who Interview® are registered trademarks of G. H. Smart and Company, Inc. and used with permission. The content contained in this paper summarize what can be found in Who: The A Method for Hiring by Geoff Smart and Randy Street. All rights reserved.

© 2017 WisdomTree Investments, Inc.

FOR FINANCIAL PROFESSIONAL USE ONLY