HIGHLIGHTS Geoff Smart Episode

This idea is worth continuing , but I wanted to experiment and see how it goes .

If you survey your listeners and say , hey , just reflect for a moment on your last few hires who have been with you for you know over the last two , three years or so , how many of them would you say you weren't surprised . They performed as advertised and you're happy that you hired them . The number is 50% .

It just is across regions , across SIC codes , across industries .

And what I learned from reading all the psychology stuff in my PhD program in psychology on this topic and then practicing it and refining it over the last three decades , is you can achieve a 90% hiring success rate if you follow a couple of best practices it's actually four best practices but if you don't follow them you're doomed to a 50% success rate .

Stop chasing the what and really allocate more time to solving the who . Do what Rob Waldron did . So check this out . He was stuck at a $13 million valuation for his business Not bad . He listened to someone in our company give a keynote speech about 10 years ago , saying stop chasing the what and really allocate more time to solving the who .

So he said all he did to change his leadership approach , his management approach was to go from spending less than 5% of his time on hiring and developing his teams to spending about a quarter of his time on it . So that's a lot of time , 25% of your time , that's a lot of time , right ?

And he said all I did was really focus on what are the two or three key hires I need to be making right now . And rather than looking at one or two or three candidates , I'd look at dozens of candidates and I'd get referrals . And he practiced the four methods that you and I are definitely going to talk about . He followed the correct approach to hiring .

He spent the right amount of time on it and his $13 million business turned into $30 million , turned into $500 million , turned into a billion , turned into a $5.2 billion business over a decade . And I said well , come on , what else happened in the business ?

He said I didn't do anything different other than change from not really focusing on the talent part to really making it a major allocation of how I spend my time and then just getting the next two or three key hires . Right has made all the difference in the world , okay so here's what to do .

You do these four things , and the four things are called scorecard , source , select and sell . What are the outcomes you expect this person to achieve in this role ? A big , big , big , big mistake entrepreneurs make . I'm talking to you , ann's entrepreneur business starters out there is .

You hire your cousin to be head of marketing and then , oh yeah , your next door neighbor is like your product person . Knock it off with the hiring the warm bodies who happen to be around you . Okay , knock it off with that .

That is your business is too important to just hire whoever is just around you like stop that , get a huge pile of candidates that you're considering . That's like step , step . Two Takes a candidate like a finalist candidate , like someone you're pretty sure you want to hire .

That's when you wheel out this heavy duty interview and you basically just walk them through each of the chapters of their career and you talk about highlights and accomplishments . You talk about low points and things that didn't go well For each job they've had . You're asking them what were they hired to do ? What did they accomplish they're most proud of ?

What were some examples of mistakes or things that didn't go well ? Who did they work with ? And this is a great one . Watch this , what was your boss's name in that job ? And then they tell you and then show them you're writing the boss's name down Ooh , susan Jackson . And then ask them to spell the boss's name Like , how do you spell Jackson ?

And they'll say you know J-A-C-K-S-O-N . And then write it down Great . And then you say , oh , at some point in this process we might ask for your help setting up some reference calls , if that's okay . And then the candidate says like , yeah , that's fine .

And then you say , great , when we talk with Susan Jackson , what's she going to say were your big strengths and weaknesses ? When you work together and as entrepreneurs , we have to sell like heck to land the A caliber talent that you want to bring into your business .

Because , guess what , they're already gainfully employed somewhere , doing well , making money and making impact and treating their colleagues well somewhere else . So you have to really put the sell on them in order to get them to say yes to joining your smaller company .

To me it's all about getting the data of what they've actually accomplished and getting examples of it , getting the real numbers , verifying it with references . That's what good hiring looks like . It's great to give people very honest feedback .

Give them a lot of feedback , give them more feedback than they even want to hear it so they really understand where they stand , really be clear on expectations , really be clear on steps that they could do in order to perform at the target level .

The number one regret the last I don't know thousand managers we've advised or worked with will tell you is waiting too long to remove a low performing colleague . And I'm telling you , if that person's also culturally toxic and is like being mean to people or mistreating juniors or doing anything bad , that's like cultural deep . That is very , very costly .

You got to have those chats with the people . If there's like values abusers at your company , get them out , pronto , pronto , pronto . Maybe not even a whole lot of coaching and feedback , because it's just so costly to those around .

Someone was talking about the difference between working in your business versus working on your business and a light bulb just went on and sirens sounded and I was like wait a second , I can work on the business without working in the business .

You know , I was carrying a 20 client load , like I was in it , in it , in it , and then I looked around in 09 and we all were like , okay , who wants to run this thing ? I was like I don't need to run this , like I'm a proud founder and sort of chairman here , but if someone else wants to step up and run it , like a show of hands .

And so we picked Randy Street , the co-author on the who book . So we had worked really well together on the who book and he is an engineer by training . He's a Harvard MBA . He worked at Bain for like 10 years . He ran a company .

He had operating chops , as we would say , not just consulting skills and so he became the president and managing partner in 2010 . And he 10X'd the business over the next 10 , 11 years . So I mean it wasn't like how did I do it ? Oh , I picked Randy , randy did it . I mean it wasn't like how did I do it ? Oh , I picked Randy , randy did it .

I mean it was like literally like that simple

. I would highly recommend to your listeners , highly , highly , highly recommend for gosh sake , find someone to help run your business . Maybe it's a muscular CFO who could play the role of COO . Maybe it's like you do what I did hire a president to run the day to day , run the really run the business , run the meetings .

A lot of small medium businesses owners are like oh you know , no one , I wouldn't trust anyone else to run the business . And that's probably true because their hiring process stinks . They shouldn't trust other people to run their business . But if they improve their hiring process and they really find some excellent talent , for gosh sake .

I shall now quote Warren Buffett , who said hire well and manage little . Don't micromanage your star performers or they will leave . But if you align on goals , you have a great culture . You're willing to delegate and let people have room to operate . You reward and incent when they really do well so they can share in the upside . You're good .

You're going to be golden . As a small business owner , you're going to find yourself suddenly a medium business owner and , spoiler alert , freedom makes people happy in the workplace . When you have freedom to choose and you have control over your time , you're way happier than if you're living in a more coercive environment . We've written four books as a firm .

We published that . They were all bestsellers . We for sure should write a book on culture . We haven't yet , but I'll give you my secret sauce here . There are five things your listeners can do to manage their culture . To like create the culture that they think is going to win the day . The five things are who you hire .

Create the culture that they think is going to , you know , win the day . The five things are who you hire clear expectations . Three is incentive alignment , which is like are you developing your colleagues , are you helping people learn and grow ? That kind of thing right , so you have to reward people for it .

Training give folks training so they can know how to do whatever the key elements of your culture are . And then the last one I don't even get named for I call it like structures , but just the idea of like who's meeting when . What's the org chart ? Look like it's also who you fire .

When we have fired people who weren't living our values , although it's a sad day and we're like oh man , you know , I wish we could have , you know , helped that person not be such a culture destroyer . But when we've done that over the years , the very next day everybody sighs a big sigh of relief and you go .

That was an important thing that's a very important part of building and sustaining your culture is taking out folks who are actively toxic in that culture . So I got seven things that matter leaders who really worked on being decisive , like make more decisions , not less . Make faster decisions , not slower .

Working on being a decisive decision maker massively correlated with success as a business builder . So that was one . Two is A adaptability . So don't fall into the trap where you're just like well , that's what I always did . Meanwhile market conditions have changed or product conditions have changed . Like being able to face reality and then adapt .

That's what I always did . You know , meanwhile market conditions have changed or product conditions have changed . Like being able to face reality and then adapt . That's the second thing . Third is reliability . If you say you're going to do something , like do it , we're huge in GH , smart on , we start meetings weirdly on time , we end them on time .

If we say we're going to do something two years from now , like we do it , like we're very , very reliable and it creates trust , it creates just a really high competence culture if you're super reliable . So that's the third one . The fourth one is E engaging for impact . So it's not good enough just to have the right answer .

As a leader , having the right answer , oh congrats . Great , you have the right answer . You need to persuade other people and influence and listen , and basically it's like persuasive communication was the fourth thing that matters , and it's this learned skill . I mean you can learn how to be a more persuasive communicator .

So that's , those are the four that came out of that study . Setting the right goals , not too many goals , but just a small number of the right goals . I think that's basically the spirit of what good prioritization looks like as an entrepreneur . That's the P . The W is who's on your team . So back to the hiring and firing thing learn it . You can learn it .

Read our books , like listen to this podcast , like learning how to be good at hiring and firing , to build talented teams super important skill to develop . And then R is relationships . It's like how do you build relationships that are focused on achieving shared goals together ? Of them , cite having good mentors as , like one of the most important things .

Mentors were super important to me . Mentors are super important to people who build amazing things quickly . Yet I don't see even my own kids to the degree I think they should . I don't see young people proactively searching out mentors and kind of collecting mentors . I'd say that'd be like the last career strategy . Advice is it's free , it's not that scary .

Dm people on LinkedIn Get referred to so-and-so M . People on LinkedIn find out , get referred to so-and-so Freaking . Steve Jobs called up the founder of Hewlett Packard , of HP , to get computer parts that he could like build something when he was 12 . Like , weirdly , people out there who get like a step function of success and you're like how do they do that ?

They all have mentors giving them advice or intros or computer components , as it turns out .

So I'd say , if you're young and you're listening to Ann's podcast , just think about what do you want to learn or what are some jobs or industries or types of roles that really sound interesting to you ? Who do you know ? And maybe you don't know anybody .

But like , use the network you have to get to folks or just go ahead and blind DM people on LinkedIn , call them up , email them . You can figure out this stuff and try to recruit .

I'd say , by the time you're 20 , to have like five really good mentors who are very successful people in the field you wanna be successful in is unbelievably positive return on investment of your time .