Lou's Views Thoughts on executive recruiting and other things

The Upside of Hiring Risk

“How Google Works”, a book written in 2014 by Google Executive Chairman Eric Schmidt and former SVP of Products Jonathan Rosenberg, is an anthology of lessons learned by the authors during Google’s meteoric growth. In one vignette, before departing to London to meet a group of Rhodes Scholars, Rosenberg contemplates how he will determine which Scholars to invite to interview at the Googleplex. Sergey Brin solves the dilemma stating, “Why decide at all? Offer all of them jobs”. The scarce resource for Google was intellectual capital, not financial capital.

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Execution Über Alles

Jack Welch wrote, Winning, a tome proclaimed by Warren Buffett as, “No other management book will ever be needed.”

Chapter 6 is titled “Hiring”. Welch states that, “Hiring good people is hard. Hiring great people is brutally hard.” Is there a successful manager, in any company that has scaled, who would disagree with Jack’s statement? Economic factors such as misunderstanding opportunity costs (functional tasks vs. recruiting tasks of the hiring manager) and psychological behaviors such as the scarcity heuristic and groupthink impede and bias the hiring process. I succumbed to these issues in my early operational career building marketing and sales teams. Assisting a client to avoid these roadblocks is essential in the hyper-competitive IT hiring environment.

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The Candidate Queue

Assembling a qualified candidate queue is paramount in recruiting. Studies indicate that an erroneous hire can cost a company 15x base salary in hard costs and productivity losses. In the startup world, these mistakes can be lethal as startups highly leverage their precious resources of capital, talent and time. Though used metaphorically here, Sackett has shown that statistical confidence is proportional to the square root of sample size,  c α √n. Increasing sample size by a factor of two, increases “confidence” over 40%.

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