Tag Archives: Hiring

Everything I’ve Learned About Recruiting and Interviewing

The other day a founder asked me about interviewing because a candidate had described me as “a great interviewer,” and she wanted to know why. (And for that matter, so did I.)

Emboldened by this seeming endorsement, I dashed off what turned into a lengthy email on interviewing and recruiting, a topic about which I am passionate not because I think I am good it, but because I think I am not.  I find interviewing and recruiting difficult, have made plenty of mistakes over the years, and the consequences of those mistakes are invariably painful.  The wise manager approaches recruiting as a great opportunity to strengthen the organization, but does so with some degree of humility, if not trepidation.

Thoughts on The Recruiting Process
Let’s start by sharing some things I’ve learned over the years on the recruiting process, before we dive specifically into interviewing.

  • Know what you’re looking for.  Most troubles begin here because people fail to ponder and debate what they are actually looking for, so you do the equivalent of walking into Costco without a shopping list.  For example, for a seller, do you require software applications, platform, or data & analytics experience?  What size deals?  To line of business, IT, or both?  For a CFO, do you require a accounting or finance background?  A veteran or an up-and-comer?  A CF-No or a CF-Go style?  You should know the answers to these questions; keep yourself honest by documenting them in a must-have / nice-to-have document.
  • Remember it’s a mutual sales process.  Unless you’re blessed to be at the hottest company in town, always remember that recruiting is a mutual sales process.  That means you need to be selling and filtering at the same time.  Particularly at the end of the process, interviewers should be told whether they should be primarily in “sell mode” or “filter mode.”  As it turns out, the person who said I was a “great interviewer” was a late-stage candidate who saw me in sell mode.  (And, yes, we succeeded with the hire!)  But who knows what they’d have thought of me in filter mode?
  • Follow some methodology or book.  I’m not particularly religious about which one, but I think a common framework helps to ensure completeness and improve communication during the recruiting process.   My private equity friends at ParkerGale, who do a great job of methodology selection, swear by Lou Alder so I’ll plug Hire With Your Head here.  ParkerGale has their own hiring playbook available as well.
  • Use work test samples.  While I’m not big into puzzles with prisoners and lightbulbs, I am a huge believer in having candidates do anything that approximates the work they’ll be doing if they take the job.  Have a product marketing manager give a presentation.  Ask a seller to role-play a sales call.  Have an engineer write pseudo-code to generate the Fibonacci sequence (to see if they understand recursion).  My all-time favorite was giving two FP&A directors the same three-tab spreadsheet with instructions “fix it,” “answer it,” and “model it” to test their attention to detail, problem solving, and modeling abilities.  The two were neck-and-neck on paper and in the interviews, but the exercise revealed a massive difference between them.  (We hired the one whose work stood out and were happy we did.)
  • Check references.  While I suppose the standard process of checking candidate-supplied references is still de rigeur, my favorite reference checks are backchannel and framed not in a binary hire-or-not light, but instead in the light of:  if I were to hire them, what strengths and weaknesses should I expect to see and how should I work with them to get the best results?  This framing tends to produce a better conversation.
  • Consider a try-and-buy.  One way to remove enormous risk from the recruiting process is a try-and-buy:  hire the person as a contractor or consultant, try working together for 3 to 6 months, and if both sides are happy at the end of that period, then convert the candidate to regular employment.  This works for some positions better than others — e.g., fractional CFOs and rent-a-CMOs already exist, whereas fractional CROs and CPOs (product) generally do not.  This works for some situations better than others:  it won’t work when recruiting a veteran CMO out of an existing job, but it can work nicely when considering a between-jobs, up-and-coming VP of Finance for their first CFO role.  Be open, be creative.  I’ve made some great hires this way — and avoided some train wrecks.

Thoughts on the Interview
When it comes specifically to interviewing, here’s what I’ve learned.

  • After chit-chat, ask for a N-minute life story with an emphasis on the why, not the what (i.e., why did you major in X, take first job Y, or move to job Z, as opposed to what you did in each).  For math types, I call this the first derivative of your resume.  I like to time-bound it, typically to 5 or 10 minutes, to see if the candidate has the ability to manage time and summarize accordingly.  I like the first derivative because it provides more information:  I already (largely) know what a PMM or VP of Finance does at a software company.  I’d much prefer to hear why someone chose to work (or stop work) at company X.  Moreover, if I want to understand accomplishments or duties, I can ask that separately, not as part of the life story.
  • After hearing “tough, but fair” for the 100th time, I decided to never ask for philosophies of any type, ever again.  Instead, think about situations that are encountered on the job and ask for relevant stories:  tell me about a time your fired someone, tell me about a time you launched a product, tell me about a time you ran the planning and budgeting process.  The experts call this behavioral interviewing, and it works.
  • Drill, baby, drill.   While I first learned this technique as a way to catch liars and exaggerators (who are frequently ensnared by the details), drill-down questions make fantastic follow-ups to behavioral “tell me about a time” questions.  Example:  tell me about a time you ran a budgeting process?  Drill-downs:  what year was it, in what month did you start, what was the rough total expense budget, how did you define the process, how many budget owners were there, how many iterations did you go through, how did you agree on the sales plan, did salesops have their own model, who made the churn plan, did they properly handle multi-year deals, who was the hardest exec to get on target, what were their objections, how did you handle them, when did the board finally approve it, how many iterations did that take, what were the initial objections, what would you do differently?  I’ve literally started down this path and had people say, “uh, I didn’t actually run the process in that job, but I was part of it” — an important distinction.  Whether to catch embellishment or to better understand candidates, drill-down questions work.  It’s more effective to go ten feet deep on one situation than one foot deep across ten.
  • Consider a panel interview.  I’ve become a huge fan of properly conducted panel interviews.  But first, what a panel interview is not:  it’s not randomly throwing 2-3 interviewers into a room with a candidate with no structure or preparation.  That’s called a romp, and it’s usually a negative experience for everyone.  What I’ve seen work is the following:  after a screening process that results in three candidates who meet all must-have criteria, you appoint a lead interviewer to create 5 behavioral questions (based on expected job duties in the first 12 to 18 months), share those questions with the candidate in advance, and then run a 90-minute live interview with a panel of 3-5 members who largely listen and ask follow-up questions only.  You create a scoring rubric, have all interviewers complete it, and then conduct a live discussion to compare the candidates.  This is FIRE.  In theory any of three candidates can do the job, so you’re focused on picking the best one for the company and situation.  The panelists listen intently because they’re not worried about running the interview, the remaining time, or their next question.  All candidates are asked the same questions.  And then you debrief via a live discussion which, as much as I love technology, is far higher bandwidth than any collaboration mechanism.  And you avoid groupthink because the rubric has been completed in advance.  Fire.  I thank ParkerGale for teaching this technique to me; they have a Private Equity Funcast episode on how they approach hiring here.

Hiring Profiles: Step 0 of a Successful Onboarding Program

Happily, in the past several years startups are increasingly recognizing the value of strong sales enablement and sales productivity teams.  So it’s no surprise that I hear a lot about high-growth companies building onboarding programs to enable successfully scaling their sales organizations and sustain their growth.  What’s disappointing, however, is how little I hear about the hiring profiles of the people that we want to put into these programs.

Everyone loves to talk about onboarding, but everybody hates to talk about hiring profiles.  It doesn’t make sense.  It’s like talking about a machine — how it works and what it produces — without ever talking about what you feed into it.  Obviously, when you step back and think about it, the success of any onboarding program is going to be a function of both the program and people you feed into it.  So we are we so eager to talk about the former and so unwilling to talk about the latter?

Talking about the program is fairly easy.  It’s a constructive exercise in building something that many folks have built before — so it’s about content structuring, best practice sharing, and the like.  Talking about hiring profiles — i.e., the kind of people we want to feed into it — is harder because:

  • It’s constraining.  “Well, an ideal new hire might look like X, but we’re not always going to find that.  If that one profile was all I could hire, I could never build the sales team fast enough.”
  • It’s a matter of opinion.  “Success around here comes in many shapes and sizes.  There is not just one profile.”
  • It’s unscientific.  “I can just tell who has the sales gene and who doesn’t.  That’s the hardest thing to hire for.  And I just know when they have it.”
  • It’s controversial.  “Turns out none of my six first-line sales managers really agree on what it takes — e.g., we have an endless debate on whether domain-knowledge actually hurts or helps.”
  • It’s early days.  “Frankly, we just don’t know what the key success criteria are, and we’re working off a pretty small sample.”
  • You have conflicting data.  “Most of the ex-Oracle veterans we’ve hired have been fish out of water, but two of them did really well.”
  • There are invariably outliers.  “Look at Joe, we’d never hire him today — he looks nothing like the proposed profile — but he’s one of our top people.”

That’s why most sales managers would probably prefer discussing revenue recognition rules to hiring profiles.  “I’ll just hire great sales athletes and the rest will take care of itself.”  But will it?

In fact, the nonsensicality of the fairly typical approach to building a startup sales force becomes most clear when viewed through the onboarding lens.

Imagine you’re the VP of sales enablement:

“Wait a minute. I suppose it’s OK if you want to let every sales manager hire to their own criteria because we’re small and don’t really know for sure what the formula is.  But how am I supposed to build a training program that has a mix of people with completely different backgrounds:

  • Some have <5 years, some have 5-10 years, and some have 15+ years of enterprise sales experience?
  • Some know the domain cold and have sold in the category for years whereas others have never sold in our category before?
  • Some have experience selling platforms (which we do) but some have only sold applications?
  • Some are transactional closers, some are relationship builders, and some are challenger-type solution sellers?”

I understand that your company may have different sales roles (e.g., inside sales, enterprise sales) [1] and that you will have different hiring profiles per role.  But you if you want to scale your sales force — and a big part of scaling is onboarding — then you’re going to need to recruit cohorts that are sufficiently homogeneous that you can actually build an effective training program.   I’d argue there are many other great reasons to define and enforce hiring profiles [2], but the clearest and simplest one is:  if you’re going to hire a completely heterogeneous group of sales folks, how in the heck are you going to train them?

# # #

Notes

[1] Though I’d argue that many startups over-diversify these roles too early.  Concretely put, if you have less than 25 quota-carrying reps, you should have no more than two roles.

[2] Which can include conscious, deliberate experiments outside them.

 

 

How to Manage Your First Sales VP at a Startup

One of the hardest hires — and one of the hardest jobs — is to be the first VP of sales at a startup.  Why?

  • There is no history / experience
  • Nobody knows what works and what doesn’t work
  • The company may not have a well defined strategy so it’s hard to make a go-to-market strategy that maps to it
  • Any strategy you choose is somewhat complex because it needs to leave room for experimentation
  • If things don’t work the strong default tendency is to blame the VP of sales and sales execution, and not strategy or product.  (Your second VP of sales gets to blame product or strategy — but never your first.)

It’s a tough job, no doubt.  But it’s also tough for a founder or new CEO to manage the first sales VP.

  • The people who sign up for this high-risk duty are often cocksure and difficult to manage
  • They tend to dismiss questions with experienced-based answers (i.e., well we did thing X at company Y and it worked) that make everything sound easy.
  • They tend to smokescreen issues with such dismissals in order to give themselves maximum flexibility.
  • Most founders know little about sales; they’ve typically never worked in sales and it’s not taught in (business) school.

I think the best thing a founder can do to manage this is to conceptually separate two things:

  • How well the sales VP implements the sales model agreed to with the CEO and the board.
  • Whether that model works.

For example, if your team agrees that it wants to focus on Defense as its beachhead market, but still opportunistically experiment horizontally, then you might agree with the sales VP to build a model that creates a focused team on Department of Defense (DoD) and covers the rest of the country horizontally with a enterprise/corporate split.  More specifically, you might decide to:

  • Create a team of 3 quota carrying reps (QCRs) selling to the DoD who each have 10+ years experience selling to the DoD, ideally holding top secret clearances, supported by 2 sales consultants (SCs) and 2 business development reps (BDRs) with the entire team located in a Regus office in McLean, VA and everyone living with a one-hour commute of that office.
  • Hire 2 enterprise QCRs, one for the East and one for the West, the former in McLean and the latter in SF, each calling only on $1B+ revenue companies, each supported by 1 local SC, and 2 BDRs, where the BDRs are located at corporate (in SF).  Each enterprise QCR must have 10+ years experience selling software in the company’s category.
  • Hire 2 corporate reps in SF, each sharing 1 SC, and supported by 2 BDRs calling on sub $1B revenue companies.  Each corporate rep must have 5+ years experience selling software in the category.

In addition, you would create specific hiring profiles for each role ideally expressed with perhaps 5-10 must-have and 3-5 nice-to-have criteria.

Two key questions:

  • Do we know if this is going to work?  No, of course not.  It’s a startup.  We have no customers, data, or history.  We’ve taken our best guess based on understanding the market and the customers.  But we can’t possibly know if this is going to work.
  • Can we tell if the sales VP is executing it?  Yes.  And you can hold him/her accountable for so doing.  That’s the point.

At far too many startups, the problem is not decomposed in this manner, the specifics are not spelled out, and here’s what happens instead.  The sales VP says:

The plan?  Yes, let me tell you the plan.  I’m going to put boots down in several NFL cities, real sales athletes mind you, the best.  People I’ve worked with who made $500K, $750K, or even $1M in commissions back at Siebel or Salesforce or Oracle.  The best.  We’re going to support those athletes with the best SCs we can find, and we’re going to create an inside sales and SDR team that is bar none, world-class.  We’re going to set standard quotas and ramps and knock this sonofabitch out of the park.  I’ve done this before, I’m matching the patterns, trust me, this is going to be great.

Translation:  we’re going to hire somewhere between 4 and 8 salespeople who I have worked with in the past and who were successful in other companies regardless of whether they have expertise in our space, the skills required in our space, are located where out strategy indicates they should be.  Oh, and since I know a great pharma rep, we’re going to make pharma a territory  and even though he moved to Denver after living in New Jersey, we’ll just fly him out when we need to.  Oh, and the SDRs, I know a great one in Boise and one in Austin.  Yes, and the inside reps, Joe, Joey, Joey-The-Hacksaw was a killer back in the day and even though he’s always on his bass boat and living in Michigan now, we’re going to hire him even though technically speaking our inside reps are supposed to be in SF.

This, as they say in England, is a “dog’s breakfast” of  a sales model.  And when it doesn’t work — and the question is when, not if — what has the company learned?  Precisely and absolutely zero.

If you’re a true optimist, you might say we’ve learned that a bunch of random decisions to hire old cronies scattered across the country with no regard for strategy, models, or hiring profiles, doesn’t work.  But wait a minute — you knew that already; you didn’t need to spend $10M in VC to find out.  (See my post, If We Can’t Have Repeatable Success Can We At Least Have Repeatable Failure?)

By making the model clear — and quite specific as in my example above — you can not only flush out any disagreements in advance, but you can also hold the sales VP accountable for building the model they say they are going to build.  With a squishy model, as my other example shows, you can never actually know because it’s so vague you can’t tell.

This approach actually benefits both sides

  • The CEO benefits because he/she doesn’t get pushed around into agreeing to a vague model that he/she doesn’t understand.  By focusing on specifics the CEO gets to think through the proposed model and decide whether he/she likes it.
  • The Sales VP benefits as well.  While he/she loses some flexibility because hiring can’t be totally opportunistic, on the flip side, if the Sales VP implements the agreed-to model and it doesn’t work, he/she is not totally alone and to blame.  It’s “we failed,” not “you failed.”  Which might lead to a second chance for the sales VP to implement a new model.