The Human Factor: How Hiring Shapes Your Organization

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April 11, 2024

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Recruiting and team construction are crucial for any company's culture and success. This week, Phuong and I dive into this topic and how important it is to focus on hiring when building a startup. Phuong provides insights into assessing team needs, creating effective job descriptions, conducting thoughtful interviews, and evaluating candidates based on grit, humility, and integrity. When looking to add people to the team not only should technical qualifications be considered but we underscore the significance of soft skills. Every person you bring into your team has an impact on shaping organizational culture and success. Lastly, we share a tool used here at Interplay, Superman Analysis. We use Superman Analysis to assess team needs and identify gaps in skills enabling us to ensure our team is structured and staffed as it should be.

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‍TRANSCRIPT (this is an automated transcript):

‍MPD: Welcome, everybody. I'm Mark Peter Davis, Managing Partner of Interplay. I'm on a mission to help entrepreneurs advance society. And this podcast is definitively part of that effort. All right, we've got Phuong back today, running through mission critical startup tips. Today's topic is muy importante. We roll into team construction and recruiting.

And it's one of those things that I think a lot of entrepreneurs think of it more as a checkbox. And something they just need to get through. But the best of the best know that this is actually the foundation of the entire company's culture, operating capability, and usually an indicator of the future.

Some very valuable tips here. I hope they are helpful. Enjoy.

All right. Phuong.

Phuong: Hey, Mark.

MPD: Excited about this week's startup lesson. How are you?

Phuong: Yeah, me too. I'm good. I'm good. You're looking good.

MPD: I've got I've up my game. I did the blazer purchase. I don't know, someone at 45, you can't dress like a kid anymore. You've got to level up a little bit.

Phuong: I think most people say that about 30 or 35.

So you're, 10 or 15 years too late, but better late than never.

MPD: I'm a pretty consistently late bloomer. That's my thing. Yeah,

but I did get a bunch of blazers and I'm trying to do a casual blazer guy on occasion. So it'll be like a t shirt and a blazer or a sweater and a blazer. Yeah. What do we think? Is that going to work?

Phuong: I don't, I'm going to, I'm going to keep track of what these occasions are. Like what the occasions are that you feel like are are worthy of a casual blazer guy.

MPD: Yeah. I don't know, but it's a step up from just black t shirt. That's for sure. Yeah.

Phuong: Looking good.

MPD: Thank you for the moral support. I need it. And let's jump in. Let's do, let's learn some startup lessons. Sure, sure.

Phuong: So Mark, today we're going to talk about a topic that I know you find really critical in building a company.

And that we often discuss as a team at Interplay. And that's recruiting and specifically how to find the right person to fill roles on your team or the right people. This is super important regardless of what stage your company is at, but for early stage companies, it's extra critical because First, I think this is something I've heard you say the first 10 or so companies, the 10 first or so employees become the foundation for your company culture, like forever, you can probably evolve it, but it still becomes like a core foundation.

And then secondly, when you're moving so fast with a small team in those early days, everyone's doing multiple jobs. Everyone's working really closely together. When you pick someone wrong, it's the cost is really high, right? Hiring someone who's not a real fit at this point can really impact the entire company.

How do you make sure you're getting the right people in? The first step is to figure out what you need. Based on the skill set you already have on the team and what needs to be done, what are the functions that need to be covered by this new person? What are the skills does this new person need to have?

And there's a tool we have here at interplay to assess that, and it's called the Superman analysis, which we covered in 1 of our earlier episodes. You can find a link to it on the show notes. So it's basically a Google sheet where in the 1st column, we list all the activities that need to be accomplished for the company to run effectively.

And we prioritize that by the most important activities. In each of the next column columns, we list out each current team member and map out which of these skills each person is good at. I think once you do that, it'll become clear where your holes are and what you need to recruit for. And it goes without saying that at this point, you should be hiring into your team skill gap.

It might be tempting to say sales is an important driver of growth. And even though I'm already good at sales, we should probably double down on sales. But meanwhile, no one's doing customer service. I think in these early stages, you'll benefit more from rounding out your team skills. Then doubling up on any particular area and then once you determine what you need, write a clear and thorough job description.

This part is not just a formality. It sets up the foundation for the whole search. So don't just cut and paste your way through it. Aside from the basics, like job title and benefits and perks, make sure you include the skills needed. And edit these to the core ones. You don't want to write a laundry list of skills that's going to scare off people or filter out good matches before they even, you even get a chance to meet them.

Second, the impact this role will have on the company. Third, what success looks like in this role. And then lastly, a compelling storytelling around your company and your mission. That's going to get people excited about joining the team. Then once you do this and start getting new cat, good candidates in, make sure you have a thoughtful and insightful interview process that identifies top performers.

To do that, it's important to identify the characteristics that make someone successful and ask interview questions that suss out whether or not candidates have these qualities. For example, when I interviewed candidates, 3 of the traits that I generally prioritize are grit, humility, and integrity, all the stuff around skills and.

And smarts, you can generally get from a person's resume or where they've worked. But these are things that, I really prioritize in the interview process. For grit, it's people who don't get discouraged when things go wrong. And even better, people who learn from the mistakes and use failures to get even more motivated to succeed.

A question that we that I find that's good to get around. This is to tell me to have them tell you about a professional failure and how they overcame it. In their answer, look for the things that the person did, but also how long they stuck at it. A person with a history of perseverance, it's that's a good indicator of performance.

Secondly, humility top performers know that they don't have all the answers and that they should learn. They should ask and learn from others. They're open to feedback and always seek opportunities to improve. A good way to get to that is to give them negative feedback about something, like during the interview or, if you give them a homework assignment, give them negative feedback on that and see how they handle it.

This can be uncomfortable, but it's really effective. And then lastly, integrity. So honesty, ethics, commitment to doing what's right for the business is essential. A good question about to get at this is to have them tell you about a time when they felt like their integrity was challenged and this can give you insight into how they think and their moral compass.

Then, as a follow up to the interviews, I often find that a thoughtful homework assignment that's relative to the work they'll be doing to be really insightful. When you're doing this, make sure the project helps you assess the skills and competencies they need for the role, and that's not just busy work.

For example, once I was hiring for a customer service lead and I had the final two to three candidates, you don't wanna ask everyone to do this 'cause it's time consuming and it's, not fair to have them do it if they're not right from the beginning. But I had the final two to three candidates work on a customer service pro process map to see one, if they understood the core fundamentals of customer service, and then two, how thorough they were.

How many steps did they include? Did they think through all the implications, or did they just do the bare minimum? Then, as a last step, I can't stress enough the importance of reference checks. It's even better if you're able to tap into your own network to find people connected to the candidate to get information about them, and then also you should speak to the contacts that they give you.

It's never a guarantee, but I generally find that if you follow these steps, you'll significantly increase your chances of finding someone great for your team.

MPD: You knew this topic was going to get me, right?

Phuong: This is near and dear to

MPD: the heart. And I think if you're in a business where the core asset at the end of the day that's going to make or break the business is the people, which is most of the time every now and then you've got a piece of IP that's so stunning that anyone can take it to market, but most of the time it's the people, anything you can do to increase probability of putting together the best team, is a big deal. If you can go from 80 percent success in hiring to 83, huge impact on outcomes. So all of these dials are worthy of tremendous attention. I want to add some things. One thing we like to do with interplay just going in order that you went the JD. Is we like to bring out the soul of the company as best as we can.

JDs are boring. They're practical. So we try to put in some language that will reverberate with people who share our kind of cultural fit. So we'll write in things like willing to run into a brick wall without a helmet on for on repeat. And that will land with the right person who that language, I don't know, fits.

And we actually have people comment on it. Now, sometimes they're just saying that to be polite, but sometimes it seems like it might be true. The last thing I just wanted to emphasize, the things you said that you're interviewing for so important to refocus on those. I was up at Harvard a week ago giving a talk to some students, and these students, they got into Harvard, they have great grades, they've checked all of the hardest boxes to check in American society.

And my message to them as we were talking about their careers and where things go from now was that look, getting into a top college gets you into the game of the top jobs, but it's not what determines outcomes. Once you're in. Once you're in that career track. Working at great startup companies or banks or whatever they choose to do.

What's going to define how they get sorted out against their peers is going to be the basic stuff. The stuff they were supposed to learn in their childhood. Integrity, as you said. Grit. Humility. It's these degrees, they're sitting there thinking, Wow, I've got a Harvard degree, the rest I'm going to go coasting.

It's the price of entry to have a pretty good degree that doesn't need to be from Harvard. And then once you're in, it becomes devalued. And what everyone starts to care about is Integrity, grit, humility. So those things you're talking about, that's what we interview for, to interplay more than the core operating skills.

Functional skills are a dime a dozen at this point. The human skills, the stuff you're supposed to learn in your childhood, are more valuable.

Phuong: Yeah, for sure. And as a employer, those are the things that's pretty harder to assess, right? You could see if someone has a CFA or, what school they went to, or where they worked and, based on their roles what skills they probably have, but these are the things that are, unique to us to a person.

They don't wear on the on their sleeve. So it's, I think if you're scientific about it, you can get a pretty good idea

MPD: and it does a huge service to the organization. If you're building, you're thinking about those ingredients when you're formulating a core team in a culture. Anyway, this is a very important topic.

It is almost consistently undervalued by founders in their first cycle or two. But when I think you get a couple more laps into this, you realize you got to get this right. It's one of the most important things out there.

Phuong: Yeah, it's one of the, one of the ways that, you separate the good companies from the great companies are the companies that make it and those that don't.

MPD: Thank you, Phuong.

Phuong: Thank you.

MPD: Thanks for listening, everybody. As always, Phuong's coming in hot and breaking it down. This topic is mission critical. I said that in the preamble here. If you feel like you're flying blind in creating a team, Get advisors and get help because while it is an art, there is a lot of opportunity to level up and be thoughtful about it, and it makes a huge difference.

Also, double clicking on the, what Phuong said, if you haven't checked out our episode on the Superman analysis, we'll put it in the show notes, please do check that out. It's a little simple tool we created internally at Interplay. It's worth every, it should be ubiquitous. Everyone should use it. And the idea is we create like a table of what the activities have to be done and who's doing them to see where the gaps are.

And the idea is that no single person is Superman. You cannot do it all. So it's about spreading the peanut butter of work around in the most intelligent and efficient way. Very valuable, simple tool. Catch you next time.

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