Too often people will say things to me like this person is so charming they’re perfect for sales? or this person went to a top university, so they must be a better coder.
The most common hiring mistakes are due to personal bias or because a candidate is intelligent but hasn’t had enough relevant experience or isnt motivated by the work you need them to do. I discovered performance-based hiring, developed by Lou Adler, which is the process I have used since.
it’s a methodical approach based on the concept that past success predicts future success. Your starting point is working out what success looks like in the job you are hiring for and what the best people do differently from average performers.
Then you look at whether they have successfully performed comparable work in a similar environment. For example, managing a 70-strong sales team doesnt mean you can build a sales team from scratch, and working for a large company with lots of resources doesnt mean you can successfully deliver in a small company where things are always changing.
If you hire somebody who has delivered the results you need in a similar environment in the past, then you know they can do the job you need them for, and they are motivated to do it.
(2) Hire top down
A common mistake new companies make is hiring lots of inexperienced people. This is usually motivated by a desire to save money but ignores the opportunity cost associated with being slowed down by the drain on your time and all the rework.
I found that hiring a few experienced people who can deliver great results autonomously works better than having a lot of inexperienced people in your team. On top of this, as a founder you can’t be an expert at everything, so you need to hire people who are better than you as soon as you can and then as Lee Iacocca said: Get out of their way?.
One of the biggest step-changes I experienced was hiring people to lead departments who knew far more than me about their field. Not only did they deliver results faster than I could, but they also hired teams for their departments better too because of their domain experience and utilising their personal networks to hire people they have worked with before.
(3) Pay top of the market
if you pay peanuts, you get monkeys. The tangible savings you make in paying less won’t make up for the intangible cost in the loss of quality. it’s often argued that startups can’t afford to pay as much as bigger companies, but I recommend paying as much as is reasonable in cash and then making up the difference in equity.