Adapt a Behaviour Based Interview Technique for Hiring
The most important cog in the wheel for any company to survive, grow and thrive is the "people". As it is said, a leader is not a leader unless he gets his first follower. So these early employees have a big role to play in transforming an entrepreneur's beliefs into reality. In this series of FounderMates' Advisor Knowledge, we cover aspects of HR for startups and SMEs; how to hire employees, motivate them and retain them. To discuss this with us, we have Ravi Sekhar, an experienced HR consultant and leader.
Ravi has spent close to 20 years in Core Human Capital Management (Talent, Culture and Capability) areas and in divergent industries and at each stage of business (startup, growth or established) - Manufacturing, Services, Hospitality, Consulting, IT Services, High Technology/Telecom Software.
He is also an intrapreneur who has established a Business Innovation Group, for an SME in Telecom Software business and incubated organizational projects.
We have divided this segment into two parts. Part 1 of the interview is below:
1. For startups getting the first few employees is the biggest challenge. How should a startup run by the founders go about hiring their first employee?
The key to a startup business is hiring people and getting the right team does 50% the job of startup.
Lack of experience of startup CEOs and founders, in particular, adds to the challenge and also enough time is not devoted to hiring.
Like the way how raising money, sales & closing deals, build product/service etc. occupies top-of-mind of the founder(s) so should attract and recruiting of talent/new hires be their top-of-mind & a priority.
While working for a startup, one of the key steps that we took towards hiring is to have the founder(s) involve in the hiring process for the first 50 employees and the mandate for the founder is to "Hire-By-Charm" and this involvement of founder played a key role to attracting and hire people.
A key step that I suggest startups take up is, to hire a full time help, at the earliest, for all transaction activities for recruitment and talent acquisition. Keep in mind, a recruitment help function like a marketing department to your hiring efforts - communicate, promote and positioning of the company/role to the current as well as generate leads for future hire.
The apprehensions of the unknown, in new hires, especially in understanding startup business, even if selected & accepted offer, head to "no-show" on the date of joining.
Spend time explaining to new hires "why" you are doing it instead of what & who you are, will able to attract the enthusiasm of the prospective hires to how "cool" the work is, a "sound understanding of business" and though a startup, yet with an "established background", how it brings "value" to investors, employees and customers. This is no different to explaining your business to investors, customers and now down to prospective employees as well.
One can go to the extent of having the prospective hires come over to work after a weekend or a working day and experience the new world of work at the same time you get an opportunity to understand their skills etc. and mutually get to know each other better and a possibility of a better hire.
All of these give new hires a comforting feeling towards the nature of work, business and a better appreciation for the new job/startup. Many hiring interventions can be thought of however, the key is to have founders take a keen and active role in hiring.
In fact, going a step further I recommend to all new startups to list out and make efforts to shortlist talent/people before and while raising your first fund and hire them at the proper time.
2. Startups and SMEs can afford to pay very small as compared to corporations. How can employees be motivated to continue? How should they be compensated?
A BIG MYTH: PAY IS THE BIGGEST FACTOR THAT MOTIVATES PEOPLE TO GO TO WORK
Survey after survey shows that money is not the biggest motivator. Also Pay is a subjective issue and more often than not, the requirement vary depending on whom you are hiring and at what stage the startup is; the new incumbent is and also the age and social backdrop of the new hire, location of the startup etc.
To attract and retain key talent, startups also offer basic salary and stock options. This is like gambling for some and most people won't find it interesting option while it suits others who are willing to take equity for various personal reasons including lifestyle stages, possibility of an opportunity to grow into a leadership role at the startup etc.
What did work most often - be it at startup, growth or established phase are top three factors:
a) Variety of Career Opportunities - Branching out from their area of expertise and performing in different organization projects like on a marketing project, a pre-sales hire getting into a sales role or customer service etc. - in a dynamic environment, gaining valuable experience and rapid growth is far more intimidating to an employee.
b) Alignment with startup/brand - Having been there as Partner-in-Progress and the satisfaction of "Been there, Built that" is a strong alignment factor and a key motivation. Most often employees love the symbolic association and great sense of belongings to what they have built and excited to work.
c) Intrinsic Motivation: Challenges, curiosity, cooperation and recognition are the biggest triggers and people are best motivated to work and more so when in comparison amongst peers.
If one were to sum up the above the key tenets are - the experience is memorable, built reputation and highly regarded and an authentic relationship to the company and brand are key motivation factors.
Some of the vitamins that I suggest to startup business (while the above top the list) are -
a) Satisfying career path and participating opportunities in lead projects
b) Accord due respect as individual and Pat on the back even if the job is partially well done
c) A sense of purpose - have the employee understand how his/her piece of work is impacting and contributing to the greater good.
d) Autonomy and ownership of his/her work. Quote: Uncle Ben - With great power come greater responsibility.
e) Laundry list of benefits/perks - A high five, vacation tours, team outings, gym memberships, subsidized rent etc. for boosting morale.
f) Quality time with founders - communicate, communicate and communicate
g) Not to forget Vitamin M - Defer compensation in line with increased business progress or personal achievement - equity or performance incentive etc.
The most important guideline to motivation and something that a startup stands at an advantage to do it - Customize it as per the needs of the individual employee and base it as an award than a reward criterion.
3. We often hear the term "organizational culture". How is it relevant to startups and SMEs? How should one define an organizational culture?
The organizational culture of a startup is not just about working in cramped office spaces, lifestyle of long yet flexible working hours, TGIF, happy hours, table-hockey games and Dominos Pizzas. It's more about how you work together.
It's about shared vision, values, focus and enthusiasm to get the business off the ground. The new world of work driven by "organization culture" in startups has so much impact that it is also adapted as "startup culture" even in larger organizations. It is definitely not a written policy in an employee or business manual. It is in the mind of everyone, felt and experienced in what we do, why it matters and is the DNA character profile that binds people together and is often identified with as the personality of the startup.
IMO the first germ of seeds are sowed by the founder(s) themselves. It is the founder(s) and the first early employees who have a greater understanding of the DNA that they would want to build in the company, far more passionate, determined, flexible, horizon focused and lead change with the stroke of a pen. Hence the greater responsibility lies with the founders and they will be able to do so by winning their way by the charm and leading by example.
This foundation footer of Culture DNA primarily rests on the core values that are created, articulated, shared, sticking to it and reinforce in every aspect of a relationship with - investors, customers and employees. Some of the DNA makeup to the cultural definition is shared purpose, freedom of speech, communication, trust, decision making, collaboration, selfless etc.
To a founder(s), criticality is also about "imbibing it" with immediate effect, take expert help where required, maintain authenticity and walk the talk. The bottom line mandate of startup/any culture are to make work comfortable to one and all.
4. We also hear the phrase "Hire fast, fire faster" in startups and SMEs. What is your take on that? When do you realize that it is time to let go of an employee and how should founders communicate that?
I subscribe to the idea that you should constantly be on the lookout for talent, mind you, recruitment and talent acquisition are two different things.
As your startup idea goes back and forth, you never know which skill, knowledge or attitude is required when. Identify talent, engage them and if you come across great people, recruit them and figure out a way on how to use them.
Caveat: At times you should be having deep pockets do something like this.
The success of your startup is in direct correlation to the talent that you have. So when you get that extra-ordinary talent, grab them at the first given opportunity
And again to me it is not about whether we spend one hour on the Caf?‚© Coffee day or on the phone, interviewing a shortlist, I would rather be happy to hire a 70% fit to a job spending 15-30 minutes to "hire slow - waiting for my 90% fit". It is important to take a risk and as founder you are should have a bias at it too. So go for it now! Hire fast.
However precursor to the above is - Define your Startup personality and adapt Behaviour Based Interview Technique to any traditional interviewing techniques.
Again, if you desire to build a great company, do yourself a favor - fire fast when one of your "hire" isn't working. Mind you it is not as easy as said. The toxic emotion that it undoes on to you is very intimidating.
Preserving your startup greatness is critical and someone that is not working, need to be let go of. Do not delay taking such a decision. It may make things worse and lead to destroying the overall value and health of your startup.
Key word of caution here is - has a greater amount of preparation gone into this, check legal framework and above all do it with "empathy".
One of the unconventional wisdom that I personally followed, all my life - If an employee is fired in the first six months say, then it is a recruitment error and say, after a year of his joining then it is a mistake on the part of the training function.
My two cents for you Hire and Fire for your vision.
Concluding, recognizing the role of HR in shaping the future of startups is crucial and by HR I mean it is people. And People are not the most important assets. The Right people are the only and most important assets.
Ravi has spent close to 20 years in Core Human Capital Management (Talent, Culture and Capability) areas and in divergent industries and at each stage of business (startup, growth or established) - Manufacturing, Services, Hospitality, Consulting, IT Services, High Technology/Telecom Software.
He is also an intrapreneur who has established a Business Innovation Group, for an SME in Telecom Software business and incubated organizational projects.
We have divided this segment into two parts. Part 1 of the interview is below:
1. For startups getting the first few employees is the biggest challenge. How should a startup run by the founders go about hiring their first employee?
The key to a startup business is hiring people and getting the right team does 50% the job of startup.
Lack of experience of startup CEOs and founders, in particular, adds to the challenge and also enough time is not devoted to hiring.
Like the way how raising money, sales & closing deals, build product/service etc. occupies top-of-mind of the founder(s) so should attract and recruiting of talent/new hires be their top-of-mind & a priority.
While working for a startup, one of the key steps that we took towards hiring is to have the founder(s) involve in the hiring process for the first 50 employees and the mandate for the founder is to "Hire-By-Charm" and this involvement of founder played a key role to attracting and hire people.
A key step that I suggest startups take up is, to hire a full time help, at the earliest, for all transaction activities for recruitment and talent acquisition. Keep in mind, a recruitment help function like a marketing department to your hiring efforts - communicate, promote and positioning of the company/role to the current as well as generate leads for future hire.
The apprehensions of the unknown, in new hires, especially in understanding startup business, even if selected & accepted offer, head to "no-show" on the date of joining.
Spend time explaining to new hires "why" you are doing it instead of what & who you are, will able to attract the enthusiasm of the prospective hires to how "cool" the work is, a "sound understanding of business" and though a startup, yet with an "established background", how it brings "value" to investors, employees and customers. This is no different to explaining your business to investors, customers and now down to prospective employees as well.
One can go to the extent of having the prospective hires come over to work after a weekend or a working day and experience the new world of work at the same time you get an opportunity to understand their skills etc. and mutually get to know each other better and a possibility of a better hire.
All of these give new hires a comforting feeling towards the nature of work, business and a better appreciation for the new job/startup. Many hiring interventions can be thought of however, the key is to have founders take a keen and active role in hiring.
In fact, going a step further I recommend to all new startups to list out and make efforts to shortlist talent/people before and while raising your first fund and hire them at the proper time.
2. Startups and SMEs can afford to pay very small as compared to corporations. How can employees be motivated to continue? How should they be compensated?
A BIG MYTH: PAY IS THE BIGGEST FACTOR THAT MOTIVATES PEOPLE TO GO TO WORK
Survey after survey shows that money is not the biggest motivator. Also Pay is a subjective issue and more often than not, the requirement vary depending on whom you are hiring and at what stage the startup is; the new incumbent is and also the age and social backdrop of the new hire, location of the startup etc.
To attract and retain key talent, startups also offer basic salary and stock options. This is like gambling for some and most people won't find it interesting option while it suits others who are willing to take equity for various personal reasons including lifestyle stages, possibility of an opportunity to grow into a leadership role at the startup etc.
What did work most often - be it at startup, growth or established phase are top three factors:
a) Variety of Career Opportunities - Branching out from their area of expertise and performing in different organization projects like on a marketing project, a pre-sales hire getting into a sales role or customer service etc. - in a dynamic environment, gaining valuable experience and rapid growth is far more intimidating to an employee.
b) Alignment with startup/brand - Having been there as Partner-in-Progress and the satisfaction of "Been there, Built that" is a strong alignment factor and a key motivation. Most often employees love the symbolic association and great sense of belongings to what they have built and excited to work.
c) Intrinsic Motivation: Challenges, curiosity, cooperation and recognition are the biggest triggers and people are best motivated to work and more so when in comparison amongst peers.
If one were to sum up the above the key tenets are - the experience is memorable, built reputation and highly regarded and an authentic relationship to the company and brand are key motivation factors.
Some of the vitamins that I suggest to startup business (while the above top the list) are -
a) Satisfying career path and participating opportunities in lead projects
b) Accord due respect as individual and Pat on the back even if the job is partially well done
c) A sense of purpose - have the employee understand how his/her piece of work is impacting and contributing to the greater good.
d) Autonomy and ownership of his/her work. Quote: Uncle Ben - With great power come greater responsibility.
e) Laundry list of benefits/perks - A high five, vacation tours, team outings, gym memberships, subsidized rent etc. for boosting morale.
f) Quality time with founders - communicate, communicate and communicate
g) Not to forget Vitamin M - Defer compensation in line with increased business progress or personal achievement - equity or performance incentive etc.
The most important guideline to motivation and something that a startup stands at an advantage to do it - Customize it as per the needs of the individual employee and base it as an award than a reward criterion.
3. We often hear the term "organizational culture". How is it relevant to startups and SMEs? How should one define an organizational culture?
The organizational culture of a startup is not just about working in cramped office spaces, lifestyle of long yet flexible working hours, TGIF, happy hours, table-hockey games and Dominos Pizzas. It's more about how you work together.
It's about shared vision, values, focus and enthusiasm to get the business off the ground. The new world of work driven by "organization culture" in startups has so much impact that it is also adapted as "startup culture" even in larger organizations. It is definitely not a written policy in an employee or business manual. It is in the mind of everyone, felt and experienced in what we do, why it matters and is the DNA character profile that binds people together and is often identified with as the personality of the startup.
IMO the first germ of seeds are sowed by the founder(s) themselves. It is the founder(s) and the first early employees who have a greater understanding of the DNA that they would want to build in the company, far more passionate, determined, flexible, horizon focused and lead change with the stroke of a pen. Hence the greater responsibility lies with the founders and they will be able to do so by winning their way by the charm and leading by example.
This foundation footer of Culture DNA primarily rests on the core values that are created, articulated, shared, sticking to it and reinforce in every aspect of a relationship with - investors, customers and employees. Some of the DNA makeup to the cultural definition is shared purpose, freedom of speech, communication, trust, decision making, collaboration, selfless etc.
To a founder(s), criticality is also about "imbibing it" with immediate effect, take expert help where required, maintain authenticity and walk the talk. The bottom line mandate of startup/any culture are to make work comfortable to one and all.
4. We also hear the phrase "Hire fast, fire faster" in startups and SMEs. What is your take on that? When do you realize that it is time to let go of an employee and how should founders communicate that?
I subscribe to the idea that you should constantly be on the lookout for talent, mind you, recruitment and talent acquisition are two different things.
As your startup idea goes back and forth, you never know which skill, knowledge or attitude is required when. Identify talent, engage them and if you come across great people, recruit them and figure out a way on how to use them.
Caveat: At times you should be having deep pockets do something like this.
The success of your startup is in direct correlation to the talent that you have. So when you get that extra-ordinary talent, grab them at the first given opportunity
And again to me it is not about whether we spend one hour on the Caf?‚© Coffee day or on the phone, interviewing a shortlist, I would rather be happy to hire a 70% fit to a job spending 15-30 minutes to "hire slow - waiting for my 90% fit". It is important to take a risk and as founder you are should have a bias at it too. So go for it now! Hire fast.
However precursor to the above is - Define your Startup personality and adapt Behaviour Based Interview Technique to any traditional interviewing techniques.
Again, if you desire to build a great company, do yourself a favor - fire fast when one of your "hire" isn't working. Mind you it is not as easy as said. The toxic emotion that it undoes on to you is very intimidating.
Preserving your startup greatness is critical and someone that is not working, need to be let go of. Do not delay taking such a decision. It may make things worse and lead to destroying the overall value and health of your startup.
Key word of caution here is - has a greater amount of preparation gone into this, check legal framework and above all do it with "empathy".
One of the unconventional wisdom that I personally followed, all my life - If an employee is fired in the first six months say, then it is a recruitment error and say, after a year of his joining then it is a mistake on the part of the training function.
My two cents for you Hire and Fire for your vision.
Concluding, recognizing the role of HR in shaping the future of startups is crucial and by HR I mean it is people. And People are not the most important assets. The Right people are the only and most important assets.