Archive for the ‘General’ Category

What is a ‘Celebrity CEO’?  When I use the term, I mean “business CEOs whose names are widely known to the general population.”

In my last post, I observed that (at least today, at the largest American-based companies) celebrity CEOs seem to be more prevalent among high-tech companies.  Is there something about high-tech that makes it fertile ground for celebrity CEOs?  I think there is, but it’s more a matter of timing (and today’s business climate) than something inherent in technology companies.

The most obvious class of celebrity CEOs is the Visionary Founder.  Generally, these are people who, through their innovations, have transformed an industry (or created one).  In many cases, their transformations have been much broader.  Following are the famous CEOs people think of in this class:

• Bill Gates – Microsoft
• Steve Jobs – Apple
• Jeff Bezos – Amazon
• Mark Zuckerberg – Facebook

Looking back to the list I posted last time, a few of the high-tech CEOs on that list also fit the Visionary Founder description:

• Michael Dell – Dell
• Larry Ellison – Oracle
• Larry Page – Google

I think the Visionary Founder is most often seen in industries that are new or are evolving quickly.  When new companies grow explosively from humble beginnings to huge influence, their founders often become the face of that new sector.  That’s true of high-tech today and has been true for several decades.  The earliest examples included William Hewlett and David Packard, founders of Hewlett-Packard. 

That kind of growth is less common in other sectors today.  However, looking back 100 years or more, we see that a similar pattern of Visionary Founders in the emerging industries of those days:

• Andrew Carnegie – Carnegie Steel Company
• Henry Ford – Ford Motor Company
• Conrad Hilton – Hilton Hotels
• J.P. Morgan – J. P. Morgan and Company
• John D Rockefeller – Standard Oil

We can find similar examples from the second half of the 20^th century:

• Mary Kay Ash – Mary Kay Cosmetics
• Ray Kroc – McDonalds
• Ralph Lauren – Polo and Ralph Lauren
• Ted Turner – CNN
• Sam Walton – Wal-Mart

Today’s celebrity CEOs aren’t isolated to new business sectors.  We’ve seen quite a few others in recent years:

• Giorgio Armani – Armani
• Howard Schultz – Starbucks
• Phil Knight – Nike
• Richard Branson – Virgin Records, Virgin Atlantic Airways and dozens of others
• Oprah Winfrey – Harpo Productions and Oprah Winfrey Network

All of these CEOs founded and built companies that transformed their industries.  Next time, we’ll explore some of the other “categories” of celebrity CEOs.

For now… I’ll leave you with this thought:
 
Visionary Founders can become famous as their companies grow. 

That’s common (but not limited to) in emerging industries, which is why we see so many today in high-technology companies.

Do you know who these people are?  I consider myself fairly well-read about business, but (without getting help) I could only identify the blue ones.

1. Michael T. Duke
2. Rex W. Tillerson
3. John S. Watson
4. James J. Mulva
5. Michael J. Williams
6. Jeffrey R. Immelt
7. Warren E. Buffett
8. Daniel F. Akerson
9. Brian T. Moynihan
10. Alan R. Mulally
11. Meg Whitman
12. Randall L. Stephenson
13. James Dimon
14. Vikram S. Pandit
15. John H. Hammergren
16. Ivan G. Seidenberg
17. Robert H. Benmosche
18. Samuel J. Palmisano
19. George S. Barrett
20. Charles E. Haldeman Jr.

How about this list?  Again, the ones I knew are highlighted in blue:

1. Meg Whitman
2. Sam Palmisano
3. Michael Dell
4. Steve Ballmer
5. Tim Cook
6. John Chambers
7. Paul Otellini
8. Greg Brown / Sanjay Jha
9. Larry Ellison
10. Larry Page

The first list shows the CEOs of the top 20 Fortune 500 companies.

The second list shows the CEOs of the ten largest U.S.-based technology companies (ranked by 2009 revenue).

I recognized 80% of the second list, but only 25% of the first list.  Why is that?  Are Celebrity CEOs more prevalent in the technology industry?  Are there other factors involved?

I’ll explore possible explanations in my next post.

For now… I’ll leave you with this thought:

Celebrity CEOs seem to be more common for technology companies.

Here are the complete lists, with company names.

1. Michael T. Duke – WalMart
2. Rex W. Tillerson – Exxon Mobil
3. John S. Watson – Chevron
4. James J. Mulva – Conoco Philips
5. Michael J. Williams – Fannie Mae
6. Jeffrey R. Immelt – GE
7. Warren E. Buffett – Berkshire Hathaway
8. Daniel F. Akerson – General Motors
9. Brian T. Moynihan – Bank of America
10. Alan R. Mulally – Ford
11. Meg Whitman – Hewlett Packard
12. Randall L. Stephenson – AT&T
13. James Dimon – J.P. Morgan Chase
14. Vikram S. Pandit – Citibank
15. John H. Hammergren – McKesson
16. Ivan G. Seidenberg – Verizon
17. Robert H. Benmosche – AIG
18. Samuel J. Palmisano – IBM
19. George S. Barrett – Cardinal Health
20. Charles E. Haldeman Jr. – Freddie Mac

1. Meg Whitman – Hewlett Packard
2. Sam Palmisano – IBM
3. Michael Dell – Dell
4. Steve Ballmer – Microsoft
5. Tim Cook  – Apple
6. John Chambers – Cisco
7. Paul Otellini – Intel
8. Greg Brown / Sanjay Jha – Motorola
9. Larry Ellison – Oracle
10. Larry Page – Google

Continuing from my last post, let’s turn to theatre and sports, looking back at my thoughts from last quarter and looking forward to the rest of this year.

Musical Theatre

Summer is typically a quiet season for new shows opening on Broadway.  Like the movie industry (which clusters the release of the most promising Academy Award candidates at the end of the year), the theatre industry often clusters the best Tony Award candidates of the year at the end of the “season” (which typically concludes near the end of April).

There have been only a few significant musical openings so far this season:

• Spider-Man, Turn Off The Dark – I’ve commented on this one before: here and here.
• Follies – This revival of Stephen Sondheim’s Follies has received rave reviews.  It features an incredible cast: Bernadette Peters, Elaine Paige, and Danny Burstein.

Last week brought a much-anticipated new play, The Mountaintop, which provides a look at the assassination of Dr. Martin Luther King, Jr.  It is a two person play with immense star power: Samuel L. Jackson and Angela Bassett.  It opened to mixed reviews.

Over the next three months, there are quite a few openings that make me wish I lived closer to New York:

• Plays and Play Revivals
  • Relatively Speaking – An intriguing collection of three one-act comedies with big name writers: Ethan Coen, Elaine May and Woody Allen.
  • Chinglish – A new comedy by David Henry Hwang “about the challenges of doing business in a culture whose language and ways of communicating are worlds apart from our own.”
  • Private Lives – The 8^th Broadway production of Noel Coward’s brilliant comedy (which opened originally in 1931), starring Kim Cattrall and Paul Gross.

• New Musicals
  • Bonnie and Clyde – Most people are familiar with this story of two country kids who become wanted criminals.  It’s written by frequent Broadway composer Frank Wildhorn.  He is frequent, but I can’t understand why he keeps getting produced.  Nearly everything he’s written has been unsuccessful and those that are successful aren’t very good: Jekyll and Hyde (1543 performance), The Scarlet Pimpernel (772), The Civil War (61), Dracula (157), and Wonderland (33).  I’m rooting for this one to surprise me – its Music Director is John McDaniel (who was my son’s boss when he worked on Catch Me If You Can earlier this year) and one of the principals is Seattle native Louis Hobson.
  • Lysistrata Jones – This risky new show is based on Lysistrata, a 2400 year-old play by Aristophanes.  Lysistrata is a comedy about women who withhold sex in order to inspire their husbands to negotiate an end to the current war.  This new production transports the story to present day Athens, Georgia, focusing on a group of cheerleaders who refuse to sleep with the members of the basketball team until they start winning games.

• Musical Revivals
  • Godspell – Stephen Schwartz’s rock musical returns to Broadway in its first revival (after winning a Tony-award for Best Original Score in its 527 performance run in 1976-77).
  • On a Clear Day You Can See Forever – The original production (by Burton Lane and Alan Jay Lerner) was poorly received on Broadway in 1965. The first revival features Harry Connick Jr. and a new book written by Peter Parnell (author of the play The Cider House Rules based on the novel by John Irving, and of much of The West Wing, with Aaron Sorkin).
  • Porgy and Bess (not until January) – George Gershwin’s masterpiece returns to Broadway for the 8^th time.  This production features Broadway’s greatest current actress, the incomparable four-time Tony award winner: Audra McDonald.

• Special Events
  • Hugh Jackman, Back on Broadway – Most people know Jackman as a movie star, especially for playing Wolverine in the X-Men series.  Fewer people know that he’s a genuine star as a stage actor too.  He won a Tony Award (and every other award) for his portrayal of Peter Allen in The Boy from Oz. He has also starred in Oklahoma in London and on Broadway in 2009 in A Steady Rain. This limited run concert starts this month and will probably sell out every show.
  • An Evening with Patti LuPone and Mandy Patinkin – A few misguided people might dispute my statement above that Audra is “Broadway’s greatest current actress,” choosing Patti LuPone instead.  Those people are wrong.  Still, Patti is a major star, with two Tony awards.  This concert, which opens in November, reunites these two stars for the first time since their joint Tony-winning performances in Evita.

Sports

In July, I made two predictions about sports labor disputes:

• In my opinion, the NFL battle will be resolved, probably within the next ten days.
  • On July 25^th, the NFL and the NFL Players Association announced their new collective bargaining agreement.
• The NBA looks to be positioned for a long and ugly stand-off.  It wouldn’t surprise me if the entire season was cancelled.
  • Several weeks of games have already been cancelled and the parties don’t seem much closer to an agreement.  I’ll stand by what I said then: it still seems likely that the season will be cancelled.

In baseball, my predictions (which I had thought were low-risk) were pretty poor:

• NL Playoffs: Philadelphia, Milwaukee, San Francisco, and Atlanta
• AL Playoffs: Boston, Cleveland, LA Angels, and the evil NY Yankees

I got two of four in the National League; one of four in the AL.  That’s pathetic.

• World Series: Philadelphia over Boston in 6 games.

The final four teams are Milwaukee, St. Louis, Texas, and Detroit, so I’m already 100% wrong there.

Since I did so well in baseball, I’ll turn my sights to the NFL.  About one-third through the season, here are my picks for the playoffs:

• AFC East – New England
• AFC North – Pittsburgh
• AFC South – Tennessee
• AFC West – San Diego
• AFC Wild Cards – Buffalo, Baltimore
• NFC East – New York Giants
• NFC North – Green Bay
• NFC South – New Orleans
• NFC West – San Francisco
• NFC Wild Cards – Detroit, Atlanta

• AFC Championship – San Diego over Baltimore
• NFC Championship – New Orleans over Green Bay
• Super Bowl – San Diego over New Orleans

For now…I’ll leave you with this thought:

Don’t ever use my sports predictions as the basis for any decision.

Instead, feel free to use my Broadway theatre info as the basis for ticket-buying.

Last week, Hewlett-Packard removed its CEO, ousting Léo Apotheker (who was hired less than a year ago) and replaced him with Meg Whitman (former CEO of eBay).  It’s the latest in a string of embarrassments for the HP Board of Directors.  [I’m not alone in this assessment; after the announcement CNN asked if HP’s Board was the “worst ever”]

Here’s some background on HP’s CEO travails over the past decade:

• Carly Fiorina was hired as CEO in 1999, with quite a bit of fanfare as the first woman to lead a Fortune 20 company.  Fiorina had a tumultuous tenure in this position, with much of the battling focused on her acquisition attempts.  She tried to acquire EDS (a computer services company) in 2000, but gave up in the face of resistance from HP shareholders.  In 2002, she led the acquisition of Compaq (a leading personal computer maker), prevailing over shareholder objections in yet another difficult battle.  Fiorina was finally forced out as CEO in 2005, in a departure that was handled awkwardly by HP’s Board.
• Mark Hurd (from NCR) was brought in as CEO in 2005.  He lived up to his reputation as an aggressive (even ruthless) cost-cutter.  He laid off 10% of HP’s employees soon after taking over.  In the summer of 2010, in another awkwardly handled public dispute, the HP board forced Hurd to resign.  This followed an investigation from which HP’s Board concluded that he had acted inappropriately in a situation that resulted in a sexual harassment complaint against him.  [I wrote about this in this blog last year.]
• Léo Apotheker was named CEO in September 2010.  Apotheker had been forced out as CEO of SAP in February 2010. During his tenure as HP’s CEO, HP stock lost about 40% of its value.  Much of that decline came in August, when HP announced that it was dropping its tablet computer business and was looking to sell (or spin-off) its PC division.

So, now it’s Meg Whitman, former CEO of online auction giant eBay.  She joined eBay very early in its history and built a strong executive team that helped drive its success.  However, the company went public only 6 months after Whitman was hired, so its success was clearly already well underway before she arrived.

Whitman oversaw tremendous growth in her ten years at eBay.  The acquisitions of PayPal and the European auction site iBazaar helped fuel that growth.  However, Whitman had at least one highly visible strategic misstep at eBay.  The 2005 acquisition of Skype (for $4.1 billion) was never successfully integrated and in 2008 Skype was sold for $2.75 billion. 

What does Whitman bring to HP?  That’s not clear yet (at least to me).  Her experience at eBay doesn’t seem directly applicable to addressing HP’s needs.  There’s no question that eBay was (and still is) one of the shining successes of the internet age.  She presided over a growing, thriving internet company during the internet boom.  How much of that was her doing?  And, more importantly, which of her skills will matter at HP?

eBay is a consumer-to-consumer business.  Whitman has very little enterprise business experience and she has no hardware experience.  She also has no experience running a services business.

That doesn’t seem to bode well.  However, with HP stock at its lowest point in more than five years, it’s also likely that, no matter what she does, it will look like success.

For now…I’ll leave you with this thought:
 
Here’s one thing the HP Board is good at – CEO severance packages:

• Fiorina: between $21 million and $42 million [Source: CNNMoney]
• Hurd: $12.2 million in cash (and he forfeited about $14 million in stock, in a settlement that followed his hiring by Oracle after he left HP) [Source: USAToday]
• Apotheker: at least $7.2 million cash + $18 million stock  [Source: CNNMoney]

It’s officially summer here in Seattle (and everywhere else in the northern hemisphere).  The 4^th of July holiday (Independence Day in the U.S.) is behind us and warm weather has finally arrived.

In January, I wrote about some things that I’d be tracking throughout the year and in April I looked back at the first quarter of the year.  Now it’s time to review the first half of the year, while also looking forward to the rest of 2011.

Business Intelligence Industry

One big recent trend has been the continued growth of Microsoft BI.  You might ask “What is Microsoft BI?” since many people don’t even realize Microsoft has a BI offering.  That’s part of their problem – Microsoft’s message is incoherent and their products are disjointed.  In spite of those problems, they’re gaining some traction because the functionality they offer is pretty strong.  Microsoft’s annual Worldwide Partner Conference is taking place this week in Los Angeles and I expect there will be some big BI announcements there.   I’ll explore this topic (including their announcements from the conference) in an upcoming post dedicated to MS BI. 

Meanwhile, SAP Business Objects is primed to catch up to Oracle and IBM Cognos with Business Objects 4, a new major release of their flagship BI suite.  Maybe they’ve already released it – maybe it’s coming soon.  Sadly, I can’t tell.  Go ahead – use your search engine and try to figure it out.  Reports from earlier this year indicate that it would be released at SAP’s Sapphire conference in May.  Since I didn’t attend that conference and I can’t find a release announcement online, I just can’t tell.  It’s a terrible job of marketing and publicity (even worse than Microsoft BI).

Oracle

Oracle announced its fiscal Q4 financials and (just like last quarter) the results were strong.  This marked Oracle’s first ever quarter of $10B in total revenue and $1B in applications revenue.  Oracle continues to be fairly quiet and subdued about Fusion Applications (the next generation of ERP/CRM offerings).  Fusion continues to be delayed – it’s still not generally available – but Oracle continues to tout its promise and its success with early adopters.  I’m still skeptical.

On the acquisition front, Oracle is again being uncharacteristically quiet.  After just one acquisition in Q1, Oracle made only a single pickup in the second quarter.  In June, Oracle announced the acquisition of FatWire Software, a web content software provider.  What’s going on with Oracle?  After nine acquisitions in 2010, the pace has slowed to a crawl.  At the Q4 earnings call, Oracle’s executives stated their belief that many companies were not overvalued and that they would not overpay to acquire them,  We’ll wait and see how long that remains true.

Musical Theatre

The Tony Awards were presented on June 12.  The big winner was The Book of Mormon, which took home 9 Tony Awards, the most of any show since The Producers won a record 12 in 2001.  Of personal interest to me was Norbert Leo Butz winning his second Tony (Leading Actor in a Musical) for his performance in Catch Me If You Can.

Spider Man: Turn Off the Dark finally opened in mid-June.  It had gone on hiatus for some retooling and script doctoring.  The reviews upon its return were better than the reviews from earlier this year, but still not very good.

Sports

Not much has changed on the sports labor front since I posted in April.  Will the threatened labor disputes in professional football and basketball result in cancelled games (or even entire cancelled seasons)?  The NFL players have been locked out, in a labor battle with the NFL owners since April.  Meanwhile, the NBA has entered its own labor battle and the 2011-2012 season looks to be in jeopardy.   In my opinion, the NFL battle will be resolved, probably within the next 10 days.  The NBA, on the other hand, looks to be positioned for a long and ugly stand-off.  It wouldn’t surprise me if the entire season were cancelled.

The Major League Baseball season is in full swing.  Notable stories of the year:

• Many of last year’s losers are respectable in 2011
  • Seven teams lost more than 90 games in 2010, all with winning percentages of .426 or worse.
  • Four of those seven – Washington Nationals, Pittsburgh Pirate, Arizona Diamondbacks, and Cleveland Indians are currently above .500.  That’s a tremendous turn-around for teams that were expected to be pretty bad.  In addition, the Seattle Mariners (who were also terrible in 2010) had been playing around .500 until a recent losing streak.
• The Philadelphia Phillies look like the team to beat.  Their pitching (especially starting pitching) is dominant.  Still, the Atlanta Braves look like they’ll challenge the Phillies for the NL title.
• Derek Jeter, a guaranteed Hall of Fame player who is paradoxically also one of the most overrated players in baseball, reached 3000 career hits – the 28^th major league player to achieve that milestone.  Soon, I’ll write a post about how greatness can be overrated.

Here are my baseball predictions (with very little risk taking):

• NL Playoffs: Philadelphia, Milwaukee, San Francisco, and Atlanta
• AL Playoffs: Boston, Cleveland, LA Angels, and the evil NY Yankees
• World Series: Philadelphia over Boston in 6 games.

For now…I’ll leave you with this thought:

Enjoy the summer!

The whole interview process is done – the candidate has gone home long ago, you’ve debriefed with everyone and gotten written feedback, and you’ve checked references.  It’s time for a decision.  How do you avoid making a mistake?

There’s no guarantee, of course, but there are some guidelines I try to follow.

• Identify impostors

Lots of people are exceptional interviewers, but marginal employees (or worse).  Did you ask for enough specific examples (and probe for additional details) to ensure that you’re hiring someone with the experience she claims to have?  Did you check references to get independent confirmation of that experience?

• Consider ability to handle stress

What are the demands of the position you’re filling?  Is it high pressure?  Are long work hours expected?  Will there be travel commitments?  Is weekend work required?

You know your company and you know what you want this new hire to do.  Make sure you asked the right questions to give you confidence that the candidate is up to the expectations.

• Anticipate company “culture fit”

This is another “you know your company” consideration.  How does your team fit together?  What level of formality is typical?  How do people address each other?  What are your philosophies on spending money (for equipment, for training, for travel, for bonuses)?

Again, did you ask the right questions to gauge how well this new candidate will fit in?  Equally important, did you convey an accurate picture, so he can decide if your position is a good fit for him?

• Be willing to take risks, but know what they are

In the end, there are no certainties in hiring.  Every candidate has shortcomings and risks.  Even if you have a candidate who seems perfect, there are risks – sometimes someone with all the necessary skills and experience is actually overqualified.  If so,   she might be likely to get bored and not be content in this position.

Your job as the hiring manager is to take known risks, rather than to be surprised.  Sometimes, you’ll take a chance on someone who is promising, but will need to grow into the position.  Sometimes, you may choose someone who has had spectacular failure or a run of bad luck in recent positions.

After all of that, go for it!  Extend the offer and welcome your new employee onto the team!

For now…I’ll leave you with this thought:

The entire hiring process can be tricky and may sometimes seem overwhelming.  Don’t be discouraged.

After you (and your team) have interviewed a candidate, how do you decide whether to make a job offer?

• Debrief with everyone on the interview team

Many times, this takes place in an “official” debrief meeting, bringing everyone together in the same room to share their thoughts.  There are several benefits to this approach.  A comment from one interviewer may trigger a reaction from someone else, allowing patterns to emerge.

“The candidate had trouble recalling details of Project X.”
“You know – I noticed the same thing when she talked about Project Y.”

The converse can happen, too – one impression could be negated by someone else’s feedback.

“I’m concerned about how he might react to pressure, because of Example A.”
“I also wondered about that, so I probed deeper and learned enough to alleviate my doubts.”

One big caveat here: don’t allow the most vocal (or most senior) interviewers to dominate the conversation or intimidate others.  You included everyone in the interview team for a reason (I hope!).  Make sure you obtain everyone’s input.

Getting everyone together in a meeting may not be practical.  If it’s not, make sure you still find a way to get explicit, direct feedback from everyone on the interview team.  Sometimes a hybrid approach works well: get unbiased feedback from each interviewer separately and then get everyone together for a round-table discussion of the candidate.

• Request an explicit “Hire / No Hire” recommendation from each interviewer

Don’t rate the candidate on a scale from 1 to 5 or 1 to 10 or 1 to anything else.  Ask each interviewer for a binary decision: If it were up to you, would you hire or not hire this person?

There is some room for caveats and conditions.  It’s okay, for example, to say “Hire, if Thomas determines that his problem solving skills are strong enough” or “Hire, if a reference check confirms that he has built teams that worked together effectively.”

• Check references

This can be valuable and enlightening, but most people do it poorly.  Candidates will only provide references who will say glowing things about them.  Your job is to cut through this obvious bias and elicit useful information.  Avoid questions where the right answer is obvious.  Don’t ask: “Rate the candidate on a scale of 1 to whatever.”  I promise that the scores will all be high, but you won’t learn anything.  Don’t ask cliché questions like “greatest strength / weakness?”

Instead ask questions that will help determine the candidate’s ability to do the job.

• Describe a situation where the team he was leading encountered a serious problem and explain how he overcame it.
• Give an example of how she managed a difficult employee.
• Explain situations when you think he’s more effective working as an individual versus when he’s more effective as a member of a team.

In the end, you (the hiring manager) have the final decision.  I’ve worked with teams where everyone needs to vote “Yes” on the hire / no hire decision, but I don’t recommend that.  Ultimate responsibility lies with the hiring manager.

For now…I’ll leave you with this thought:

Consider input from the entire interview team, but don’t give “veto power” to them.

When a hiring manager (or a recruiting manager) brings a candidate in for a round of interviews, one of the most important pre-interview tasks is to decide who will interview the candidate.  In almost all cases, the hiring manager and someone from HR are involved, for reasons that are (I hope) obvious.  Who else?

Remind yourself of what you’re trying to accomplish: Is this candidate the best person to do the job you’re trying to fill?  Who is qualified to help make that judgment?

In addition to assessing the candidate, it’s important to recognize another function of the interview process: the fact that the candidate is making a decision about your company, as well.  You want to consider that as you compose the interview team.  You should expose the candidate to a cross-section of the co-workers she would have.  In addition, you want to present your organization favorably – part of the interview process should be a “recruiting pitch” – not forced or contrived, but legitimately and honestly highlighting the benefits of joining your team.

With those considerations, who should be included on the team (and what are they expected to accomplish)?

• Potential peers, especially senior co-workers

If you’re hiring a software developer, these are senior engineers on the same team.  If you’re hiring a sales rep or a sales consultant, this is one of your best sales reps or sales consultants.

A key objective of potential peers is to assess the relevant skills for the job.  Give the developer candidate a programming task or a problem-solving exercise.  Ask a sales candidate to make a presentation, as he would to a potential customer.  Ask a potential QA engineer to design a test plan or a set of test cases.  Give a writing task to a product marketing candidate or a potential technical writer.  Make the assignment as real possible.  [I cannot stress this enough.  Candidates should have to demonstrate that they can perform the tasks that they’ll need to perform after they are hired.]

These individuals can also serve (possibly unwittingly) in the “recruiting” part of the interview process.  Ideally, they like what they do and are often passionate about the organization.  When they are, that will show through in their demeanor and enthusiasm during the interview.

• Potential subordinates

It can be tricky, when hiring a manager or leader, to include potential subordinates in the hiring process.  I always do, for several reasons.  Most importantly, those future subordinates are likely respected, talented, current employees whose judgment you trust.  [If that’s not true, then you have a much bigger management problem than the hiring process at hand!]  In addition, those people have different (but valid) expectations of what that new manager will need to do.  You need to be realistic when considering the input of these potential subordinates, but it does need to be considered.

• Experienced interviewers from other departments

This is a role that’s often overlooked (or never considered) by hiring managers.  I think that’s especially unfortunate, because it can be very valuable.  [That belief is only partially because I personally play this role very often.  At my company over the past few years, I’ve interviewed candidates for Account Executive, HR manager, IT Director, Territory Manager, Software Engineer, Data Warehouse Consultant, Test Engineer, Sales Consultant, Project Manager, and more.]

This person’s role is sort of a catch-all.  Identify imposters.  Evaluate the ability of the candidate to handle stress.  Distinguish real contributions and real leadership from mere participation.  Uncover potential personality problems or motivational challenges.  Anticipate mismatches with company culture.  [Yes, it really is possible for someone to do all of those things in an interview.  I’ll explore that in a future post.]

• The hiring manager’s boss (and higher levels of management)

This person can often play the role described above, but has a few other important potential duties.  One is to answer questions the candidate might have about the hiring manager and about the organization.  In addition, this person is often the key advocate of the organization in convincing the candidate to join the company.  After all, a higher level manager or executive can (we hope) effectively convey the company direction and strategy, offering a compelling vision of why it’s a great place to work.

Although that’s a lot of different roles, don’t shy away from being thorough.  Hiring decisions are critically important.  Hiring mistakes are extremely expensive.  If you hire an unqualified candidate, it will probably take months to recognize the problem and even longer to correct it.  During those months, you’ll spend money and time training the new employee.  Meanwhile, once you do correct the problem (and replace the failed employee), you’ll be back where you started, but you’ll have missed months of opportunity that would have resulted from a better hiring decision.

For now…I’ll leave you with this thought:

You might be wondering whether you can really include that many people in the interview process.  In my opinion, you can’t afford not to!

You’re interviewing a candidate, looking for aptitude and attitude, but you’re not sure what to ask.  Just like the candidate, you have access to hundreds of thousands of web pages listing “interview questions.”  How do you decide what to ask? 

Remind yourself of what you’re trying to accomplish: Is this candidate the best person to do the job you’re trying to fill?  The candidate’s previous experience and skills are only important in relation to that question.  They serve as the foundation for your questions but, by themselves, those skills and that job history aren’t enough.

Here are some guidelines I follow in preparing questions for an interview candidate.

• Avoid the most common cliché questions

I’m not a fan of questions like, “What is your greatest strength (or weakness)?” or “Where do you see yourself in X years?”  Most candidates have rehearsed answers for those questions and rehearsed answers rarely provide much insight into the candidate. 

• Ask for examples
  • “Tell me of a situation where you …”
  • “Describe a manager / subordinate / co-worker who…”
  • “Describe your personal contributions to <some key project>”

By probing for explicit examples, you can avoid trite, rehearsed responses.  Your goal is to see how the candidate thinks and how he has handled various challenges he is likely to face at your company.  In addition, you want to separate “specific responsibilities he had” from “projects where he tenuously contributed.”

• Probe for conceptual understanding and ability to explain

Ask the candidate to explain some core concept that he should understand well.  When listening to the answer, look for two things: does he really understand this concept and is the explanation clear?  Some examples include:

• Describe a perfect sales opportunity (and what characteristics make it perfect).
• Describe the architecture of the last application you developed.
• Tell me what a data warehouse is.

• Push the candidate to say “I don’t know”

I often do this as a follow on to the question above, especially when interviewing a technical candidate.  I probe deeper and deeper for more detail about some topic, expecting to get to a level that the candidate doesn’t know.  That’s the answer I’m looking for: “I don’t know.”  [Or even better, “I don’t know but here’s how I would find out”].  Candidates who are unwilling to ever say “I don’t know” can present risks: they may be reluctant to ask for help or advice; they may try to fake their way through things when they are uncertain; or they may have difficulty collaborating with others on your team. 

• Validate ability to retain information

Ask the candidate something that you know they’ve heard or learned during the interview process.  One of my favorites is “Tell me what our company does.”  If I’m not the first person on the interview loop, they’ve probably gotten this description from someone else.  If I’ve previously phone-screened the candidate, I also sometimes ask them to describe something that I told them on the phone.

• Be original

[For many people, this is easier to say than to do.]

Come up with a question you haven’t read from any list (or from this page).  One of my favorites (which I talked about in a blog post last year) is “In your current job, what was the biggest mistake you made?”  

That question combines several traits of a good question: it’s probably unexpected, it asks the candidate to do some introspection, and it urges the candidate to reveal some vulnerability.  If the candidate says “I can’t think of any” or “I don’t make mistakes” it makes me worry. 

For now…I’ll leave you with this thought:

Ask questions that will get past the candidate’s interview preparation skills to evaluate the skills that are more relevant to your open position.

When you interview a candidate for a job at your company, you ask questions, but do all of your questions have a purpose?  If not, you’re wasting your time (and the candidate’s time as well).

Step back and think about why you’re doing the interview at all.  Your objective is to decide whether this candidate is suitable for the open position that you’re looking to fill.   Do they have the right skills?  Will they be sufficiently motivated to do their best work in this position?

If you boil it down to its simplest form, the interview should be to assess two things about the candidate:  Aptitude and Attitude

• Aptitude 

1. capability; ability; innate or acquired capacity for something; talent
2. readiness or quickness in learning; intelligence

This is a mix of existing knowledge and the ability to learn.  In most cases, ability to learn is more important than what the candidate has already learned.  However, there’s clearly a baseline of existing skills required.  If I’m hiring a software developer, the smartest lawyer in the world (with no programming skills) would be a terrible candidate.

Can this candidate do the job?  Does she have the right skills?  If there are new skills required, do I think she can learn quickly?

• Attitude 

1. manner, disposition, feeling, position, etc., with regard to a person or thing; tendency or orientation, especially of the mind

Will this candidate fit in with our company?  What kind of work ethic does she have?  Will she get discouraged when things get tough?  Will she work independently and be a self-starter?

That’s great, but how do you assess those traits?  Ask the right questions.

In my next post, I’ll discuss some good (and some bad) questions to ask.  

For now…I’ll leave you with this thought:

Before you interview candidates, make sure you understand what you’re looking for.