How to Hire Well

Alex: What's up, everyone? Welcome back to another episode of Founder’s Journal. I'm Alex Lieberman, co-founder and executive chairman of Morning Brew. On Founder’s Journal, I act as your startup sherpa, curating the best content for entrepreneurs, summarizing it so you don't have to read it yourself, and analyzing it so you have actionable takeaways to apply to your business. Before we hop into it, I have one ask of you: Please share Founder’s Journal on social media. Podcasting is a super competitive game these days and the only way to grow is through word of mouth and promotion on social. A minute of posting on your end will make the dozens of hours that my team and I spend each week creating the show completely worth it. You can either give the show a shout-out or share the single most interesting thing that you learned from today's episode, and make sure to tag me so that I can give you the proper props once you post. 

Now, let's talk about today's episode. Hundreds of you have written to me over the last week or so, as I have pestered you to shoot me an email and say hi, which you should do, if you haven't. My email is alex@morningbrew.com, and as I promised, I wrote back to each and every one of you, and when I wrote back to you, I asked you a very simple question: What ideas or feedback do you have for the show? I got my fair share of high fives and pats on the back, which is to be expected, but I did get some great episode ideas, and one topic that I heard over and over and over was about hiring. How do you hire well? How do you set up the right interview process? How do you write a good job description? How do you evaluate your top applicants, et cetera, et cetera. And so I went out and found one of the best resources on hiring by one of the most well-respected founders and early stage investors, Elad Gil. What I'm about to read to you are highlights from the hiring chapter of Elad's amazing startup book, High Growth Handbook. So let's hop into it. 

The first thing that Elad talks about that so many companies just gloss over because it feels like busy work is the JD, or the job description. He says, “write a job description for every role. Many companies start off recruiting via personal networks for a small number of roles. Example, engineers and designers. As a company scales beyond individual contributors in a handful of functions, it is important for people hiring for a role to understand what is important in the person that they hire. For example, if you're hiring a business development person for the first time, what should people look for in that person and role? An engineer on the interview panel might not know the difference between a business development and a sales person. Clarifying skill set and role is important, so everyone is looking for the same type of candidate for each role.

“You should write a job description that explains what the role will do and what experience and background you're looking for. You can also list the things that you are not looking for or consider less important. This description should be circulated to people interviewing for the role with a short note explaining what the hiring manager is looking for and prioritizing. If your team subsequently raises questions about who to hire for the role, you can refer back to the original job description to correct any bad assumptions.”
Now, I'll add to Elad's point on JDs by saying that I think that job descriptions are as much for your internal team as they are for the candidate externally. They hold you accountable for actually understanding what you're hiring for, and they basically act as the backbone for an interview guide, because your JD should tell you exactly what you want to be looking for in a candidate during the interview process. 

Next up, Elon talks about conducting interviews in an intentional way. The first tip he shares is so obvious when you hear it, yet I bet you don't actually do it. He says, “ask every candidate the same questions. For each candidate for a given role, ask the same or similar interview questions. This will allow you to calibrate candidates across identical questions. Assign focus areas to the interviewers prior to the interview. Often you want to interview candidates for specific aspects of their role. For example, you might interview a product manager on their product insights, past accomplishments, culture fit, et cetera. Rather than have every person the candidate interviews with ask the same set of questions for every area, you could have three or four interviewers each focus on a different area that you assign to them before the interview. This will allow for an in-depth view of each area versus a shallow view of all areas. Additionally, if you bring the person back for a second round of interviews, you can double down on areas of concern with more focused interviews. Work product interviews; for some roles, the best way to assess a candidate outside of direct prior knowledge working with them is to have them develop a work product as part of the interview. This could happen either onsite or as a take-home. For example, an engineer could do a coding exercise or a designer could be asked to do a quick set of wireframes or workflow. For a hypothetical product, a marketing person could be asked to generate a hypothetical product marketing plan. In general, it is good to avoid asking for work or output on an existing company product to avoid the perception of getting free labor out of a candidate.”

So before we go into the post interview stuff, I just wanna add a few quick thoughts on Elad's approach to interviews that I just shared. First of all, I think it makes complete sense to have certain interviewers focus on certain questions and categories, but I've rarely seen things go down this way, because no one takes ownership of creating coordination across interviewers. This should either be the job of your HR person or the hiring manager, depending on the size of the business. Second, I think work product interviews are a way better predictor of if someone will be good for the job versus just a normal interview, and even better if possible, the ideal situation would be to have someone start as a paid freelancer that can then turn into a full-time opportunity. Whenever possible, I try to hire people in this way, where we go from freelance to full-time. 

Next up is candidate scoring, which I have literally never done in my life, but it makes so much sense if you want to try and make a hiring process objective. Elad says, “candidate scoring. As each person finishes their interview, it is good for them to enter feedback about the candidate before talking to other interviewers. This avoids people biasing each other and forces each interviewer to take a written stance on a candidate. You can also adopt a numeric ranking system; for example, one to five points or a simple hire/no hire scale. The key is consistency as well as providing interviewers with a clear definition of what these outputs should mean. Consistent scoring can allow you to quickly reject or pursue candidates. In general, your scoring system prevents interviewers from having the easy out of a quote unquote “neutral option.” Hence, the hire/no hire framework would lack a “no opinion” option.” 

Now, here are my thoughts. It just makes so much sense, right? Again, I think normally things like candidate scoring aren't done because either someone isn't fully accountable to the hiring process or because hiring is never someone's full-time job. So they don't treat the process as comprehensively as someone who only thought about hiring all of the time. By the way, the other reason I think candidate scoring is so powerful is that it memorializes your evaluation of candidates at the time that you're considering hiring them. What that allows you to do is in the future, if an employee does not work out or even if they do work out, you have a quasi decision journal that you can evaluate to understand if you were clear in your thinking at the time of hiring. 

The rest of this chapter in Elad's book talks about increasing the odds of closing a hire, running reference checks, and ensuring diversity in your employee base. So let's dive in. 

“Move fast. Every company I have ever worked for or with has realized that one of the biggest determinants of candidate conversion is how quickly you interview them and how quickly you can make an offer beyond conversion. A key metric to track is how long candidates spend in each step of the interview process. You should optimize for shorter times between each step and for rapidly getting offers out.” 

So I'll just add here that Elad is hitting on a universal truth around building businesses: Momentum is powerful, whether you're talking to a potential investor, customer, or employee. The faster you can be in pushing the process forward, keeping the person engaged and keeping momentum going, the greater the chance that you will close the deal. Part of the reason is that most employees or entrepreneurs don't act with this level of urgency, which means that high quality leads will take notice of your abnormal speed. 

Next is candidate references. Elad says, “Check candidates’ references. Reference checks are often the clearest signal on a candidate. You should reference check everyone. Be careful with businesspeople. They tend to provide friends in their organization as references, and in general will get glowing recommendations from their friends. I have found engineering and other functions to be more direct or honest when providing references for their friends. To compensate for this, try to broaden the scope of references you check for businesspeople to other functions to ensure clarity of their skills and areas for improvement.” 

So I just wanna provide a few other thoughts on reference checks here. First, I think back-channel references, meaning references that a candidate has not given you, are completely fair game and usually more valuable than normal references, because you'll end up talking to someone that hasn't been enlisted as a spokesperson for the candidate. Second, there are two questions that maybe are semi-controversial that I do think can be very valuable in a normal reference check. The first question is asking a reference, if you put everyone you've ever worked with into a lineup from best to worst, what number would this person be in the lineup? And if the reference does not say that the employee that you're discussing would be number one, you can ask them, why wouldn't they be higher up? Why wouldn't they be number one or number two or number three, depending on the number that they give you. The second question, and this is the more controversial one, but I think it really is so good at getting objectivity, is asking a reference, are you willing to bet your own professional reputation that this person will crush it in the position? Why or why not? At the end of the day, when someone's reputation is on the line, they will go from subjective to objective very quickly.

The final part of this chapter is on building a diverse workforce, and let's see what Elad says. “Diverse candidates, ensuring diversity of gender, race, or ethnic background, sexual orientation, social class and background, and more in your employee base and interview process is the subject of numerous books and blogs. There's a lot of detail and nuance in getting to a diverse workforce. A few key items: One, ensure that you have diverse candidates for each role. You will never have a diverse employee base if you do not ensure diverse candidates in your funnel. Building a diverse funnel means not only sourcing a broader spectrum of candidates, but also thinking through the language and your job descriptions, how employees are represented on your website, and other factors that will impact who applies.

“Two, focus on eliminating biases from your interview approach. A number of biases exist in standard interviewing approaches. A simple example would be whether the names and genders of candidates are blinded at the resume review stage. Three, provide benefits that support the needs of underrepresented employees. Paid parental leave is one simple example. Think through your broader potential employee pool and what benefits would support their ability to focus on their work at your company.” 

And so to that last item that Elad brought up, I remember how naive my co-founder and I were to things like parental leave in the early days of Morning Brew. I vividly remember us having an employee join the business in 2018, and during their first week, they asked us where there was a room for them to pump. Austin and I had literally no idea what that meant. And of course, our ignorance wasn't malicious. It was simply just a function of being two 25-year-old single men who hadn't given an ounce of thought to parenthood. But that is such a good illustration of why having diverse representation is so important. If we had someone in HR or on the team that had a family and kids, it's very possible we would've thought more proactively about supporting parents who joined the company. 

So that is Elad Gil’s chapter on hiring and interviewing in the High Growth Handbook. I highly recommend you check out his book if you wanna go deeper into other topics around hiring, like onboarding and managing, but also in general,if you want one of the best reads and reference books for early and growth stage entrepreneurs.

Before we go, just a quick reminder to give Founder’s Journal a shout-out on social and tag me so that I can thank you personally. As always, thank you so much for listening and I'll catch you next episode.