10 Recruiting and New Hire Interviewing Best Practices

The other day a founder asked me about interviewing because a candidate had described me as “a great interviewer,” and she wanted to know why. (And for that matter, so did I.)

Emboldened by this seeming endorsement, I dashed off what turned into a lengthy email on interviewing and recruiting, a topic about which I am passionate not because I think I am good at it but because I think I am not.I find interviewing and recruiting difficult, have made plenty of mistakes over the years, and the consequences of those mistakes are invariably painful.  The wise manager approaches recruiting as a great opportunity to strengthen the organization but does so with some degree of humility, if not trepidation.

Thoughts on The Recruiting Process

Let’s start by sharing some things I’ve learned over the years on the recruiting process before we dive specifically into interviewing.

• Know what you’re looking for.  Most troubles begin here because people fail to ponder and debate what they are actually looking for, so you do the equivalent of walking into Costco without a shopping list.  For example, for a seller, do you require software applications, platforms, or data & analytics experience?  What size deals?  To line of business, IT, or both?  For a CFO, do you require an accounting or finance background?  A veteran or an up-and-comer?  A CF-No or a CF-Go style?  You should know the answers to these questions; keep yourself honest by documenting them in a must-have / nice-to-have document.

• Remember it’s a mutual sales process.  Unless you’re blessed to be at the hottest company in town, always remember that recruiting is a mutual sales process.  That means you need to be selling and filtering at the same time.  Particularly at the end of the process, interviewers should be told whether they should be primarily in “sell mode” or “filter mode.”  As it turns out, the person who said I was a “great interviewer” was a late-stage candidate who saw me in sell mode.  (And, yes, we succeeded with the hire!)  But who knows what they’d have thought of me in filter mode?

• Follow some methodology or book.  I’m not particularly religious about which one, but I think a common framework helps to ensure completeness and improve communication during the recruiting process.   My private equity friends at ParkerGale, who do a great job of methodology selection, swear by Lou Alder so I’ll plug Hire With Your Head here.  ParkerGale has its own hiring playbook available as well.

• Use work test samples.  While I’m not big into puzzles with prisoners and lightbulbs, I am a huge believer in having candidates do anything that approximates the work they’ll be doing if they take the job.  Have a product marketing manager give a presentation.  Ask a seller to role-play a sales call.  Have an engineer write a pseudo-code to generate the Fibonacci sequence (to see if they understand recursion).  My all-time favorite was giving two FP&A directors the same three-tab spreadsheet with instructions “fix it,” “answer it,” and “model it” to test their attention to detail, problem-solving, and modeling abilities.  The two were neck-and-neck on paper and in the interviews, but the exercise revealed a massive difference between them.  (We hired the one whose work stood out and were happy we did.)

• Check references.  While I suppose the standard process of checking candidate-supplied references is still de rigeur, my favorite reference checks are backchannel and framed not in a binary hire-or-not light, but instead in the light of:  if I were to hire them, what strengths and weaknesses should I expect to see and how should I work with them to get the best results?  This framing tends to produce a better conversation.

• Consider a try-and-buy.  One way to remove enormous risk from the recruiting process is a try-and-buy:  hire the person as a contractor or consultant, try working together for 3 to 6 months, and if both sides are happy at the end of that period, then convert the candidate to regular employment.  This works for some positions better than others — e.g., fractional CFOs and rent-a-CMOs already exist, whereas fractional CROs and CPOs (product) generally do not.  This works for some situations better than others:  it won’t work when recruiting a veteran CMO out of an existing job, but it can work nicely when considering a between-jobs, up-and-coming VP of Finance for their first CFO role.  Be open, be creative.  I’ve made some great hires this way — and avoided some train wrecks.

Thoughts on the Interview

When it comes specifically to interviewing, here’s what I’ve learned.

• After chit-chat, ask for a N-minute life story with an emphasis on the why, not the what (i.e., why did you major in X, take first job Y, or move to job Z, as opposed to what you did in each).  For math types, I call this the first derivative of your resume.  I like to time-bound it, typically to 5 or 10 minutes, to see if the candidate has the ability to manage time and summarize accordingly.  I like the first derivative because it provides more information:  I already (largely) know what a PMM or VP of Finance does at a software company.  I’d much prefer to hear why someone chose to work (or stop work) at company X.  Moreover, if I want to understand accomplishments or duties, I can ask that separately, not as part of the life story.

• After hearing “tough, but fair” for the 100th time, I decided to never ask for philosophies of any type, ever again.  Instead, think about situations that are encountered on the job and ask for relevant stories:  tell me about a time you fired someone, tell me about a time you launched a product, tell me about a time you ran the planning and budgeting process.  The experts call this behavioral interviewing, and it works.

• Drill, baby, drill.   While I first learned this technique as a way to catch liars and exaggerators (who are frequently ensnared by the details), drill-down questions make fantastic follow-ups to behavioral “tell me about a time” questions.  Example:  tell me about a time you ran a budgeting process?  Drill-downs:  what year was it, in what month did you start, what was the rough total expense budget, how did you define the process, how many budget owners were there, how many iterations did you go through, how did you agree on the sales plan, did SalesOps have their own model, who made the churn plan, did they properly handle multi-year deals, who was the hardest exec to get on target, what were their objections, how did you handle them, when did the board finally approve it, how many iterations did that take, what were the initial objections, what would you do differently?  I’ve literally started down this path and had people say, “uh, I didn’t actually run the process in that job, but I was part of it” — an important distinction.  Whether to catch embellishment or to better understand candidates, drill-down questions work.  It’s more effective to go ten feet deep in one situation than one foot deep across ten.

• Consider a panel interview.  I’ve become a huge fan of properly conducted panel interviews.  But first, what a panel interview is not:  it’s not randomly throwing 2-3 interviewers into a room with a candidate with no structure or preparation.  That’s called a romp, and it’s usually a negative experience for everyone.  What I’ve seen work is the following:  after a screening process that results in three candidates who meet all must-have criteria, you appoint a lead interviewer to create 5 behavioral questions (based on expected job duties in the first 12 to 18 months), share those questions with the candidate in advance, and then run a 90-minute live interview with a panel of 3-5 members who largely listen and ask follow-up questions only.  You create a scoring rubric, have all interviewers complete it, and then conduct a live discussion to compare the candidates.  This is FIRE.  In theory, any of three candidates can do the job, so you’re focused on picking the best one for the company and situation.  The panelists listen intently because they’re not worried about running the interview, the remaining time, or their next question.  All candidates are asked the same questions.  And then you debrief via a live discussion which, as much as I love technology, is far higher bandwidth than any collaboration mechanism.  And you avoid groupthink because the rubric has been completed in advance.  Fire.  I thank ParkerGale for teaching this technique to me; they have a Private Equity Funcast episode on how they approach hiring here.

This article was published by Dave Kellogg and republished with permission.