Hiring the Best People

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Welcome to the HBR IdeaCast from Harvard Business Review. I'm Sarah Green Carmichael. Here's Patty McCord's hiring hell. There's a job opening at a company. The hiring manager, not thinking very hard about what problem they need this person to solve, comes up with a job description. McCord was chief talent officer at Netflix for 14 years, and she says this situation typically goes a few different ways.

You describe somebody who left the company that you didn't want to leave and you wish had stayed, or you describe a fantasy person that literally doesn't exist, or you do whatever it takes to get it approved.

This is just one of several things McCord says companies eternally get wrong about recruiting. So today she's going to explain how they can get it right. Interviewing, compensation, even firing when new hires don't work out. McCord is the author of how to Hire in the January February 2018 issue of Harvard Business Review. Patti, thank you so much for talking with us.

Sure.

So what is the right way for managers in HR to partner together?

Well, they should be in touch with each other all the time, whether they have an open position or not. And HR's job is to really understand the teams of people that they're supporting. What do they do? What do they look like? Who do they talk to? What do they think about? What are they trying to accomplish? Where do they hang out? The HR people should be able to speak the language of the teams that they're supporting. And so when they feel like they're part of the team, then they know what's coming up in front of them and they start thinking about, wow, where are those great people going to be? How am I going to find them? How are we going to together create a network so that when we really need somebody, we already have a pool to pull from. We're not just starting cold every single hire.

You've said before that it's nonsense to focus so much on cultural fit, which I know a lot of managers do. What's wrong with focusing too much on cultural fit?

Well, it depends on what you mean by it. Right. And so oftentimes cultural fit means I want to have a craft beer with this person at our company bar. And that's a nice thing to aspire to. But remember what I said earlier, it's about hiring a team member that's gonna help you get Great stuff done on time with quality and figuring out what the problem is. And so what happens with the quote, cultural fit thing is that most people go through this dialogue in their head. I wanna hire somebody who's really smart and I want them to be really excited about the work that we're doing. I want them to be really good at what they do. I want them just like me or just like me when I was younger, right? And so like hires like hires like hires like. And then pretty soon you not only have everybody who is the same, looks the same, acts the same, thinks the same, but you don't have controversy, you don't have diversity of opinion on the team and then you don't get as interesting stuff done and you don't look for people who might solve the problem differently than you. So you know when you start with the problem rather than with the fit, then sometimes you find that people who aren't like you fit just fine because they're really good at stuff that you're not really good at doing. It's a classic early management problem. I'm going to hire somebody who's just like me and then pretty soon I'm going to have 40 of people who are just like me. And then to get twice as much work done, I'm going to need 40 more people just like me. And then all of a sudden you have this out of control, chaotic 80 person organization. Instead of having maybe another 20 people who aren't like you at all and have a lot more experience.

Can you give us an example of someone who didn't seem like they would fit in at Netflix, but then on the job they really just blew you away.

When we started opening up the service to people to build applications, to build their own apps, to use Netflix, there was a guy in Arizona who wrote this really cool app that we all really loved. I think it was a personalization kind of thing. And we were talking about new features that we wanted in the product at the time. And somebody's like, yeah, we should do something like that guy, that programmer in Arizona. So I'm like, well, let's go find him. So my recruiting team reaches out. He's very conservative, very quiet, woodworking guy who works at a bank, right? So he comes out and he interviews and so this is his hobby, right? Writing these apps. He loves Netflix, he loves the products and he does all this stuff, but he does it when he's not doing his woodworking and he's just perfect. He's so clever about it and he represents a Portion of our customer base that we don't see very often in Silicon Valley. A guy that works at a bank in Arizona. So he has a really fresh perspective on what to do that's not just technical. He very much is customer centric. So we interview him all day long and at the end of the day, he says to me, are you going to hire me to do what I love to do? I said, yes, we are. He said, are you going to pay me a lot of money to do it? And I said, well, we're going to make it so that you're going to be okay living here in the Bay Area. He literally blushed and just looked at his hands in his lap and said, oh, goodness, he's a vice president now.

Wow.

And he was not a go getter, hard charger, bleeding edge Silicon Valley technologist. I mean, he is now, but he was a guy who started out with a very customer centric perspective on building product. And that fit very well culturally for us without his personality fitting. So that's where I get hung up on it. You know, it's like, do you mean cultural fit in that you like to get a lot of really hard stuff done, or do you mean cultural fit in you really like to party?

Is there an example of a way that you and your recruiting team have figured out a quality to look for in candidates or some kind of tell that you think, oh, this person will be just right for this job because they're really good at some other random thing?

Yeah, occasionally. It's funny, one of my recruiters for a particular job had decided that people who were really interested in music were really good at doing this particular kind of thing because she sort of found that thread. You know, the thing is that every single job is unique. Every person, every candidate is unique. It's about making those matches. People always ask me, what's my favorite interview question? And it doesn't really matter. It doesn't really matter what question you start with. It's all the questions where you follow up. Oh, I see here on your resume, Sarah, you were in charge of delivering this incredible, groundbreaking product at Facebook. So were you the manager of that team? Oh, you were part of the team. And how big was the team? 700 people. I see. So you weren't personally responsible for delivering that. And gosh, you know, how did it go? What did you do? If you had it to do over again, what would you do differently? What have you learned? The really important tells for me are that I want to hire people who have made mistakes, who've been brave enough to try something where they might fail, and more importantly, once they've failed, have learned something from it. So I want to look for a track record of people who have boldly gone where no one's gone before once or twice in their life. And when they have and they've stumbled, that they picked themselves up and they kept going, and they said, ooh, learned a lot from that. Don't make that mistake again.

How do you have a real conversation about failure in a job interview situation? Because usually what happens is you ask someone about their biggest weakness or something, and they're like, well, I'm just a perfectionist. And then you're like, that's not a real answer.

Oh, you just pick something on the resume and you have that conversation about. So tell me about when you did this. What was that? Like, how did that go? Right? And when you ask those stock questions, you get those stock answers, right? Wow, that sounds really great. You must be really proud of that. Tell me about something that kind of went wrong, that if you had to do it over again, you'd do it differently. So it's about asking those questions in a really probing but respectful way. The interview questions I hate are the ones where you're trying to trip somebody up or you ask the question that no one can answer. I mean, engineers do this all the time. Well, you know, Stan asks a question that nobody on the earth can answer because, you know, he's Stan and he's so brilliant. Every time I'd interview somebody after Stan, they'd go, I don't know, man. He asked me this really hard question, and I didn't know the answer to it, and I felt really bad. And then I said, why are we asking a question that no one can answer? And besides that, Stan already knows and he's on the team, so stop asking that again. What are we trying to figure out here? What is it that we don't know? What skills and experience don't we have? What problem are we trying to solve? Then we can talk about that. Then I can say, hey, here's the problem as we've outlined it to you. Have you ever worked on a problem like that before? Have you ever stumbled on a problem like that before? If it was your dream problem, how would you approach it?

So how do you recruit the recruiters? Like, what are you looking for in a great talent scout?

Somebody who really is interested in what other people do for a living. It's not just that people will tell me I'm a people person. It's like, oh, gag me, right? You want somebody who's really interested in the work that people do and are willing to get underneath it. So I'll give you an example of when it doesn't work out so much. I'm overhearing my recruiters and this is when we were starting to recruit data scientists and one of my young recruiters was saying, I can't stand these guys. I mean, they're so weird and they're so introverted and I just don't know if I can keep talking to them anymore because they make me crazy. And I butted in and I said, hey, these guys are not at the club, they're data scientists. Just say that out loud, right? And if you can't love them, then you can't recruit them.

You have said at different points, it's so important for HR to really understand the business that actually people might want to consider hiring someone from the business to run HR as opposed to hiring an HR specialist. Why?

What I mean by knowing the business is two things. One of them is to know what the end user of your business, what their needs and desires and wants are. The customer, right? And so that customer might be somebody on the other end of healthcare, it might be somebody on the other end of a classroom, and it might be somebody on the other end, other end of a product. But when you start with that product, customer centric perspective, then you back up into, well, if we're a for profit company, do I know how to read a profit and loss statement? Right? So do I understand the workings of the business? Because once you understand the workings of the business, then you understand what each team contributes to do effectively. That holistic understanding what everybody's trying to do allows you to help guide and direct better teamwork, not just happier people.

One of the challenges I think with recruiting is that so in a big Silicon Valley, fast growing type company, you're hiring a lot of people all the time. But in a company that is say like a publishing company, you don't hire someone until you have an opening, which means that you probably aren't hiring someone until someone else has left. So how can you kind of develop a flexible, always recruiting, always kind of have an eye out for good people mindset. If you're not actually sure if you'll be able to afford to hire them or on what timeline, you just think.

About it all the time. Our worlds are so networked now, right? We don't even talk about it as a skill anymore because we all live on social media. We're all around other people all the time. And I think how you do it is you just sort of keep a mental list or a physical list all the time of great people that you know. Right. And you're always talking to them, and you're always staying in touch with them, so that when you have that opening, you have in your pocket five people to call. When I'm coaching candidates and employees about their own careers, if I was coaching you, I would say, you know, to get your perfect job, it's not what you know or who you know, but it's who knows what you know. Right. So if I think, yeah. Remember I met Sarah at that soccer game the other day for our kids, and she was talking about what she loves to do and what she really thinks is great about her. She would be great for this. And if she wouldn't do, I bet she knows somebody, right? So I bet you know somebody who'd be really interested in doing this. So that's what. It's just sort of this way of living that you're always looking for great people and great talent because you want them in your world. It's great for you, too, Right. They know you now, too. And so it's silly that we focus so much on keeping people instead of recognizing the real truth is that people's careers are journeys through their whole lives. And so you always want to be looking for where's that great opportunity? And as an employer, you're always looking for, where's that great person?

Well, but that does raise, I think, an interesting question, which is there are probably some people that companies wouldn't want to lose. How should companies deal with sort of attempts to poach those people? How do you deal with poaching?

Yeah, poaching, not my favorite word in the world. Right. I'm not particularly fan of military metaphors. And poaching's like one of those. Are you gonna go shoot them, tie them to the front of your truck and take them to your company? I mean, it's not how it works. So I think poaching is a healthy part of business, and I think it's perfectly okay. And everybody's always poaching. You know, when somebody else, another company comes after one of your employees, they're poaching. But when you're looking for a great candidate to fill out your team, then you're recruiting. Isn't it two sides of the same coin? I mean, they're the same thing. So I think the skill that's missing is I think people should Be interviewing all the time, particularly women, right? You want to know what you're worth, that's what somebody else will pay you. I tell people, employee engagement doesn't mean they put a ring on it. If you want to go interview with somebody else, you're not cheating on your husband. You're just going to find out what else is out there. So I think the whole thing should be a lot more fluid and open and honest than it is. Because, you know, you said something earlier, you said some companies don't really recruit until somebody leaves. And in my mind, that's a really short sighted way to run a business. Right? So if you go back to my basic premise, which is I want to build a team of people that gets amazing work done and I figure out by when that is, I wrap a timeframe on it and I say, okay, if I had the team that could kill that just do incredible stuff in six months. And I knew what that was and then I dropped down and said, okay, I know what they need to do in six months time and I know what goodness looks like. And so what would people need to know how to do? And then I would think, wow, you know, it'd be great if we had a couple more people that would, instead of whining about what's happening in marketing, would just get up and go ask them. That would be a lot more efficient. Or all these people, they're always running around. I need some people to just buckle down and work right? Heads down, what does it look like right now I know what I need to do now. I know what kinds of people I need to do it and what they need to know how to do. And then I drop down and say, okay, well what kind of skills and experience would it take to be able to know how to do that in order to accomplish that? And then I see who I've got. And sometimes when I walk through that thinking, I realize, oh no, I got Sarah on my team and she's not gonna wanna do this stuff and she's terrible at it and she's gonna hate it. Like, oh no, am I gonna have to put her on a fake performance improvement plan?

Yeah.

Right. To prove that she's incompetent at something we both know that you're not competent at and that you don't like and you won't want to do. Right. And so, but I'm gonna do that because I gotta wait for you to leave before I start recruiting. When we know that. Right. Why can't I have a conversation with you? And say, wow, I just realized we're going in a direction that's really different than what matters to you and that you're good at. And so let's not make each other miserable in the next six months. Let's figure out how you make an exit that you can walk away from here with some incredible experience and we can find somebody who's going to be really perfect at doing what we need to do.

What is the right way to fire someone if you have to?

Well, first of all, we stop using words like fire back to poaching and firing, right? Nobody whoops out a gun. There's no blood. And the thing I hate about using the word firing is that when someone says, I was fired, they feel ashamed. I mean, why would we ever want to make someone feel ashamed? You know, sometimes you hire somebody to do a job and then they do it. It's done. You don't need them to keep doing it over and over again. They did it, right? Sometimes it takes years, sometimes it takes months, you know, and so you can acknowledge that that happens. I see it a lot in early startups or tech companies or companies where you're building something new. So when you're building something new, the people who are builders and get excited about doing that and running into walls and starting over again, they're really, really good at doing that. And they tend to be not the best people to maintain it because they want to do big stuff. And now all of a sudden, it's incremental, it's detail oriented. It's a different job. And so those are two different employees. I think we'd be a lot better off saying, you know what, let's go find something great for you to build again. And maybe there's something like that in the company. And maybe we're kind of done, right? Maybe we're on, you know, what we want to do is scale this thing we've built now. And that's not you. So what you do is have these conversations when you can start to see the future more clearly, and then you just have a conversation about what's your part in the future, right? And you can honestly say, I don't think we're going to need you anymore. Right? And that is a really different conversation than, I'm gonna have to fire you, Sarah.

Right?

And then you are a victim. You're about to be shot. Right? I mean, that's not a good place to be. Instead of a team member who's contributed a ton and it's time to go somewhere Else.

And yet it is hard, people. It's hard to have these conversations.

Yes, it is. It's cotton cold management. But, you know, here's how it becomes easier practice, right? I mean, this is, you know, we're looping into a bunch of other stuff too. But it makes me crazy. It's like, why don't annual performance reviews work? Right? Because you don't get any better at giving somebody feedback if you only do it once a year. But if we have a conversation every month about how things are going and we talk about how things are going in relationship to you and what you want to do and what your career is in relationship to the. The team, what the team needs to accomplish and what the timeframe is in relationship to the company and what the company went, right? And we can draw those lines back and forth, then we can see the future pretty clearly. And if you come back to me and say, I have a confession to make. I went on an interview to another company and they offered me something that I can't have here, and I am so excited and I really want to do it, then I need to have to not punish you for being poached or for cheating, but say, wow, that's amazing. Good luck. So let's figure out how to transition.

I do want to ask you more about the compensation part of this, because I know that is also an area where, especially in tech, the very top people will get paid just oodles of money because what they can do is so rare. How do you justify paying top dollar for top talent and yet also explaining it in a way so that the rest of the organization doesn't feel like it's unfair.

It's usually a supply and demand issue in tech. So again, it's back to the uniqueness of the position and the uniqueness of the person, right? If you need a very rare skill and it's really, really important to the business and nobody on your team can do it, and by hiring that particular person and paying them a bunch of money, you get a year's worth of progress in six months. It's absolutely worth the return on the investment. You have to do that. It's business imperative, right? If you had to have that corner location for your retail business, then you would do it. You would pay for it if you thought it would increase business. So you have to have a business motive for doing it, and you should be able to explain to your team. So we know how to do this, we figured it out, but now we have to do it. A third thousand Times bigger than what we're doing now. And none of us have ever seen anything bigger than 20 times. So we need to pay for somebody who's going to be able to come in and give us this expertise to know how to do that. And the rest of the team can figure that out. We should be able to rationalize our compensation. Right. The other thing about supply, demand, particularly in technology, is, you know, that skill that only one person has? Well, they teach a bunch of other people, and then pretty soon that skill isn't so rare anymore.

Right, but was there ever a time you were initially hesitant to match or exceed the offer that someone got from another company and then ultimately thought to yourself, yeah, I guess we have to pay this person that much? Because, you know, to your point earlier, the way to figure out what someone's worth is to have them interview with a bunch of companies.

I'll give you a specific example. We had an engineer on the team that was with the company from the very beginning, and he worked on personalization algorithms, which means the ability to help you find a movie or TV show that you want to watch that's unique to you. Right. I got a call from his manager who said, Google's recruiting him and they're offering him twice what we're paying him and I want to match it. And I went on my HR tirade. That's ridiculous. He doesn't have that kind of experience. Barely out of college when we hired him. He's not worth it. Tell him to go to Google. Don't let the door slam hit you on the way out. Right? So then his manager gets involved, and then his VP gets involved, and then the CEO gets involved. And this is like Friday, Saturday, we're emailing like three times a day. And I am putting my foot down. No, we're going to mess with our internal equity. This isn't fair. Google shouldn't set salaries for everybody in the universe just because they have more money than God. I mean, I go on a tirade and Sunday morning I wake up and I'm laying in bed and I think, of course they want him. Nobody else knows what he knows. Nobody else has been working on this particular problem as long as this particular individual. In fact, he's worth it to them, and he's also worth it to us. So I send out an email to everybody involved, and I say, I was wrong. And I said, look, I just ran through the P and L, and we could actually double the salaries of everybody on the team. And it's not really going to affect us that much. And if that's the right thing to do, that's what we should do. We should not make money. The reason someone leaves, right? And that's, you know, back to your retention thing. If you have valuable people, there's two things you want to do to keep them if you need to keep them. One, you need to have the work that they're doing really be the work that they love to do that they're extraordinarily good at doing. Right? You don't keep them just to keep them. You keep them by giving them great colleagues and great work. And the second thing is you take away money as a problem.

Right.

If they're worth it to you, then pay it. I consulted to a little startup where they sent me their compensation proposal. And the woman who was doing it said, she's like, let's go through the slides together. And I said, oh, I see you got a survey, your survey data, to determine what salary ranges to put your people in. She said, yes. And I said, does the survey include people who do what you do? Well, no, actually, they are a company that sold razor blades online. You didn't really match apples to apples. Okay, so let's take that. And you've decided to pay in the 65th percentile? Yes, I have. And I said, okay, can I be one of your employees? Okay, who gets the other 35%? She goes, well, that's not what percentile means. I said, I know that and you know that, and that would make two of us. And nobody else in the whole world knows what 65th percentile means except other HR people. And you're not telling them. Second of all, you cannot say A players and 65th percentile in the same sentence and have it be true because a players get a salaries. And third, are you going to show the employees the salary survey? Oh, no, that's HR confidential. So you're just going to say trust me and you can do that. But I would be advising your employees to go interview and come back and say, uh, this compensation discussion is a great example of what I'm talking about, about great recruiting and great hiring, which is stay ahead of this. Know your trends, know what's valuable, know what's a scarce skill set. Most importantly, know what it is you need. Because just because a job is scarce and somebody makes a bunch of money, if you don't need anybody to do it, then that's somebody else's issue.

Yeah, well, you've talked about this also as a sort of constant matchmaking. It's really about those two things coming together, person and role.

That's right. And then it's about you as an internal analyst. You know, in hr, we talk a lot about data. Now. It's the new thing that we're going to have, data. And data is only interesting if you analyze it. Right. So compensation data is really important. And that's something that also needs to happen over and over and over again on lather, rinse, repeat basis. Right. Every time we hire a bunch of people in an organization, what did we find out? Are they making more than everybody who's currently here? Does that mean we're underpaying our people? Or is it like, oh, wow, we thought we were paying through the nose and now everybody's making that kind of money or have things flattened out or if maybe this is really important to us but not so important to somebody else. And so we could use pay to differentiate and get a really extraordinary person in that role. So it's about looking at the trends over time, talking to other people, you know, knowing what's going on in your world so that you can best advise the company.

Patti, thank you again. This was really fun.

Yeah. All right, take care.

That's Patti McCord. She was Netflix's chief talent officer from 1998 to 2012. Now she advises startups and entrepreneurs. She's also the author of how to Hire. Read it in the January February 2018 issue of Harvard Business Review or on hbr.org. Thanks for listening to the hbr ideacast. I'm sarah greene carmichael.