Startup general interestVenture Capital

Some thoughts on recruitment – instinct over CV

By December 7, 2009 5 Comments

image Having the right team is crucial for a startup and keeping the team right as a company develops is a critical discipline. I think this is one of the areas where a good investor director can add the most value:

  • by leveraging experience across many startups to advise entrepreneurs on the likely impact on team requirements of growth and the other twists and turns of startup life
  • by leveraging their network to find good candidates and recommend good headhunters (and leverage their reputation to make sure the headhunters deliver to the best of their ability)
  • by leveraging their experience of working with many different types of manager and entrepreneur in many different situations to advise on the strength of individual candidates

In other words helping our portfolio with recruitment is an important part of the VC job description. Speaking personally, across the four companies I look after in the last twelve months I have been involved with hiring three executive board directors and two executive team members.

So recruitment, and how to do it well, is something I think about quite a lot, and so I was interested when I saw a blog post by Gail McManus (one of the leading UK recruiters into the PE/VC funds) entitled Test your Instincts and Test your Assumptions.

I am a big believer in the power of instinct in recruitment, and I have made many more mistakes ignoring gut feel than I have going with it.  Malcolm Gladwell’s Blink has some interesting data on this subject which seems to show that decision quality can actually deteriorate when people try and replace instincts with rational frameworks.

But, and this is a big but, taking important decisions based on feelings that are difficult to properly explain is a dangerous business, and if different people in a recruitment process have different instincts you need a way to bridge the gap.

My approach has been to try and get the best of both worlds – i.e. to keep hold of my instincts whilst linking them to a rational framework.  The trick to doing this well and avoiding Gladwell’s dichotomy between instinct and explanation is choosing a framework that incorporates feelings.

Up until now that has meant two things for me:

  • Looking beyond what a candidate has achieved and where they have worked to hear why they think they were successful and what they actually did.  The purpose here is to try and figure out whether success came due to a right-time, right-place piece of luck or whether it was the result of the way the candidate works and is therefore more likely to be repeated.  This is a very subjective judgement as most successful people have benefited from good luck at some point.  Note also that this approach can lead to hiring someone who has previously been unsuccessful because they were unlucky.  Assessing candidates like this is the logical extension of paying existing employees on results, but judging them on process.
  • Assessing the extent to which candidates make fact based decisions.  More fact based decisions indicates a better understanding of why individual courses of action are chosen and therefore a higher probability that the good choices will be repeated and the bad ones chalked up to experience.

Gail’s post adds another useful trick, which she has gleaned from the work of Michael A Roberto, and that is to break down what you know into three areas:

  • the facts
  • the things you are unclear about
  • your assumptions

Simply going through this process will add a lot of clarity plus it is then possible to easily think about testing the assumptions and asking questions that might clear up the areas that are unclear.

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