The Right Way To Shock New Hires
The shock I’m talking about isn’t the trauma-inducing kind. Although it might be to some.
The shock I’m talking about is the kind that helps new hires at startups become acquainted with a venture’s cultural urgency.
Set by the founder(s), this urgency is driven by one ever-present idea: We need to survive in the market long enough to achieve product/market fit.
While this idea is often communicated in terms of runway length or the proximity the next investment round, its implications aren’t usually felt as acutely by staff as by the founders. That’s not likely to change.
However, the founders can influence urgency in a different way.
Urgency, Valuing Time & Rate of Learning
Every decision, experiment and dollar spent influences how long a venture remains in the market. For that reason, most founders think about urgency in terms of results. The number of conversions from marketing campaigns, deals closed by the sales team or product updates shipped.
And this is almost the right way to frame urgency.
However, it falls short because it doesn’t take into account two factors that are unique and different for every hire. First, how they value time and second, their rate of learning.
Not knowing about these two factors for each new hire usually means a founder’s call for urgency will be misunderstood or seem to fall on deaf ears. Even if the new hire’s desire is to respect the founders’ expectation to be (more) urgent.
And this is why I think urgency is a product of how someone values time and their rate of learning.
Assuming a new hire buys into the founder’s vision, they will arrive wanting to make an impact. If they think achieving their first milestone quickly equates to six months and their rate of learning is slow then it’s fair to say their impact will be (very) low.
This usually unfolds with the new hire investing four to six months in pursuing one or two key activities. These big bang efforts draw down on company capital, come with stories of how they worked at previous organisations and promise learnings upon the final milestone being achieved.
In contrast to this worse case scenario, a new hire is quick to set up a framework that validates hypotheses of the ways things are done today and another set of experiments to move the dial forward in the first 30, 60 and 90 days.
Implicit with the latter hire is a test and learn approach to cast fresh eyes on how business is done today. They are also focused on creating momentum in their job area. This is also inherently more cost-effective because they can course correct as they learn.
Here’s the rough method I use to assess each new hire.
Urgency = Value of Time + Rate of Learning assuming that:
- Perfect urgency = 20 (i.e. that of the founder)
- Value of time is a measure between 0 and 9
- Rate of learning is a measure between 0 and 9
- New hire will never eclipse the founder in terms of urgency
- Measurement is taken 4 times during a 12 week paid audition
A solid new hire might score 7 on valuing time and 8 for their rate of learning based on what they say in the interview process. 7 + 8 = 15, the urgency score. They will also score similarly during each checkpoint of a paid audition.
Measuring urgency over time is important. Think of it as a lead indicator of how consistently urgent the new hire will be.
This is a framework and providing you apply it consistently, the results will be helpful. But don’t overthink it.
Be concerned if a new hire consistently scores below 10. Be impressed if they score above 14 on average on a paid audition.
The first, worse case scenario hire would score well below 10 on average across the paid audition. And they probably shouldn’t survive the paid audition.
Because people joining ventures, who come from a large company or government roles, have lost touch with the value of time and money. Their roles have often driven them to become a custodian of a function or department and less of a business builder.
That will sound harsh, but for the most part, it’s true.
This is not to diminish their work experience, network or skill set. They are important. But the consequence of being a custodian, managing budgets that don’t directly affect their hip pocket and investing time in large organisation politics is a divorce away from the two lifebloods of startup ventures, time and capital.
The first test focuses on time. More specifically, it is designed to (re)acquaint a new hire with the value of time.
The question is how much momentum will the new hire create each week in the first four weeks? In other words, you want to see how much the new hire can learn as quickly as possible.
So, ask them, ‘What sort of experiments do you plan to run to create momentum in your new role in the next 30 to 90 days?’
Learning comes from experimentation. And at the heart of experimentation is methodical testing, listening and observation.
Effective new hires are quick to frame hypothesis and sense check them with existing team members. Soon afterwards they present a plan to start testing. Within days they will be launching experiments and feeding results back to you and the team.
This test is not at the expense of a new hire getting settled, asking questions or understanding their new environment. The point is solid new hires do this and start experimenting very early in their tenure. I’ll also point out that this test is for startups. Parallel processing like this soon after someone joins a large organisation is difficult.
The ‘money test’ comes second.
This test is designed to (re)acquaint the new hire with the value of a dollar.
Give the new hire $50 and tell them that’s their stationary budget for the next six months.
They can go anywhere they want. Target, Officeworks, anywhere.
They will return with less than they expected and if this surprises them, the exercise was effective. This is particularly useful with hires who have just come from a large organisation where items like stationary aren’t usually given a second thought.
You can extend the money conversation by showing them how founders think about money which I wrote about recently.
The founder/new hire two-way street
While these tests are useful, the paid audition or probation period is the one time when new hires and founders can determine ‘fit’ with little blowback if it doesn’t work out.
While founders don’t want to be overly prescriptive so as to observe curiosity and industriousness, there is a need to determine ‘fit’ as quickly as possible.
Similarly, new hires don’t want to assume too much about the company they’ve just joined and they need time to observe, learn and reflect.
The point here is that while founders can observe the activities and actions of new hires, it takes conversations to unpack what they are learning, even if they are displaying extreme urgency. Don’t welcome them, set them tests or objectives and then check in with them in a few weeks.
Schedule time to speak with them at least weekly. Encourage them to ask even the most obvious question and invite them to query you on the hypotheses that lead you as the founder to make the decisions that have led the business to where it is today.
It will make the inevitable exercise of sizing up one another more transparent and productive.
One last thing…
Hiring is difficult. We all get hiring decisions wrong from time to time and the financial and emotional consequences of those wrong bets can devastate a startup.
Experience tells me that urgency is a capability that startup hires need to possess to be successful. As a founder, the big idea of this post is to have a framework to assess urgency and the best way to put that framework into action is via a paid audition.