Beyond Expertise: Hiring Leaders for Growth

0:01Yeah, yeah, we had a really good question that I thought would be worthy of discussion. and that was how do you hire for a role for which you know nothing about, specifically an executive leadership role? And I think every entrepreneur, if you achieve any level of scale, you're going to face this. Most of us, when we start our business and that business achieves any level of growth, it achieves growth because we're good at something. Maybe we're really good at marketing and so we're able to get leads. Maybe we're really good at sales and so we're able to convert them. Maybe we're really good at the product or the services side and so we're able to make people happy, but ultimately, and we're sort of able to build enough people around us to kind of make up for the areas where we're a little bit weak.

0:41But if the business is really going to scale, we're going to have to hire some people that are truly exceptional at those functional roles that we're not good at, and we don't know anything about, and we're not really skilled at evaluating talent for that.

1:01hey everybody Roland Frazier and Ryan Dice here with another episode of the business lunch podcast Ryan we had a big event we traveled all over the everywhere we did all the things work all the times how are you doing man I'm still so freaking tired I am so tired because you're right yes we had a we had a big three-day event um you and I are both of the introverted variety I was incredibly tired afterwards all i wanted to do was curl up in a ball and not be around people and then my wife who i love adore cherish more than any other human being on planet earth went to that yeah she said um so i live in austin texas austin has live music capital the world self-proclaimed has a big music festival every year called austin city limits and she said we've never been we should go and so we got tickets like to just pop in and then leave oh that's exactly how it goes yeah So we went to the Austin city limits music festival.

1:56Um, right after this event ends, I get to go and be around, uh, gobs of strangers in the 97 degree heat, which normally it's quite nice in Austin and you know, this time of year, not this year, my friend, hotter, hot, hot freaking so astoundingly, uh, and, and disgustingly hot. Um, so yeah, no, no rest for the week. Russ that owns the transportation company that, that provided your transportation said, man, he said, I'm surprised. He said, Ryan, Ryan booked from like 10 in the morning to 10 at night, every night for the Austin city limits. I was like, that can't be him. That's there's no way he's doing it for a friend and going to give it away.

2:44And then you told me, you're like, no, my wife wants to go. I was like, okay, that's great. Yeah. And I'll tell you, man, there's no way to do it. Like I couldn't figure out a way to hack it to not have to. I mean, so you have the VIP thing, so you don't have the line to get in necessarily. But when you were there, there's just a lot of people. A lot of people. And there's just no way to not be around a bunch of people that I could see. You know, we're at the VIP thing, but there's still just a butt ton of people. And I just don't care that much about music. I'm just, I mean, music is fine. Did you enjoy it while you were there, despite all of the...

3:23Because then there's the whole getting there and getting out, which is different than the experience of being there. When we were there, it was cool. We both kind of looked at each other when we were done. It's like, do we need to do this again? And we both kind of agreed, no, we don't. Like, I'm glad I did it. I can say I did it. I understand... Do we need to do it again the next day, or do we need to do it again next year? Well, we did it. We did it the days. We don't need to do it again next year. So we're good. We're done. That's impressive. We were going to, I mean, if you're going to, if you're going to be a bear, be a grizzly.

3:59So there you go. What about you? Did you actually get to rest up afterwards? No, as you, as you may remember, I flew to Las Vegas immediately after with one of our portfolio companies to meet with a bunch of people about acquiring it. And we had all of those meetings and it went well and looks like it's going to move forward. So that was really that was fun. Yeah. And then and then came home to some other plans that were made. So it's one of those. It's I knew, though, going in, there's like three weeks of there's an offsite tomorrow for two days. There's a trip to Salt Lake City. There's a trip to London.

4:37There's another event on the back of that. but come the end of this month i'm gonna get at least a day now i should go back to the the relatively uh not terribly busy life so that's i'm looking forward to that there's always seasons though right yeah yeah and and look we we complain but we wouldn't have it any other way i i i think we're commenting we're not complaining we're commenting i i actually would have it another way i don't think i would go to another music festival yeah i don't i'm not i'm not a music festival person yeah that doesn't sound fun to me okay well let's talk about something that is of interest to the people who watch and listen to this program which you have from uh i think some of the people at the event were asking some questions that you thought might be good is that that where we were yeah yeah we had it we had a really good question that i thought would be worthy of discussion um and that was how do you hire for a role for which you know nothing about, specifically an executive leadership role.

5:39And I think every entrepreneur, if you achieve any level of scale, you're going to face this. Most of us, when we start our business and that business achieves any level of growth, it achieves growth because we're good at something. Maybe we're really good at marketing. And so we're able to get leads. Maybe we're really good at sales. So we're able to convert them. Maybe we're really good at the product or the services side. So we're able to make people happy, but ultimately, and And we're sort of able to build enough people around us to kind of make up for the areas where we're a little bit weak.

6:07But if the business is really going to scale, we're going to have to hire some people that are truly exceptional at those functional roles that we're not good at and we don't know anything about. And we're not really skilled at evaluating talent for that. So whether I'm a marketing person and I need to hire an amazing salesperson or I'm amazing at sales, I need to hire an amazing finance person. How do you go about hiring for a role that you know little or nothing about? Any tips, strategies on that front? Yeah, I think so. I've been through quite a few hires lately and gone through different search firms processes.

6:50And I think that the processes are really helpful, the very first thing. And, you know, supplement all of this with your own reading of how to do this or watching videos. You know, ChatGPT or Gemini or Perplexity can be very helpful in helping you answer this question as well to supplement what you need to know. But I think the very first thing is to determine what is the actual need in the organization and then document what does the person who is going to fill the need look like. So here's our need. What's the title typically of the person that fills that need? Then what are the requirements of or what is the job description?

7:35Sorry, of of the job. Then what are the requirements for that person in terms of education, experience, etc.? And, um, that like just getting there to start to lay it out, I think is really important. And then I would also add to that. And I got this from one of the processes that one of the firms used is, you know, what does the personality look like as a cultural fit? Um, you know, what, what, what kind of personality matches the culture of the company? And, um, uh, after doing that, then can I, wait, can I stop you there? Cause I don't know, I don't know how to do that. Cause I don't know what the role is.

8:15Like, how do I write that? Do I, do I have to get a firm to help me with that? No, no. Um, so, so let's say, I mean, that's why I say just identify what's the need, what do we need? You know? So like, let's say, uh, pick the portfolio company of your choice. What do we need in that company? Let's say we need a, um, we're going to need a VP of sales. Okay. Well, you might, and you might not know that you need a VP of sales. It's like, so where is the company experiencing a challenge that we believe personnel could help with? Sales. Okay, great. So what position do we need for sales? Well, what do we want?

8:55Like, what are the challenges that we're having there? Because it could be we're having challenges with having enough people to make the conversions that we need to handle the leads and stuff that coming in. And then that might mean, well, then do we want a person who, do we want to go after the symptom, which is we need another salesperson. And so we're hiring for that. Or do we see this as a continuing thing where we're going to need lots of salespeople and we're growing at a good enough clip that we'd like to actually get a sales recruiter or a sales manager to handle that? I don't know. You know, you look at this, look at the situation.

9:34If we think for right now, all we need is another salesperson. Okay. Well then that's a different thing than we need somebody that's going to hire salespeople. And it's a different budget as well, because we're going to have the person that's hiring the people and supervising them. And we're also going to have the people that sounds more expensive. Um, and we're going to assume for this discussion, we know we're hiring a functional leader. So it's, it's a high level person and, but it's not an area that we're necessarily skilled at. So let's, let's operate in that assumption. Yeah. So, So then I would go, I would enlist the aid.

10:05If I don't have a, if I have a search firm, a good search firm is going to help you significantly with that. If you don't have a search firm helping, then I would go to AI and say, give me the, I say, I am, you are a sales, excuse me, you are a recruiter with 20 years of recruitment experience identifying sales team personnel for companies that are located in the United States doing between X and Y that are looking to grow their sales team, if that's what you're trying to do. Now you've got the role clearly defined. And then I would say, what is the title of a person who would be able to perform the following tasks, list the tasks that you identified that you want done?

10:50And what would the job description and the hiring requirements typically be for that? And I've gotten fantastic answers from that just in getting that first part done. That's not any of the interview part yet or anything yet. What are your thoughts on that? Well, yeah, I mean, so I'm trying to think if, so it seems like you're saying you don't know, so you need to tap an outside expert. Um, ideally, if you have the budget, go with a search firm who specializes in finding somebody for that functional. If you don't have that AI can work as well. What about tapping? Um, you know, have you ever leveraged just, if you know somebody who's an expert in that area, somebody in, in your network to say, Hey, can you help me find somebody or what, you know?

11:43I haven't had good luck with that. Because people are busy. Everybody in my network is busy doing what they do. And if I'm serious about doing it, to me, it's like selling your company, buying a company, any of those kinds of things. There's a process and you need to have a process that you're committed to. And so a part-time help me when you can favor, that's like, I could see, do you know, here we've identified all of these things. Here's what we've identified and give them the list and say, do you know any candidates that you would like to refer that might serve in this position? That's a fair ask.

12:17I think to ask somebody to go through the process is not particularly fair if you're not going to hire them and pay them to do that. And it's not their primary thing they're doing. I am so happy to hear you say that because this discussion came up in a group and that was what somebody said. They were like, oh yeah, just like, I know, like I've got some experience. I'm happy to help you with that. And what I said is just be really, really careful because this is a long-term process. And so are you really signing up for helping them run an entire hiring process for this role? Or it's like, oh, well, no, like I can help you, you know, maybe review your job description and I can kind of tell you, it was like, are you going to help with the interviewing process?

12:59Are you going to interview the people for them? Oh, no, I don't have time to reach out to. Right. Oh, no. Oh, OK. And so I think that's that's really, really important. If there's somebody in your network who has hired for this role. And I think that's a question I would ask if you've got a good, solid network of other business owners, entrepreneurs to go to them and say, hey, I believe that I need to hire for this particular role. I've done my research. These are the problems that I have. I think I need to hire for this role. If you have hired for this role or you know somebody who has been hired for this role, I would love to talk to you about that.

13:32So I think it's worth having discussions and conversations. That's one way to, you know, learn about that. You know, what should I be looking for people in this role? Who are the folks? This is a really important question to ask. Who are the people just below this role and who are the people just above? because like I didn't know for example that like the nuanced differences between a sales manager a director of sales and a VP of sales yeah to me it's like oh okay so they just manage a different number of people no in most sales organizations those are fundamentally different roles that you need at very different times I mean in most sales organizations a VP of sales is largely a recruiting function I mean they're largely doing that so you don't necessarily hire a VP of sales if you want to run a seven person sales team.

14:19So, so talking to people to increase your knowledge of a particular role and to get clear on the job title and the specific, um, and, and I think getting, getting really, really clear on the, on that, that role title, that's really, really important. Having interviews and discussions with folks is important, but just getting help from a, to help you run the process. Yeah. It, you need somebody who you're actually paying to run that process with you, not just somebody doing you a solid because they're not gonna, it's just too much. You need to set aside the time. If you don't have the budget to hire a firm, that's why I like identifying first, what's the need in the gap and then feed that into AI and say, what's the title of this person that does that rather than assuming, or even saying, give me all the different titles of salespeople.

15:09And then seeing where you think the peg fits. I like, here's the, here is what I'm looking for, the solution I'm looking for. What do we call that? Right? That I find to be really helpful because then I can say to check the work, what is the job description of, let's say a director of sales, and then let them do the job description and the deliverables for that position. And then does that match up to what we thought it did? Because I think that's like, you need to know what you're looking for very, very specifically before you go looking for it, because now the next step, and this is what the firms do, is they tap their network and all that.

15:48But basically more than anything, they go out to LinkedIn. And what I liked that one of the firms, YScouts, did for us was they sent us a, they said, this is not a candidate. This is a profile of somebody that we think would be a candidate? Does this look like an ideal candidate for you? Because this is what we think is the ideal candidate. And then they use the parameters that you sign off on for that candidate. You're like, well, I mean, this person doesn't have enough experience or this person didn't work in a big enough company, or they haven't seen growth from here to here, you know, or they weren't primarily responsible because they were assistant this, or they haven't yet served in that level position.

16:31They were a level under that. So this would be a step up. I actually want somebody that's got position here or they've got too much experience. They're probably going to be too expensive for us. That like all that you get out of the way so that you nail your ideal hiring profile, you know, your IHP. And then you're going to go out. What they're going to do is they're going to talk to everybody they know and circulate that ideal avatar of that hire. And then they're also going to do searches in LinkedIn and they're going to come back and show you profiles of people that they think might be good.

17:07And then they're going to do outreach to a lot of people based on the ideal profile and their preliminary search. So they'll then reach out to all those people that meet that preliminary search and the ones that respond, they'll actually talk to, do a preliminary screening for, which is if you're hiring yourself, you can say, what would the preliminary screen be for? But it's primarily a conversation that says, what are you looking for? And if they're looking for the kind of thing that fits and you get an idea of what the salary range is, then, you know, that that tells you that that's time to interview.

17:40So once you've done that initial stuff, then you go to the interview. And I would highly, highly, highly recommend a book called Motivation Based Interviewing. MBI is so much better than, you know, well, what do you think your biggest strength is? What do you think your biggest weakness is? it actually goes into putting them in to scenarios that require them to comment in a way that isn't the pat answer. You know, well, generally my biggest fault is that I work too hard and I take, you know, I take things too seriously. I just care so much. Yeah. I just care too much. You know, it's like, okay.

18:18The, this is basically, tell me about a time when you were in a team, when you part of a team and someone wasn't pulling their weight, you weren't the team leader, but you were part of a team and one of the team members wasn't pulling their weight. Tell me about what happened and how you handled that situation. I mean, that tells like, so it gives you situations that they would have experienced in the past that they're going to have to tell you a lot about how they deal with things, how they deal with conflict, how they deal with challenges with management, how they deal with underperformers, you know, all of those kinds of things, which is much, much more valuable, I think, than the Pat, you know, answers.

19:00So then, yeah, because on that front, how do you come up with the list of questions to ask? Because again, I don't know anything about this role. Yeah, right. I found it to be extremely helpful to go to AI. And I got, I mean, it's really funny, because even the search firms that I've talked to said, those are some of the better questions that I've seen. Really? So just going AI and saying, what are the interview questions that you would ask? Yeah. And I mean, you don't get the best answer right off the bat. You need to go back to what you want to, you know, so when you're looking for the question, you say, I'm interviewing candidates for, now you know the position, for a director of sales position who generally have the following qualifications.

19:42What are the questions that I should ask when the reason that I'm making the hire is to solve for the following things, and then you include the things that caused you in the first place to want to hire the person, then it'll generate those questions around that. And then you just pepper in your own, you know, your own experience of interviewing people generally, you know? So for me, like, even if I'm interviewing somebody for a position, I don't know, I want to know how passionate are they about what they do. So I'll ask, what are the resources that you consume to keep up on your, on your, you know, on sales.

20:19And if they go, oh, well, every year I go to the, you know, the XYZ convention and I subscribe to, you know, sales, blah, blah, blah. And, uh, you know, I'm, uh, you know, who pick your salesperson of choice. I'm a Grant Cardone, a Jeffrey Gittimer, you know, uh, whoever a solution selling, you know, fan person. Uh, so I've read all of that stuff and, uh, I really am passionate about that and blah, blah, you know, well, now I know that's somebody I want to, you know, that they're like, they actually are interested in that position, but I'll tell you, most of the people can't answer that question.

20:49They're like, oh, well, you know, I read blogs and stuff like that. I'm like, what blogs? Yeah. I mean, I can't think of any right now. You know, okay. You know, the good ones. Yeah. But I guess the thing, question I would have on that is, but if I'm not an expert, how do I evaluate the question? I mean, obviously they don't have an answer. And if they're him and hawing, then it's not a good answer. Who sounds best? But like, let's say it's more of a fact-based question, right? If you're going to ask somebody a scenario-based question. Again, if it's sales or maybe it's even a finance-related thing.

21:20How do you handle this particular thing? I'm not a finance expert. I don't know enough about the subject to know if they really responded correctly. What do you do in those kinds of areas? I have never found myself unable to evaluate from going through the process that we just talked about because the answers to the questions that you want are relatively self-evident. I probably wouldn't ask a question like, how do you lock a cell in an Excel spreadsheet when you're doing a pivot table to a finance person? Because I don't care. You know, I have to assume basic competence in those things. My questions are more experiential and fit, you know, with the culture.

22:08and can they handle the specific things that I want to do? So let's say that I want a sales director for a rapidly growing sales team, which was our example. If they don't have experience doing that, or they only have experience at a company that is significantly smaller, that's going to be a challenge. And so I feel like those answers are self-evident. But what we've done after that is once we've identified, we'll narrow it down to like three candidates and then we'll hire all three of them as an independent contractor to do a project that typically takes 30 days to do. We'll pay them to do the project and then we'll get, usually it's a strategic.

22:51It's not like go out and hire people for us. It's, you know, what's the strategic plan that you would put together for us to hire the next 20 salespeople that we need to hire in the next three months. And then each of them would do that. We'd pay them for their time for doing it. And then we look at the result. We would interview them about the results and ask our questions. And then if we like the work product and we like the answers and we like the person, then we're going to probably make an offer. Going back to the thing about not knowing if the answer is the right one. I think that this is really important for everybody listening.

23:25You're not going to know if the answer they made is the right one because you're hiring somebody who ideally knows more about this than you do. And I think that this is just something as, you know, as the business owner, you're going to have to die to a little bit. Now, if, if this is something that you're truly worried about and you want to make sure you're not getting completely snowballed, you can have some, you know, somebody, you could hire a consultant to help with the interview process to ask, like you said, some basic competency questions, you know, to do some background checking to make sure.

23:56But if somebody has a resident, you know, somebody has some work history, they will have done the work. They will have done the job. It is there. And so you're not really evaluating them on their process because they should be bringing a better process than you have. You just want to make sure they have one. So when you're asking them, like you said, the scenario-based questions, you're not listening to grade them on, well, do I think that's good or not? Again, ideally, they've got better ideas than you do. That's the difference between this. And so I just, that's, I'm kind of, I asked the question, but, but it's not really about you saying like, Ooh, did they get it right?

24:37Yeah. That's not the point. You don't know if they got it right or not. Like you're just trying to see like, do they have a process? If you're truly concerned about it and you want to make sure you can absolutely hire third-party experts. I've been brought in. I know when somebody was hiring marketers, they just wanted to make sure the person wasn't totally full of crap. I've been, you know, hired by friends for, I don't do this as a regular thing. Friends like, hey, can I pay you for a consult type deal just to sit in on some interviews to make sure that, you know, high, high level position there.

25:09They want to make sure somebody is not totally full of crap. Fine. You know, I'll do that kind of thing. But that's where, again, running a basic background check, calling referrals, you know, doing the references. Did this person actually work at this company? you know basic competency check check check check check you're just trying to find out do they have a process yeah um yeah and i and also like you said the um the having them do the test have you ever had somebody push back on the on the test saying or not the test i'm sorry the uh the paid gig no i haven't uh i mean like push back like i'm not gonna do that no um that's you know they may fall out of the process, you know, and tell the people that are doing it, you know, I don't know if it's a fit and maybe that, you know, so I don't, I don't know directly that that caused anybody to fall out directly, but, but that would be an easy no for us if it was the case.

26:07The other thing that I didn't mention is as far as answering, you know, the questions and how do you know if it's a good answer is they're usually being interviewed by whoever they're going to direct report to plus the major stakeholders of the company. So, you know, if they're at a higher level position, they're going to get at least three different people that are interviewing them. And those people are going to talk about what they thought about it as well. And I think that's an important part of the process. Yeah, exactly. So it's not your job. If you are the CEO, if you're the business owner and you're hiring somebody for a role that you're not an expert in, you are not evaluating them for competency within that role.