November 19, 2021

Author and Chairman & Founder of ghSMART

Dana Safa

1Huddle Podcast Episode #64

On this Bring It In podcast episode, 1Huddle’s CEO and Founder Sam Caucci sat down with Geoff Smart, author, Chairman & Founder of ghSMART, which has helped Fortune 500 CEOs & boards, billionaire entrepreneurs, and heads of state to confidently achieve their goals through hiring, developing, and leading talented teams since 1995.

On this episode of Bring It In season two, Geoff sat down with Sam and discussed hiring the right talent, the importance of diversity in the workplace, and how to effectively lead remotely.


Audio available on Apple Podcasts, Spotify, and Google Podcasts. 

TOP 3 HIGHLIGHTS

Below are some of the insights Smart shared during our chat, edited for length and clarity. You can find more Bring It In podcast episodes here.

  • Good leadership isn’t this kind of intuitive thing that you’re born with, but it’s a set of practices that you can master.
  • Culture is the first thing you need to get right to be able to hire great people, which drives your revenue.
  • Diversity is good. More of it is better.

FULL TRANSCRIPTION

Sam: So Geoff, I guess to kick us off, could you tell us a little bit about your work? You’ve written a ton of books. You’ve talked as a leading expert on these topics around hiring and talent. What got you into it? 

Geoff: Yeah. So I’ve always been interested in entrepreneurship and leadership. What got me into it, reading In Search of Excellence back in the eighties by Tom Peters,  also the Peter Drucker books, were really just interesting reads as a kid. Flash forward, I got to study with Peter Drucker, the father of management in graduate school, at Claremont. And I was just very interested in the fundamental idea that good leadership isn’t this kind of intuitive thing that you’re born with, but it’s a set of practices that you can master.

And I think leadership is one of the most important levers for elevating the quality of life of humanity, like sort of picking your favorite cause whether it’s for-profit, government, not-for-profit, good leadership makes the difference between getting great results or not. So I’ve always been fascinated with it.

I started my company ghSMART while I was still in graduate school. And that was 20, almost six, years ago. And we’re just having a blast today, advising leaders of all size companies and, out of our 12 offices around the U.S and Europe.

Sam: What’s the hot topic for you right now that you find yourself talking to leaders about?

Geoff: Managing remotely. Like this is kind of weird because companies have been global for decades and decades, but it took COVID and a pandemic to really highlight how important some elements or aspects of leadership are in it and any kind of a remote context. So we had asked a lot about, how do you manage remotely, and is this going to stay or is everybody going to be hopping on planes again? 

I just got my second Pfizer vaccine a few weeks ago. I’m on a flight tomorrow to visit colleges with my daughter for the first time in a year. I’m going to be on a commercial flight. So, yeah, I dunno. It’s basically how do you manage remotely or lead remotely, and what’s different than leading in a more traditional office environment, we get asked a lot. 

Sam: What is your biggest piece of advice on that front?

Geoff: Yeah. The biggest piece of advice on that front is the three elements in one of our books called Power Score. We found that if you’re good at these three things, your team is 20 times more likely to achieve their goals or achieve success, whatever success means in that context, then if you as a leader are not good at all three things. You have to be good at all three things, and I’ll tell you what they are. And it sounds pretty obvious, but we looked at over 17,000 cases of successful and unsuccessful executive careers. So, you know, it’s hugely data-driven and we could have found anything, like, being able to speak pig latin could have been the thing. We could have found anything that matters in driving leadership success, but we found these three things matter the most. 

So one is being able to prioritize. And so, check this out, in a traditional office environment, you can have a lot of stuff going on and employees could be unclear about what are the goals or what am I supposed to do, and just constantly asking you in a traditional office environment. It is a little harder to do remotely. So we say, Hey, look, be really clear on what the organization’s goals are, what every person’s goals are. And it’s better to have a smaller number than a bigger number. And you’ve heard this a million times, Sam, leaders get sort of drowning and distracted and having too many goals or tasks to do. So basically the emphasis is to make sure as a leader you’re clear and have a small number of goals for folks.

That’s one, two is hiring and developing talented teams. So we call it the who part, sort of who’s on the team. So you can do hiring remotely. You have to do hiring remotely. Yes. You can follow all the steps in our Who book about good hiring remotely. They do work, so it’s not like it doesn’t work remotely, but it is harder because you have to be more disciplined about following the steps for good hiring, using zoom and video than you do when you have just sort of more time and more in person time with folks. 

So the hiring piece is important, extra important when you’re managing remotely. And then the third and final one is called building relationships focused on results. So, this is sort of like, what do you communicate? Whether you’re an entrepreneurial company or a global 1000 company, what are you communicating? How are you building relationships? Who’s talking to who, when, how often. That kind of stuff is really important. You can be more disciplined about it, I think, in a remote context. And just basically the punchline there is, make sure the right people are talking about the right things.

Let’s say that if you’re going through turmoil and let’s say you’re in the hospitality industry and it’s pandemic time and it’s this kind of weekly trench warfare, you’re going to need like daily huddles or weekly meetings with groups of people to call out what’s happening, what actions are going to be taken, et cetera. If you’re cruising along and business is great, and you don’t want to swamp the field, then maybe don’t have so many meetings, that kind of thing. 

So building relationships focused on results as the third skill in the power score framework, all three of those things seem to me just sort of extra important in a remote context then when you have the luxury of being around people in the same building. 

Sam: Your book, Who, is awesome. And it’s one of those books that becomes, I massacre books, I have a highlighter and a pen and three other colored pencils. I’m just like a monster. And your book became one of those totally massacred, taking a lot. 

Geoff: Good!

Sam: And what I liked about it was the practical piece. Specific line of questions, the specificity around how to handle the interview process was really great. My question for you is around identifying people that have the right skills for a job today. What advice do you have for hiring managers or leaders? Cause there’s a lot of talk today around being tough to find workers with the right mix of skills for work.

Geoff: Yes.

Sam: What are you saying on that front? 

Geoff: Yeah, so it’s interesting. There are different pieces to the problem, right? And so in the Who book that you mentioned, we identified four steps that if you follow them to good hiring, you should be able to achieve, and you do achieve a 90% hiring success rate, which is really high.

The average manager in the world that we’ve studied, CEOs and executives across dozens of different countries and cultures and SIC codes and types of businesses. And this is the case, or, par for the course is to get it wrong about half the time. So making a hiring mistake, 50% of the time is what’s normal, which is horrible, as defined by like a year after you hire someone, do you regret you hired them? 

If yes, you regret it, that’s a hiring mistake. If you don’t regret it, it’s not hiring mistakes. It’s a simple definition of what hiring success means. But if you follow these four steps, you can achieve 90% hiring success. Certain people ask me all the time, what’s a hard one or today what’s different? 

I think the two hardest parts are not figuring out what the skills are that are needed. That’s not that hard. We sit with clients all the time. We say, Hey, what’s the job? What are the goals? What does the person need to do? How do they need to do it? In about 20 minutes, you can come up with what we call the scorecard for the role. So that’s not hard. 

Step two is harder, which is sourcing. How do you actually source talent? We’ve advised companies and very niche industries that say, Hey, we can’t find enough talent. We’ve advised companies and organizations and kind of weird geographies where they’re like, Hey, it’s hard to find talented people willing to work here. So we will double click on that one in a second. There are a couple ways to source more talent, but the one I probably get asked the most often is like that part of the process of hiring, how do you source that right talent? 

And then the third step is, I think, the hardest step, and this is called the select step. That’s when you have candidates and you have to pick a winner. It’s not easy to figure people out. It just isn’t. People don’t just have like an A, B or a C on a jersey, then they walk in your office and you go, Ah, there’s an A, I want to hire that person. 

So that’s the select step. And that’s around doing fancy interviews that really get at what someone has done in their life and then their career and therefore what they’re likely to do on the job, working for you. 

And the fourth and final step is called the sell step. I don’t think that one’s that hard. That’s basically like once you’ve figured out the skills they need, that’s the scorecard. Once you’ve sourced candidates, that’s the source step. Once you’ve done these interviews and you’ve selected, ah, that’s the person I want to hire. How do you sell them? How do you close the deal?  They’re just a few simple rules of thumb for how to close someone once you decide you want to hire them. 

So those are the four steps in this day and age. I still think steps two and three, the sourcing and the selecting, are always the most challenging steps.

Sam: As a start-up, just speaking from experience, and our experiences are very unique. Do you work with a lot of startups or technology companies?

Geoff: We don’t, we used to. I did a Ph.D. dissertation almost 30 years ago on the topic of how venture capitalists evaluate and pick the entrepreneurs that they picked to invest in. So it was a really fun study. It’s really cool. I got about 70 venture capital firms to share with me their methods for how they get to know the entrepreneurs they invested in and what determines who gets invested in. So that was very cool. I was kind of marinating in early-stage venture work for that and the early parts of ghSMART, we’ve kind of gravitated up markets that today, we work with probably about 20 of the 500 biggest companies in the world and a whole bunch of large private equity firms and larger companies are more of the focus.

I do a lot of speaking to entrepreneur audiences. I feel like I’m in touch with the entrepreneurial community at EO and YPO. And I’ve talked to thousands of entrepreneurs every year and they tell me what their challenges are. I think with entrepreneurs, you used to have too much work to do and not enough time. And so “process” is like a dirty word. And I’m sitting there on the stage saying, Hey, you got to follow this four-step process for good hiring. And folks are tough. Or it’s hard for people to allocate the time to do it. 

That said, the entrepreneurs we have worked with, I’ve seen firsthand who go from just a start-up and just a twinkle in your eye of what the vision is, to mega multi-billion dollar net worth, self-made. Those folks take the time to hire well, they really do. I mean, it’s really different. I’ve seen firsthand the care that some of the most successful entrepreneurs I’ve seen have taken, especially in the early days about making those two or three key hires, key functional area hires to really propel the business forward. So I’m here to say, don’t just go hair on fire, you’re too busy to follow a process, like maybe be too busy to follow other processes, but when it comes to good hiring, you’re not gonna want to cut corners on that. 

Sam: Totally. Hiring is one of those things in these broader venture capital. And I remember a conversation with one VC I had a year ago, pre-pandemic, and the conversation went something like, you need to build your sales team so you need to hire four salespeople a month, every month. If they don’t succeed every 60 days, turn them. And do that for 12 months until you get three good ones. And I remember being like, you’ll hire 48 people and end up with three? He’s like, don’t worry about it. Hire fast, fire faster, churn and burn, and just go. As a person who cares so much about culture, absolutely no way am I going to do that. 

Geoff: Yeah, I really hate that advice that you got, and I’m glad that it seemed weird to you. I mean, culture is so important and the churning approach, we call it the Terminator approach to hiring, we have all these pet names for the ways of hiring. The art critic is a person who just sort of uses gut feel intuition, sort of like the way an art critic appraises a painting, like, boom, you’re hired. The Terminator is the person kinda like the VC who described an approach where we just hire, hire, hire, hire, hire, and see who survives and then you fire the rest of the folks. 

Yeah. That’s bad on culture. Culture really is, this is a weird realization for someone who lived in the world of culture and hiring and talent for his whole career, just a couple of years ago, it really dawned on me that culture is the first thing you have to get right in order to be able to hire the great folks into your firms. So in my world, culture is super important. It drives your ability to hire and retain great people, which then drives your revenue and operating performance, and ultimately the value of the business. 

So I just looked up while you’re talking, my firm’s Glassdoor culture rating, we’re 4.8 out of five, I got a hundred percent approval. I feel so proud of that. It takes a long time, I think, to really build a great supportive culture that folks hear about and they want to come work at your company. So, yeah, the churn and burn approach is a real culture burner.

And to me, it seems like a very short-term way of building your business. The smarter way to do it is really figuring out how to build the best darn culture in your industry and get the word out, brand it, and then folks will find you and you can have your unfair share of talent and grow a great business.

Sam: What do you think Geoff, over the last year in the communities around social justice and our, I would say we’re at, you’re living in a moment where we’re having a lot more conversations around diversity and equity specifically, your expertise is sitting really on the front lines of how do we make workforces more diverse? How do we get different experiences and people that maybe look different into the org? Has any part of your scorecard shifted or changed or have you thought about it?

Geoff: It has actually. I think over the last couple of years, we’ve, as a global business community, gotten better at calling out unconscious bias and hiring approaches at the scorecard stage, very specifically saying, Hey, we want, we want to build a diverse team. And so if you have diversity, whether it’s racial, ethnic, LGBTQ plus, whatever, diversity is good. So more of it is better and that’s a much more deliberate mindset that we see enlightened business leaders practicing these days. 

There’s a book behind me here, since this is an audio podcast, your listeners can’t see, it’s called A Great Place to Work For All by Michael Bush. His firm does all those workplace surveys for Fortune, that are just coming out right now, the best companies to work for. So this company does those surveys, and Michael, he’s an advisor on my board at ghSMART. He’s very articulate about saying, Hey, diversity, equity and inclusion, do it because it’s the right thing to do and/or do it because it’s also like the smart business thing to do.

So he has all the survey data right on companies. And he’s basically like, I’m kinda tired of making the business case for diversity. He’s been making it for decades. And so the business case is like, Hey, you know, diverse organizations and teams beat non-diverse ones. But it’s almost kind of annoying to have to make the business case. It’s the smart and the right thing to do. 

In fact, one of our interns at ghSMART, Kaleel Green, who’s the first Black president of the student body of Yale, chose to work at my company over the last three months, which I thought was a great honor. And he had a great experience. And he wrote a piece that will appear somewhere, in HBR, I think in the next couple of months, with my colleagues and basically saying enough with the business case, this is just basically an obvious best practice for modern managers is like, be aware of and seek to build diverse teams like, like the end.

So at the scorecard level, valuing diversity and being specific about wanting to have it on your teams is something much more on the forefront of the minds of business leaders these days, I’m thinking that’s great. And then there’s a lot of progress being made there. And then in the actual interview process, you got to watch for bias because bad interviewing is kind of like, oh, I’m looking for someone who I have chemistry with. Oh, you played lacrosse too, I played lacrosse and I like champagne and you like champagne and like there’s a lot of really culturally sort of charged things that people feel good about because other people like the things they like who are maybe from their culture or whatever. That’s bad. So having an interview approach that is so heavily focused on chemistry sort of leads to cloning.

But if you have a more fact-based interview approach, like the one that we propose in our Who book and what we practice at ghSMART, you’re gathering real data on what people are actually able to do and you’re able to more unbiasedly evaluate the probability that they’re going to be able to perform well in your company.

So, this is all good. I think it’s in the right direction though, some companies are much better at it obviously than others. And I think those companies will continue to outpace the other ones in overall performance.

Sam: Totally. I’ve got one final question for you. We’re living in a time where there’s a lot of folks out of work that are going to be coming back and hopefully in the next few months, there’s a lot of people who are coming back to a job that’s maybe shifted or changed.

There’s a lot of talk around robots and automation and infrastructure bills. And I want to talk to you about the statement around the future of work, this concept, future of work, and what your hope is for the future of work. 

Geoff: Yeah. My hope for the future of work is that we don’t all just sit around and let the robots do all the work because I think work, I believe, this is just a personal belief, I think work does drive a sense of fulfillment and impact, and it’s important for people and for society. So what I think will happen and what I’d like to see happen is we won’t just automate everything. I think we’ll automate less interesting tasks. We’ll automate stuff that robots can do well, and I think that can increase the quality of life of people and their job satisfaction also. 

I think there are higher-level skills that folks better learn if they want to not get obsoleted. So if doing summing, counting things quickly and accurately, something that’s going to be very automated very quickly, maybe that shouldn’t be your only skillset, but advising, that’s a higher level of skill set that robots can’t quite do super well. Empathizing is a higher-level skill set. I don’t care if you’re a doctor or you’re a technologist or you are in manufacturing and trying to really empathize with customer needs or if you’re in consulting, I think empathy and empathy skills are wonderful for folks to continue to build and develop if they want to not be obsoleted by automation. There’s going to be lots of analytics and database analysis that can then make the humans doing advising a little extra smart, but they’re still going to be an interface sort of person to person at the high end of the food chain of empathizing, problem-solving, and ultimately advising other humans.

So I think whatever industry you’re in if you can get out of the part that can be automated and kind of like up-skill to the part where empathy and strategy and problem-solving and communication are the skills, those are the ones that are going to take longer to be automated, I believe.

And I think extreme, last thing Sam, I think extreme specialization is another safe place for folks to go. In the Who book we say, try to hire the specialist, not the generalist. And I think that applies for job seekers too. The more refined and technical and narrow and deep your knowledge of something or somebody, whether it’s customers or suppliers or whatever, a certain part of the market, the better. I think it’s more defensible to be an expert and to be sort of the world’s best firm at something very specific and narrow, or as an employee to be really good at something that’s needed, that’s specific and narrow rather than to just be the sort of generalist thats looking for a job, 

Sam: Geoff, I’ve really enjoyed the conversation. And thanks for taking time.

Geoff: Pleasure. I did as well. Thanks Sam.

Topics Discussed: Automation, Training, Talent, Future of Work, Culture, Remote Work, Diversity, Equity

Dana Safa, Manager of Digital Marketing at 1Huddle

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