Half of the battle when it comes to making business decisions in our current landscape is knowing what’s possible. Whether we’re talking specifically web development (HTML5, CSS3, responsive design, etc), or any other aspect of running a business – marketing, customer service, human resources, legal, accounting, strategy, and the like – it’s impossible to be even close to an expert in all of them. Things are changing too fast. The best that I can hope for is to have an idea of what’s going on, of what’s possible if we need to improve something in one of those areas. I need to do this in a relatively short amount of time. And so I skim. I skim my Google Reader, I skim magazines, I skim Twitter. Most of the time I just read a headline plus maybe a few sentences, and then move on to the next piece of news. My goal isn’t full comprehension, it’s getting a gist of what the article was about in 15 or 30 seconds, and then to move on to the next.

When I do this, I’m creating a “mental database” of what’s going on in the world. Often times when we encounter a problem, the first thing I do is think “I remember hearing about xyz company that had the same problem” or “there’s this cool new website/software/technology that might solve our problem”. From there, I usually only remember a small part of where I saw the article. Maybe I remember how I read it (say Twitter) or where I read it (say Wired.com) or who shared it with me, but I’ll start to dig backwards and usually find what I’m looking for in a matter of minutes.

Only then do I start reading more traditionally, aiming for full comprehension. I’ll send an article to my Kindle, buy a book, find other online resources, or whatever makes the most sense for the particular situation. So, to me, skimming is a great enabler. It’s a highly efficient path to more knowledge. I can consume vast amounts of incredibly resourceful material in extremely short periods of time, and then circle back and dig deeper if and when I find it necessary.

Thankfully over time we’ve grown and now I don’t have to go at everything alone. First I had partners. Then we teamed up with a lawyer and an accountant. And then we started hiring employees. We have more money, more connections, and more experience. All also great things.

However, I haven’t really lost the mentality of “solving by learning”. Most of the time this is still a good thing. If I don’t know a specific programming technique, if I don’t know how to use a specific piece of software, if I don’t know enough about a service that could help grow our business, I’m more than happy to spend a weekend reading up on it until I know what I need to know to get the job done.

Other times though, I’ll foolishly dive in to something that isn’t my expertise, doesn’t need to be, and can be accomplished better by me not learning it. Either there’s someone else who can do it better – one of my partners or our employees – or there’s an existing service out there that solves the problem. This is odd to say, but it’s been a challenge to learn what to learn and what not to learn (that’s a tongue twister!). When you’re naturally used to learning and doing everything, delegating and outsourcing take some getting used to, as does determining exactly what to continue to do and learn vs what to outsource and delegate.

In the past we never would have been able to afford Google Apps for Business, Backupify, RescueTime, ProXPN, Pandora, or any of the many other services that we now happily pay for because they solve a business problem. In the past I probably would have spent considerable amounts of time attempting to solve the same problems for free. Worthwhile then for sure, not worthwhile now.

Another great recent example is our hosting provider LiquidWeb. We switched over to them in a matter of days during the great server disaster of 2008. I think that those few days took a few years off of my life. Just re-reading those posts stresses me out! After the dust settled, my initial instinct was to take control of everything involved with managing our servers. While not my expertise, I decided that I needed to learn how to be an expert systems administrator.

And so I started spending some nights and weekends learning. It only was natural. Except during that time something awesome happened. I had to start several tickets with the LiquidWeb “heroic support” and I came to notice a few patterns. Each email was responded to within minutes by a sysadmin who actually knew what he/she was doing! They were always happy to go above and beyond to solve the problem quickly. If I needed to call, a sysadmin always answered and could help me right away.

Over the years I’ve spent less and less time doing any of the sysadmin tasks that I do know how to do. For instance, I can install a SSL certificate. It’s not hard. But it does take me a few hours. Instead, I can just shoot them an email that says “I’d like a SSL on domain X at IP address Y and you can bill it to my account” and it’s done within a few hours. They have a team of experts willing to help any time we need it. Their service goes beyond anything I’ve ever experienced. Even though we pay them quite a bit of money for our two servers, I never expected to essentially have my own team of sysadmins available to me 24/7/365.

More recently, their migration team handled the transition of Detailed Image over to a new server. Moving DI (or any e-commerce site) is more complex than the average site because we needed to preserve our IP address, SSL, and be PCI compliant. There were a few minor minor hiccups, but overall they did a much better job than I ever could have and they did it in a matter of days from start to finish (the actual migration only took a few hours). There was frequent, clear, communication between myself and the engineer doing the work. It was like he was a member of our team.

Because of past server disasters, because of how critical having the site online is to our business, and because I naturally want to do anything that’s important myself, this was something that was hard to give up control on. But it also caused me to reflect on when it’s intelligent to do something myself and when it isn’t. We’re at the point where not ceding control to a migrations expert who does this every day for a living would be crazy.

…Plus I had backups upon backups in case anything went wrong, that also helped ease my nerves

*Fresh out of college, I also had the oft-assumed ability to learn quickly, a skill that I believe diminishes over time if you don’t continuously learn. One of the many reasons I think the best time in your life to start a company is when you’re in college (that link goes back to my third post ever, from 11/25/2005)

Most days I work from 1pm to 9pm here in Spain, which translates to 6am to 2pm Chicago time. That gives me all the time before lunch to enjoy the light of day and all the activities that encourages. I find myself more interested in working out, more eager to read books, and generally infused with more energy for both physical and mental activities.

Over the past few years my average sleep schedule has been roughly 10 PM – 6 AM. When you compare that with a midnight to 8 AM sleep schedule, which is similar to what I was on previously, there are really only four hours of my day that are different: 6 AM – 8 AM and 10 PM – midnight. I’m essentially trading a two hour block at night for a two hour block in the morning.

Occasional I slip back in to a later schedule, whether it’s because of work or social life or I’m just being lazy and sleeping later. When this happens I notice that I don’t like how I spend those hours in question and inevitably force myself back on to the early riser schedule.

Similar to @DHH, I tend to spend those additional two hours in the morning reading, working out, or getting ahead on work for the day. I also enjoy the peacefulness associated with knowing that everyone else is sleeping (and therefore won’t be interrupting me). Comparatively I seem to spend those two hours at night watching TV or playing Xbox. Not that I don’t enjoy those things, but ultimately I’m a much happier person when I’m doing more of the former and less of the latter.

The reality is that this small subset of our customers is not at all indicative of the vast majority who shop with us and rarely contact us. Those are the customers that make our business successful. Without them, we wouldn’t be able to run the business that we run the way that we run it.

One of the ways that we try to say “Thank You” each January is to send all of our best customers from the previous year a $20 gift certificate along with an email thanking them for shopping with us. It’s just a simple way to let them know that we notice how much of their hard-earned money they’ve spent with us, and that we sincerely appreciate it.

Today I sent out this year’s emails. Here’s an example:

For instance, some developers solely want to develop websites all day long without ever worrying about the other facets of running a business. And there’s absolutely nothing wrong with that – there are plenty of jobs where you can thrive doing just that. However, I know that I would personally get bored out of my mind if every single day I booted up my computer and built websites all day long.

It’s been a busy and unusual last few weeks. Aside from the general busyness of of the holidays, I spent a lot of time setting up laptops for Reece & Bobby, getting their training plans ready, and then actually training them the past few days. It’s an exciting step for our company, but it’s definitely out of the ordinary. We’re also upgrading/migrating Detailed Image’s server this weekend, as well as reviewing our ’11 numbers, and beginning to work on the next phases of LockerPulse (finally!). All stuff that’s also a bit out of my ordinary routine, but also really enjoyable and fulfilling, which ultimately makes running a business more fun to me than most jobs.

I learned a lot about us this year. Shit is going to happen. That’s life. The unfortunate reality is that we’re less in control than we think we are. What you can control is how you react. And we reacted by having our best year ever. We set revenue records for our largest day, month, and year, all while increasing our profitability. We worked on our culture and made two hires. We managed to keep LockerPulse growing without slowing down on Detailed Image. The business has never been in a better position.

Here’s hoping for continued prosperity and a little more peace in 2012.

Happy New Year’s everyone!

Again I’ll pick up right where I left off at the end of Attracting Quality Job Applicants. At this point we had crafted our job application to act as a natural filter by making the application process take a little thought, and we had promoted the posting using our sites and social media accounts, the career center websites at local colleges, LinkedIn, and Craigslist.

Reviewing the Applications

Pretty quickly applicants started coming through. Not a gigantic wave, but we would get one or two a day. The goal was to evaluate these applicants enough to decide whether or not they made it to the next round, which consisted of three sample customer service questions (more on that below).

The first thing that we were looking for was whether or not the applicant followed directions. If they didn’t follow our instructions on the cover letter, or if they failed to put the correct subject line in the email, or any of the other built-in filters that I touched upon in that last post, they were eliminated from further contention.

If they followed the instructions, we’d review their cover letter to see how well they answered each of the questions. We’d review their resume to see if they had relevant experience. We’d also pay very close attention to grammar mistakes and sloppy formatting. This person – as well as probably anyone else we hire – had to have a strong attention to detail.

Shockingly, I’d say maybe a third of the people who applied were atrocious. Their inability to spend 30 minutes applying for a job, one that could provide for them and their families for many years to come, is sad to say the least. They were put into the “no” pile right away. Another third did a very solid job and were easy passes on to the next round. The final third were tough – they had an error here and there, but for the most part they were minor and potentially something that could be overlooked. People are human after all, you don’t want to eliminate a potential hire early on simply because of a typo or something along those lines.

We decided to make these decisions by consensus. There are three of us. There weren’t that many applicants. We thought it best that everyone saw every application. One person might miss something that another picks up upon. When an app came through, the first person to review it would email the others with their thoughts and then once everyone had chimed in we’d email back and forth as long as it took to come to a consensus. Generally this took less than half a day. Immediately I would then contact them. Speaking of contacting them…

Communicating with Applicants

Before we go any further I wanted to expound upon one of my reasons that most hiring processes suck:

It’s a very uncomfortable process for the applicants. They never know where they stand or what’s next. It’s not uncommon for someone to wait weeks before hearing a response from a company they apply to.

We’ve all been on the other side of the hiring fence, and we all hate this uncertainty. I’m sure you dislike it as much as I do. That’s why we contacted everyone as soon as we made a decision throughout the entire process. Generally within a day or two we would let the candidate know where they stood, whether they were moving forward or not. I feel like doing this is only fair. The least that you can do for someone is to let them know where they stand. It hopefully makes a stressful process a little less stressful. It is, after all, people’s livelihoods that we’re talking about here. It pisses me off how poor most companies are at this, and I’ve always vowed never to let my company treat people with such disregard.

The Next Round

If a candidate was a “yes” to continue forward, we sent them an email thanking them for their application and notifying them that “in the coming days” we would be contacting them with more information about the job as well as some sample customer service questions that we wanted answered within three business days.

This was one of those things we did by design. First, we wanted to see who took the time to write back and say “thank you.” Each email back and forth was another data point on how well they communicated. I think everyone except one person wrote back. Not writing back wouldn’t disqualify them, but it certainly wasn’t a positive.

We also wanted to forewarn them of the impending three-day limit on the responses because that was an absolute deal-breaker for us. If they couldn’t spend 30-45 minutes on writing samples over the course of three business days than they weren’t cut out for a job where there will be lots of writing quick email responses.

I generally waited a day or two and then sent them that next email. In it there were three sample customer service questions. This technique was taken directly from that 37signals job app that I mentioned in the first post. Each one was pretty easy to answer by spending a few minutes on Detailed Image. We asked them to “provide a concise yet thorough answer as if you were an employee helping out this customer via e-mail, using our website as a reference.” Here’s a sample:

“I just purchased my first BMW and I want to take really good care of it but I have no idea where to start. Can you help point me in the right direction so I can clean and protect this car inside and out?”

The good answers linked to our Detailing Guide, Ask a Pro Blog, and/or Starter Packages, as well as congratulating the customer on their purchase and also inviting them to contact us any time if they had any further questions.

For each of the three questions, we had a variety of possible answers that we’d accept, and for the most part everyone who answered the questions did a very good job.

Being Upfront With Candidates

One of the other things I mentioned that I hate about most hiring processes is that:

It’s not uncommon for a last-minute deal-breaking curveball (salary, hours, location, etc) to appear that wasn’t communicated early on that would have saved everyone a bunch of time.

We didn’t want this. We didn’t want to waste our time going through a long interviewing process just to find out that a candidate didn’t like something about us. Nor would they want to spend all of their free time interviewing for a job that they wouldn’t even want.

So while the job description contained a lot of information, we decided that we wanted to provide them with a thorough list of anything and everything that might sway their interest. We did this in the form of a two-page PDF that I attached when I sent over the sample questions.

We had bullets in there hyping us up a bit:

One of the best parts about a small, fast-growing organization like Pure Adapt is that we can and will adapt your job to your interests and skills. There is no ceiling at our company – if you work hard, do good work, and respect your peers, we will continue to advance you.

And:

Unlike some jobs, we will not require that you commute to work when the weather is bad. During this past winter, a particularly bad one, we closed five times due to snow storms. If we think that our employees cannot make it to work safely, we will shut the warehouse down for the day and ask you to work from home.

As well as bullets that we knew might talk some people out of the job:

We do our best to ensure that our warehouse is a safe and comfortable work environment. We provide bottled water to all of our employees, we have a kitchen area with a refrigerator and microwave, and everything is cleaned regularly. However, it is still a warehouse and it can get dusty at times, despite our best efforts. During the winter it does get cold. We generally wear sweatshirts, jeans, and winter hats most days during the winter. We replaced the heating system with a much better unit this year so we hope that it will be warmer in general, but it will still be a cool environment in the winter. Generally the Spring through Fall is great, but those extra hot summer days can be a bit warm.

We also included all of the salary and benefits information in this PDF. We debated it a little, but ultimately decided that it was best to include it upfront and get rid of people who thought the job might pay significantly more or have some benefit that we don’t offer. That said, I think we offered a great package. We did a lot of salary research on Salary.com and also used Inc.’s 2011 Compensation Guide. The total package that we offered was higher than similar jobs in our area and more comparable to this type of job in a bigger city.

In general, our thoughts are to pay someone market value for the job and then give them clearly outlined opportunities to “jump the curve” and increase their role to a position that requires more responsibilities but also has a higher market value. To me, cost of living raises are basically a given, but to get a gigantic raise there has to be a gigantic increase in value to the company. In our short history I can say that we’re more than willing to provide those raises when someone does an exceptional job. Actually, “more than willing” isn’t the right phrase. “Super pumped” is probably more like it, because that means that they’re helping our company succeed. Nothing makes me happier than rewarding someone for doing great work.

We did have a few good candidates drop out because of the information in this PDF. It sucks a little bit, but ultimately it’s for the best if we’re not a good fit for each other. Luckily we did have a nice solid group that had done great up to this point and we were ready to interview.

Interviews

Everyone we decided to interview had followed directions, been responsive and polite in their emails, and done a good job answering the sample questions. In short, we felt they all had the aptitude to do the job. What we wanted to accomplish with the interviews was to get to know them a bit personally, see if they’d be a good culture fit, and ask them a few questions. The goal was to keep the interviews short and sweet – roughly 30 minutes.

For each person the questions were different. We asked at least one behavioral based question, one question to test their problem solving skills on the spot (a good example is to play a game of twenty questions, although we used a different game in these interviews), and a few questions about their resume. The exact questions differed based upon what type of information we were looking to get from them. We wanted to address any concerns we had through those questions.

We decided to have all three of us do one single 30 minute interview. I know that it sucks for the applicant to be 1 vs 3, but again we wanted everyone to hear and see everything. Given that we’re not super experienced at hiring, we needed everyone’s full attention to detail to ensure we didn’t miss something important. We did our best to take turns asking a line of questions so that it was sort of like three 10 minute one-on-one interviews with two people watching and not three people firing questions from every direction.

To ensure that we were able to spend the full 30 minutes asking these questions, we emailed over a list of pre-interview questions for them to email back to us prior to the interview. It was both a way to save time in the interview and it also acted as one more test, one more email exchange. They were all yes/no questions like “Do you have a reliable source of transportation to our warehouse?” Stuff that you have to ask, but that isn’t worth wasting face-to-face time on.

For a location, we decided against using our warehouse for this initial interview. It’s a bit out of the way for most people in the Albany area, and it’s also difficult to find us once you enter the park. You have to get a permit from the gate and then follow pretty precise directions. We also didn’t want to interrupt the day-to-day operations by having interviewees coming in and out all day long.

Instead, we decided to rent a room at a local coffee shop, Professor Java’s Coffee Sanctuary. The location is central to almost everywhere in the Capital Region. It’s no more than a twenty minute drive from Troy, Schenectady, Albany, or any of the suburbs. It’s also a steal – $90 for three hours, and that includes food! Whatever food you order comes off the $90. We ordered dinner prior to the interviews, and offered drinks to our interviewees. The food total came to around $60 or $70, so the cost for the room was only ~$25 plus a tip. Can’t beat that! We go there semi-regularly as it is, but we’ll definitely be renting it out again anytime we need it.

Making a Final Choice

In theory, we had the best possible scenario. We had multiple candidates that we believed could do the job. After the interviews there was not an immediate consensus on who we wanted to offer the job. We had several great candidates, and they all had completely different backgrounds, which made it very difficult to compare. Ultimately we decided on the person that we felt did the best job from start to finish in the application process and also had the best long-term fit at the company. It wasn’t easy, and by no means were we 100% sure.

Once we made the decision to hire Reece, we emailed him letting him know that we’d like to offer him the job, and asked if he’d be able to come in to the warehouse for roughly an hour the following Monday. We wanted him to meet the entire team, see the warehouse environment, and then officially present him with the offer and decide upon a start date. He will be starting the first week of January and we couldn’t be more excited!

Afterword: The Risks in Hiring Like This

First and foremost, despite how logical this hiring process seems (to me anyway), it doesn’t guarantee anything. You’d need hundreds, if not thousands, of data points at all sorts of companies to determine whether or not this truly is the right way to hire someone for a position like this. I think it increased our chances of hiring the right person, but increased chances doesn’t guarantee anything other than that. It’s possible that we hired the perfect person. It’s possible that we hired the wrong person. Time will only tell. People like guarantees, but when it comes to hiring there are none. You do the best that you can and then go from there. I think it’s far more important how you handle the right or wrong person once you determine they’re the right or wrong person than it is that you pick the correct person each and every time, a goal that will prove impossible for even the best.

There is one other major risk that you have to be willing to accept when you hire like this: you might not find anyone. Sure that’s a risk with all hiring processes, but because we had a somewhat challenging application process we didn’t get hundreds and hundreds of applicants. And the applicants we did get were subject to all of the hurdles that I’ve outlined in these posts. At times we wondered if anyone would make it. Were we being too hard? Were we being unrealistic? Thoughts like that were constantly up for discussion. I’d encourage you to stick to your guns and shoot for the best of the best. Just realize that it might take longer to find the person that you’re looking for. If we didn’t like any of the applicants – a potential reality going right up to the interviews – we were fully prepared to wait until the Spring graduating class where we would have theoretically had much larger pool of candidates viewing the job boards. If you’re looking to hire someone fast, and the speed of hiring is as important as anything else (say, a seasonal hire), this process isn’t going to work.

With all of that said, I hope this series of posts was insightful and helpful. After all of the comments I’m going to edit all three posts and then turn them in to one big essay for the essay section.

Merry Christmas all!

For some jobs this is easier than others. Developers, for example, can be evaluated by their prior work and/or by giving them a small sample project to complete. A warehouse worker can be evaluated by having them come in and pack orders for a day. In both of those examples, despite being completely different jobs, you can test almost the exact working conditions relatively quickly. Customer service is much more difficult, because their prior work isn’t publicly available, and because it can take many weeks of training before they have the knowledge to answer even some of the most basic questions. The onboarding time for a customer service employee is likely going to be longer than for any other position we hire. It requires a vast knowledge of how our website works on the front-end and back-end, how we process and ship orders, and at least a basic knowledge of auto-detailing.

Thankfully, we’re not alone when it comes to this problem. 37signals has been discussing this problem on their blog, in their books, and in their podcast for a few years now, and I’ve been paying close attention. They’ve grown rapidly, and, like us, have realized that support is one of the few things that doesn’t scale nicely – it grows linearly as you grow. They also confirmed my aforementioned theory that it’s much harder to “try before you buy” when it comes to customer support. This podcast on hiring with Jason & David gives a great summary of their thoughts and experiences. Over time they’ve iterated the process to place a strong emphasis on writing samples. This is pretty obviously reflected when you take a look at one of their applications.

We used this as a starting point for our application process. You’ll see many of their fundamental ideas peppered throughout our hiring process. I can’t thank them enough for sharing their experiences publicly. It’s one thing to know that you should assess an applicants skillset, it’s another thing completely to know how to do it in a way that might actually work. They’ve hired more customer support in the past year than we may ever hire, so even with their small sample size they’ve been able to learn things and draw conclusions that we may never have on our own. Even a sentence as simple as “2-3 months on-ramp” in their application gives us a guideline for how long it should take to train someone. We thought it might take a few months, but it’s affirming to know that other companies aren’t doing it in 2 weeks.

37signals is also relatively small. Their support team is roughly 10 people. IBM’s hiring process, no matter how robust and accurate, probably never would work for us. Just like ours would probably never work for them. We needed some practical guidelines that would work for us, and they provided that, just as (hopefully) some of the information I provide here will help a few other small businesses.

The Application

Our goals with the application were: to provide a clear description of the job, to assess the candidates writing skills, to assess the candidates attention to detail, and to act as a natural filter to ensure that the applications that we did review were serious applicants. We’ve got work to do growing our company. We didn’t want to sift through hundreds of random resumes.

Our application is still posted up on our website for reference. Looking at the application, let’s break down those goals in to a bit more detail.

When it comes to providing a clear description of the job, we listed out, in order or importance, the responsibilities that this person would assume. In an effort to be as transparent as possible, we provided examples of customer service questions, links to our Wholesale, Affiliate, and Product Reviews programs, and specified that this person would have to help out in the warehouse packing orders. If you weren’t interested in all of those things, we wanted you to stop right there.

If that sounded interesting, we next created a “You…” section (borrowed from Milk, Inc.) to give candidate a detailed description of what we were looking for. There was definitely some hesitation with posting some of that info (what if they used that information to fake being the exact person we were looking for?) but ultimately we decided that honesty was the best policy and had faith that our rigorous process would expose anyone who wasn’t genuine. Not that it’s impossible for that to still happen, but we thought that the pros of being upfront more than balanced out the cons.

I thought that the “Qualifications” sentence “Bachelor’s degree in business, marketing, management, or communications, or relevant job experience is highly preferred.” was very important in communicating what type of company we are. Degrees are nice, experience is nice, but ultimately we’re not going to eliminate a candidate for not having them. “Highly preferred” doesn’t mean “required.” It’s about finding the best candidate for the job. Period.

The “Perks” section was intended to give the applicant a taste of why it’s awesome to work at Pure Adapt. We viewed selling ourselves as just as important the candidate selling themselves to us. We’re looking for a mutual fit where both parties are excited about working together. At every step of our process we devoted a substantial amount of effort in selling Pure Adapt. There’s a reason why we launched the redesigned website along with the job application. We wanted to put our best foot forward, from showcasing our design and development skills, to expressing in our writing why we’re a different employer than most.

To assess the candidates writing skills, we asked them to forgo the traditional cover letter and instead write a cover letter that explained three specific points unique to this job application. Each point required a decent amount of thought on their end. They probably never had to think of those things before, so we hoped that we were getting a completely unique and thoughtful response. The second point, “Why you want to work at Pure Adapt and not somewhere else” also required that the applicant actually spend a few minutes researching our company before writing.

The writing samples sure acted as a filter. If someone just sent a generic cover letter, or if they missed any of our required points, they were eliminated. If someone can’t come up with a decent reason why they want to work for us after reading our site and the application, we really don’t want to waste our time seriously considering them. There were also a lot of other built-in filters: we specified the email address to send the app to, the subject line, the due date, and to include both their resume and cover letter. If any of those things weren’t exactly perfect, they were eliminated.

Promoting the Listing

The most important filter of all, as we later found out, was requiring that applicants visit our website and email in their application. This was by design for sure, but we didn’t realize just how much of a deterrent that is for people. I’m over-generalizing here, but my impression is that most unemployed professionals take the “quantity over quality” approach that the 37signals guys mention in their podcast. By disabling the feature on our listings that allowed a one-click application we likely lost out on hundreds and hundreds of applicants. Our ratio of views to applicants on job boards was hundreds and hundreds to one. I’d imagine that ratio would have been much much lower had we made it easier to apply.

Again, this was by design. We weeded out the lazy people.

To promote the listing, we did four things:

1. Posted on our blogs, our social media accounts, and obviously on the Pure Adapt website.
2. Posted on the career center job search sites of all of the local colleges: Siena, St. Rose, SUNY Albany, RPI, Sage, and Union.
3. Posted the job on LinkedIn.
4. Posted the job on Craigslist.

Craigslist is obviously the most questionable. We did it because we were looking for someone local, it’s free, it was easy to just link people to the app on our site, and because other local business owners that we knew had good results with CL.

The only money that we spent to promote the listing was on LinkedIn. Job postings were 50% off during the month of October. So the $95 listing that we bought only cost $47.50. That should be a signal to anyone doing hiring that October isn’t the best month to find applicants. But it was what we had to work with, so we did the best we could.

Somewhat predictably based upon the difficulty of our application and the time of year, we didn’t receive a ton of applicants, and many of the ones we did receive were downright horrible and didn’t come close to meeting our criteria. However, in the end, we got what we wanted – a small group of talented, qualified candidates. In the next post I’ll explain how we went from the applications to making the hire.

So we set out to do something about it. While it’s impossible to pick the right person 100% of the time, we sought out anything we could do to improve our chances beyond just a shot in the dark. Over the course of the early part of 2011 we read any relevant books or articles we could get our hands on, consulted with HR professionals and HR researchers, and spoke with every small business owner we knew. All in an attempt to be the best that we can be when it comes to growing our team.

As I touched upon in my last post I’m going to devote my next few posts specifically to the hiring process that eventually led to us hiring Reece, our new “Sales, Marketing, and Customer Support Specialist” (without getting into specifics about the candidates themselves of course).

I’m going to share as much as I can because I think this is an oft-overlooked topic that’s really important to discuss.  Just because something has been done one way for a long time it doesn’t mean that it should continue to be done that way.  I can’t think of anything that embodies that principle more than hiring.

So What’s Wrong With The Way People Hire?

At a high level, here’s what I think is wrong with most application processes:

• They reward interviewing skills and resume-writing skills, both of which are useless in most jobs
• They over-value “big-names”, whether it’s schools or prior employers or certifications or post-graduate degrees.
• They under-value whether or not someone has the skills (or is willing to learn the skills) that will make them good at the specific job they are applying for.
• They minimize or completely disregard whether or not someone will be a cultural fit.
• HR departments do the recruiting, resume collecting, and sometimes initial round of interviews without having any true understanding of the job, passing through unqualified candidates while rejecting qualified ones.
• It’s a very uncomfortable process for the applicants.  They never know where they stand or what’s next. It’s not uncommon for someone to wait weeks before hearing a response from a company they apply to.  It’s also not uncommon for  a last-minute deal-breaking curveball (salary, hours, location, etc) to appear that wasn’t communicated early on that would have saved everyone a bunch of time.
• They have a low success rate.  Just ask anyone who has hired 25+ people.  Usually they’re not too happy with their batting average.

In big companies the process usually goes something like this:

• R&D needs a new engineer.  They submit information about the job to HR.
• HR goes off and does whatever HR does to collect applications.  Post on Monster.com, go to job fairs, whatever.  They just try to assemble as large of a pile of resumes as they can.
• HR filters through the resumes and picks out an initial batch of applicants to interview.
• HR does a round of interviews and sets up the next round of interviews with a group of engineers from R&D.
• The team from R&D meets with and interviews the candidates, generally with minimal preparation.  They might ask about certain skills or pick specifics off of the resume to talk about, but really they either “like” someone or they don’t.  It’s very much like a first-date (more on this below).
• The team picks their top candidate based upon their resume, HR’s feedback, and their interviews, and then makes them an offer.  Occasionally there’s a personality test, and there’s usually a background check, but after that if the person accepts then that’s the end of that.

It’s not hard to see why this isn’t exactly optimal. The whole thing is extremely weak at determining whether or not someone can actually do the job!

Attempting to “solve” these problems means that as a company you have to throw away everything that you know and start from scratch.  Lucky for us, we’re small and we’re really interested in this stuff.  We were willing to put the time in because of how important hiring is to us. That meant that we had to change the rules a bit.  We weren’t going to make it “easy” to apply. We weren’t going to make it a goal to get as many applicants as possible.  The goal was to find one right person, not a bunch of wrong people.

SWAY

Some of the best research that I read along the way came from a book Sway: The Irresistible Pull of Irrational Behavior by Ori & Rom Brafman.  It was reassuring in that it made me feel like we were on the right track.

Starting on page 75 (of the paperback) they tell the story of Professor Allen Huffcutt who has spent almost twenty years studying and analyzing job interviews.  One of my favorite passages:

“Your typical unstructured interview” – the common “first-date” method – “just doesn’t do well.  We have a long history of research confirming that.”

Just how “not well” is surprising. When researchers conducted a meta-analysis they found that there’s only a small correlation between first-date (unstructured) job interviews and job performance. The marks managers give to job candidates have very little to do with how well those candidates actually perform on the job.

“You’ve got a very limited time exposure, applicants put on their best show, managers put on their best show, and – not surprisingly – you just don’t see the realities of that person in twenty minutes.

There’s also a section where Huffcutt shares the list of the top 10 most common asked job interview questions and how 9 of the 10 are utterly useless at predicting whether or not someone will be good at a job.  They’re either self-evaluating (why should I hire you?), future based (where do you see yourself in five years?), or retrospective (why did you leave your last job?).  Turns out that people are really good at lying, are bad self-evaluators, and are bad at predicting the future or what they really want…which makes those types of questions useless.

The question that wasn’t useless?  It was “what do you know about our company?” which can actually tell you if they’ve taken the initiative to research your company before the interview.

My other favorite passage:

Because they confine managers to specifics, structured interviews [where the focus is past work experience and job-related hypothetical questions] fare much better than their unstructured counterparts. The meta-analysis showed that [these interviews] are six times more effective than first-date interviews at predicting a candidates job performance.

But even then interviews aren’t that great as a predictive tool, because some people simply know how to sell themselves better than others. As counterintuitive as it sounds, you don’t need interviews at all. Research shows that an aptitude test predicts performance just as well as a structured interview.

“But then again,” Huffcutt pointed out, “everybody expects an interview.” Huffcutt’s solution is to turn the process on its head. “Given that the applicant is expecting an interview,” he offered, “the ideal system is to use the higher accuracy techniques up front to make your decision – things like mental ability tests, work samples.” Then “when you’ve identified your top candidates,” he advised, “you use an unstructured interview to really sell them on taking the job, get them excited about the company. You can use it for some very useful things, just not for the hiring decision itself.”

Bingo.  And that’s how we approached it.  Next post I’ll get in to the details.

In September we set out to hire a “Sales, Marketing, and Customer Support Specialist” for Detailed Image. We recently made an offer to our leading candidate Reece for this position. He accepted and is scheduled to start in January. Reece is a recent graduate of St. Rose college. He handled everything we threw at him exceptionally (and believe me, we didn’t make things easy on our applicants). He’s also a great culture fit – his family owns a body shop and he’s a passionate sports fan, among other things. We can’t wait to get him settled in and interacting with our customers.

I mentioned in that post in September that we “spent a very long time meticulously fine tuning our hiring process for this person.” We heard repeatedly from candidates that this was unlike any other job that they applied for. While it’s fresh in my head I plan on dedicating my next few posts to exactly what we did and why we veered away from a traditional hiring process.

The good news doesn’t stop there. We also recently had another full-time employee accept an offer from us. Bobby has been working part-time for us in the warehouse while finishing up his degree in Math at SUNY Albany. It became evident very quickly that he was an extraordinarily sharp guy. He picked things up fast (he’s one of those people you only have to say something once to), he worked extremely hard, and he was extremely accurate (important for inventory or pulling/packing orders). Often times we’d notice him doing little things more efficiently than we had trained him to do. It also doesn’t hurt that he is Mike’s cousin and that I’ve known him virtually my entire life. Again there’s a perfect culture fit with Bobby.

He’s the type of person that you don’t want to let get away. It just so happened that many of our next “pain points” were right up his alley. So we made him an offer to join us upon graduation in May as an “Analyst” (or at least that’s what I’m calling the position). He is going to be assisting Mike with our accounting and finances. He is also going to work with me on what I call data analysis projects. We have been collecting data for years now. We have more data than we’ve been able to mine. With Bobby and I both having a strong statistical background, I hope we’re able to do more of what we’ve been doing – like this shipping study from a few years ago, which I’ve continued to do yearly – as well as investigate things that we haven’t been able to get to yet, such as better forecasting models, the true lifetime value of a customer (should we be willing to pay $10 or $20 or $50 for a new registered user?), and testing out about a hundred other hypotheses I have floating around in my head.

Both Reece and Bobby will be joining Charlie full-time at our warehouse every weekday. They will be assisting Charlie in the daily operations as is necessary, just as my partners and I do now and will continue to do to some extent. While Bobby wraps up school he’ll only be working part-time, but we’re going to try to get most of the training done during the semester so that he’s ready to hit the ground running in May.

We hope that this group becomes the team that helps take Pure Adapt to the next level. It’s exciting times for us!