We rationalize this behavior with “lies we tell ourselves.” Here are a few lies people use to keep an ineffective employee: <ul><li>He is trying really hard. </li><li>She deserves another chance. </li><li>People really like her. </li><li>I feel bad for him. </li><li>He’s good at other things. </li><li>He has stuff going on in his personal life </li><li>She is in the wrong role. </li></ul>

Lies We Tell Ourselves

In our short history, our best hires were very Different from the team that hired them. They don’t seem Different now because they expanded our culture. They changed what Different looked like.There is a deep and natural human bias to hire people “like us.” Fight this bias. Hiring Similar means we value repeatability and efficiency over creativity and leverage.

Hire Different vs Similar

The best predictor of a successful new hire at eShares is if they like to get their hands dirty. Whether it is writing code, building spreadsheets, calling customers, or stocking the fridge. This is true at every level. Our senior managers are hands-on, care about details, and are not afraid to roll up their sleeves. They don’t last long otherwise.

Hire Doers vs Tellers

For most of this talk, I have talked about signals to hire. I’ll conclude with a signal to not hire. Confidence and ego are opposites. Modesty and humility are traits of the strong. Ego and arrogance is a disease of the weak and insecure. The truly confident don’t need people to know they are great. They are happy to know it themselves. And the truly Great use their greatness to make those around them greater.

Always pass on ego

This doesn’t mean expertise isn’t important. We are a company of specialists, not generalists. Each of us is an expert, or becoming an expert, in our domain. You cannot be successful at eShares without being an expert at something.

Hire Learners vs Experts

When eShares was a company of one, me, our culture was “my culture”. My culture was quickly replaced by the culture of the first ten employees. I couldn’t stop it if I tried — I was outnumbered 10 to 1. Today, the 37 of you that joined us since have vastly outnumbered the first ten. And thank goodness! Our culture today is far better than it was when we were ten and infinitely better than when it was just me.

Culture-contributors are better than culture-fitters

Much like startup performance follows a power law, so do startup employees. The most effective employees create 20x more leverage than an average employee. This is not true in an efficiency company — the best employees might work 2x faster than their peers. But in a high-leverage startup like ours, the effectiveness gap between employees can be multiple orders of magnitude.

Employee effectiveness is a power law

Most companies hire by consensus and committee. In a committee of N, each positive vote is worth 1/N of a hiring decision. However, one negative vote will reject a candidate. No matter how a strong a voter’s conviction, their vote will never count more than 1/N. Conversely, the slightest negative view will kill a hire. Consensus optimizes for employees with the fewest objections (least weaknesses). It works well to reduce False Positives but creates many False Negatives.**

Hire for Strength vs Lack of Weakness

It is important to note that Trajectory and Experience are not opposites. Trajectory is the first (and second) derivative of Experience. Most candidates have both and both are important. But Trajectory is far more valuable. Our job is not to hire for Experience. That’s what everyone else does. Our job is to hire people whose Trajectory will explode when they join eShares, pulling us along with them.

Hire for Trajectory vs Experience

Hiring means we failed to execute and need help. 
First, let me quell a misconception. Hiring is not a consequence of success. Revenue and customers are. Hiring is a consequence of our failure to create enough leverage (see <a href="https://medium.com/@henrysward/eshares-101-e96d792bdc69#.ww37jmxxz">eShares 101</a>) to grow on our own. It means we need outside help. The perfect business is a computer plugged into the internet. Anything more is just overhead.

Hiring Principles

Simple tips to determine if your candidates have the behavioural traits and skills needed for the role

books

Books

business

Business

leadershipandmanagement

Leadership & Management

communication

Communication

personaldevelopment

Personal Development

Hiring the Best in Class

Below is an excerpt from a talk I gave at the eShares Town Hall in November 2015. I hope it is helpful to other CEOs struggling with hiring. Hi everyone. As you know, I have opened 27 new headcount…