The Hiring Equation

The Hiring Equation

hiring-equation

Hiring is all the rage these days. There are thousands of companies worldwide trying to figure out how to update the hiring process for an Internet era, ranging from failure to moderate success. Even though Linkedin is the dominant player today, I often hear from friends about their bad experiences trying to hire through the platform.

I spent the majority of my “deep focus” energy of the past 18 months trying to understand the intricacies of how positive collaboration happens, mainly hiring. Traditional employment is only ONE form of career collaboration, but it’s the most popular, the one most people try to develop, and it’s vastly misunderstood.

In an effort to shed some light into the hiring process, I will share a “hiring equation,” a simple framework I came up with to explain the thinking of someone looking to fill a position. My hope is that it will help those trying to switch careers to better understand how to navigate the process, and also help recruiters do an honest self-assessment about their practices and how to improve them. Here it is:

Transference of trust + Solution orientation + Excitement for potential + Conservation of energy + Cultural fit + Assumption of visibility = Chosen candidate

Transference of Trust

Let’s say I want to buy a phone, but I don’t know much about phones. I can search on Google, explore different stores, read their specs, and learn what phone I need for myself… Or I can ask my friend to recommend me one, since he is an expert in technology, has no incentive to sell me a particular model, and knows my personality. I trust him, therefore, I trust his recommendation.

Hiring works the same way; employers need to trust the candidate. And if they don’t know him personally, they will look for sources they can trust and “transfer” that trust into the candidate. Friends in common, attending respected universities (ideally the same university of the employer), working at famous companies… These are all proxies of trust that help people decide between unknown candidates.

The important thing to remember about trust is that it’s emotional and primal. This is why referrals often get hired over better qualified people that the employer doesn’t know. In a traditional hiring process, companies take the most risk with a new hire, and the main question they want answered is “How can I trust this person to fulfill my expectations?” Turns out that “she’s a friend of my brother” is a better answer than “she has an MBA.”

In a world where where people switch jobs every 2.2 years, trust is the best currency one can amass to open up new collaboration opportunities. Instead of obsessing about having a lot of impersonal credentials, focus on making more friends, smiling more, and showing interest in everyone’s lives and careers. They will like you and trust you more.

Solution orientation

Last year, a woman called Nina Mufleh decided to do whatever it takes to get a job at Airbnb. After trying the “normal way” and coming up empty, she created nina4airbnb.com, with the purpose of persuading Airbnb that she was the right person to add to their company. The website explained her fascination with Airbnb, what business opportunities she saw, how she would pursue them if hired, and how her values aligned with the company’s.

Nina’s innovative resume-like proposal was a remarkable showcase of her drive, discipline, creativity and other intangibles that companies want in their candidates. She caught the eye of the media and was invited to be interviewed by companies like Uber, Dropbox, Linkedin, and yes, Airbnb. Finally she would be interviewed by her dream company that she was so perfectly suited for!

And she didn’t get the job.

No need to be sad for Nina; her campaign was a career success however you look at it, and she found a great position at Upwork thanks to her PR efforts. It’s worth going above and beyond to stand out in a crowded job market. But an equal important lesson is that it doesn’t matter how great you are if you don’t solve the need the customer/employer has. I don’t know what Airbnb was looking for, but it wasn’t her, no matter her remarkability, or how polished her presentation was. If I need a programmer, I don’t have an use for the best salesperson in the world.

It’s similar to having a job that gives you all the good perks but no salary. It’s hard to take it, isn’t it? When looking to get hired, make sure you cover the baseline needs, and then find ways to exploit your other skills and ideas.

Excitement for potential

One of the biggest mistakes people make in their resumes, Linkedin profiles and live answers to the ubiquitous “What do you do?” question, is to list past accomplishments and credentials. They say things like “I have a degree in economics from university X, worked four years in industry Y running their program Z to to help our clients get more ABC.”

This is cold information. It lacks context.

Competence visibility is asymmetric; you talk about those four years and remember all the things you did day to accomplish X and Y (often polishing details that would take away prestige from the narrative), but I wasn’t there. I can’t relate or assess your full personality and capabilities from your story.

Talking about past accomplishments or credentials doesn’t generate excitement for what we can build together for the future, which is where we are headed, and the reason we are having this interview. When imagining the future of any collaboration opportunity, showing potential is (slightly) more important than experience.

However, the kind of potential you need to show depends on the people and organization you may work with. Different cultures may want to see potential that you will…

…be diligent, quiet and obedient.

…grow into a leader in the organization.

…question the status quo and be an agent of innovation and improvement.

…wear multiple hats and cover many different needs.

…put your network connections at the disposal of the organization.

…not leave the company.

…not be a pain in the ass.

…repeat the results of your experience.

Don’t get me wrong: your experience matters. But 1) you must frame it in a way that relates to what is going to come, and 2) between two-equally (in)experienced individuals, potential tends to tip the scale.

Conservation of energy

Monica Anderson, of the Stanford Transhumanist Association, and founder of several A.I. initiatives, says that 0.0001% of our daily decisions are conscious. This is what she calls the “reasoning” process. The other 99.9999% is what she calls “understanding”, which is unconscious and always “on”. We can’t help to understand that a table is a table when we see one, that we need a sweater when we are cold, or to interpret English once we’ve learned it.

The problem with asking people to “reason” what they should do is that reasoning requires a lot of energy and focus. Humans try to avoid reasoning as much as possible, and let their unconscious mind do the work of going through daily life. We are wired to be “lazy” and conserve energy because our ancestors didn’t know how long they would be without finding food, or when they would have to run from a threat. Back then, if you didn’t save energy, you risked dying,

While the world has changed and it’s much safer to reason through most things, our biology has not changed.

What does this have to do with hiring?

For most companies and employers, hiring people does not make the “reasoning” cut. They make most decisions unconsciously following what they “understand” to be right and prioritize what’s less demanding. A big problem with how people want to make their way into a new job is to hope/expect/push for people to “reason” why they should be selected. They wish that quality or talent (whatever that means) decides who gets picked.

However, while employers believe that they are dedicated to quality, in reality they want “good enough.” They want to NOT think. This does not mean they will hire whoever comes through the door first, but rather that between two hypothetically equal candidates, they will hire the one that demands less reasoning.

In business, I call this “hand-holding the sale”: do your best to predict the exact series of questions and decisions of your potential customer (in this case the potential employer) and find a way to make their thinking process and subsequent decisions easier until you “close the sale.”

Those who can think ahead of their employers and save them the effort of reasoning have the best chance of getting picked.

Side note: This is why the best jobs, with the least competition, are often “co-imagined” by the employer and potential employee, and never published online. Instead of waiting for the busy person with the problem (employer) to make the time to reason what he needs and how to find it, proactive professionals help them figure it out and how they can help them. The employer is now thankful for both finding a person with the solution, and for saving himself time and energy of having to decipher his situation.

Cultural fit

Culture is a fancy word for “how we do things around here.” The great Clayton Christensen defines it as “a way of working together toward common goals that have been followed so frequently and so successfully that people don’t even think about trying to do things another way.” The bigger the organization, the longer some “rules” have been around.

A good friend of mine that runs a very successful startup says that the number one question he tries to answer when interviewing a potential hire is “Can they work within our team?” A case could be made for this question to be the most important thing an employer needs to get right with each new member. When looking for a job, it’s not a good idea to try to fight or cheat the culture fit filter, but rather evaluate it to the best of our ability in order to avoid suboptimal collaborations.

Culture is important to get right because it automates countless daily decisions for those that share its values. It allows for tacit agreements between team members about what’s right and what’s wrong. It doesn’t matter how talented a person is, the odds that one individual is able to bring more value to an organization than a cohesive team are almost zero. Any organization, even with a shitty culture, will accomplish more than one person with the best principles and work ethic.

It follows that a strong culture is often also why companies fail. Doing things differently sometimes is necessary for survival, but hard to execute after a culture has endured long enough. I believe this is what Peter Thiel refers to when he says “a startup messed up at its foundation cannot be fixed.”

No one can be a great candidate for every organization. To be a great fit for one team means being a bad fit for another. For example, myself and many of my entrepreneur friends don’t care much about partnering with people who invest heavily on credentials such as degrees, press mentions, awards, etc. Credentials are easier to invent/manipulate than building useful products or services, which is why most people choose to accumulate credentials over building stuff. Paul Graham likes to say starting a startup is hard because it’s where gaming the system stops working. Most people prefer to play with rules where they can game the system because it allows them to get respect and rewards without being evaluated exclusively by their output.

Many organizations reward pretense over results, ass-kissing over merit, novelty and controversy over quality, the status-quo over ambition, etc. Most would agree those are not ideal values, and yet most people still prefer those cultures as long as they don’t have to deal with the pressure of building useful stuff. Arnold Kling, from the Library of Economics and Liberty gives the example of people that don’t go to college:

“Sometimes you have to do something that doesn’t make sense to you but we do it because we do it in the organization, and it needs to get done because the organization demands it, and if you won’t do it, that’s gonna cause problems. […] Right now, not going to college sends a negative signal. You’ve demonstrated clearly that you’re a non-conformist in a world where in many organizations you need some level of conformity.”

If you are a good fit to work with my entrepreneur friends, chances are you would be a bad fit for working in academia, media, the public sector, non-profits, big corporations, etc., since they reward persuasion and pretense over proven value. And viceversa.

We’re better off identifying the organizations that share our values, and demonstrating that match to the employers, instead of trying to convince them that we are someone we are not.

Side note: There is something to be said about the process of not knowing your own values and principles and figuring them out by experimenting with different organizations and cultures in the early stages of your career. The hope is that, as you grow older, you get better at avoiding poor cultural fits.

Assumption of visibility

It amazes me when I hear employers say that there’s a “skills gap”: the notion that there are not enough skilled people in the job market for the positions they want to fill. As if they had full visibility of all the talent out there.

Maybe the right people never heard that the company was looking. Or maybe people don’t want to work for that company because it’s not attractive enough (but don’t tell the company). Or maybe they would be great fits but the company has outdated talent filters, and ignore the best person because they didn’t present themselves in a particular way. Or maybe the company doesn’t foster a dialogue with outsiders so they can help think of an ideal collaboration.

When employers talk about a skills gap, they are describing their hiring struggles as an external problem. They ignore that a bigger reason behind their struggles is their poor understanding of their own incentives, shortcomings and biases.

Is there competition for great talent and experience? Of course. Is there a shortage of trained talent in certain industries? Yes. But is this why most companies and people have trouble finding the person or career opportunity they are looking for? Not at all. Before we talk about a skills gap, we need to improve how individuals’ and companies’ can find each other.

If you are someone looking for a new career opportunity, show up in more places more often, so you can be seen by those looking for someone like you.

Improving visibility of potential professional allies is where I see the biggest opportunity for improvement among all the hiring factors. Millions of people, from both sides of the hiring table, are looking for someone that would like to join them. They just haven’t had a chance to meet or imagine their future together yet.

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