Thursday, February 03, 2005

Seth Godin on hiring

Seth Godin has an interesting set of articles (1st,2nd,3rd) on his blog about the current method of staffing, and the differences between small, entrepreneurial firms and large organisations. He is almost spot-on.

He is right in how small companies recruit. They do go to market, advertise etc. but they are less concerned about the job description. The managers haven't had to go through endless procedures to get the job signed-off, job evaluated etc. The hiring manager is often part of the management team, they can make real decisions.

Way back I was head of recruitment in a fast growing professional services firm. I reported into the MD. We would discuss not only the recruitment pipeline but what projects were coming up, where the demand was being created. I knew the business inside out. We would have roles we would like to fill (a senior public sector specialist for example) but we were never recruiting to fill a role, we were recruiting to build the business.

On most occasions senior staff members would make the hires, but I always had the ability to go to the MD. I remember several occasions when I did that. We may see someone who wasn't what we were looking for but we knew would be a good fit, and enable us to develop the business. We knew that one great hire could reshape the direction of the firm, not just at senior levels but anywhere. One of the founders' rules was 'all rules are there to be broken.' We broke 'rules', we became the fastest growing firm in the sector.

In many cases senior managers in big firms want to act like this, but they can't. Big firms have processes they have to go through, and structures where responsibility isn't clear (or where formal structures don't show how the business really operates). They are populated by people who know where the rules are (or at least the boundaries) and manage within the rules. As Godin rightly points out recruitment in these firms 'is totally demand based'.

Those who can make bold decisions in these firms rarely have strong relationships with those close to recruitment. They therefore don't have an ear to the market.

Here's my suggestions (and yes, I've seen it work in a big investment bank so I know it can happen).

1) Take one of your best managers, a senior high flyer, and tell them it's their full time job to worry about getting great people (hint, you probably won't find this person in HR)
2) Give them the authority to break rules
3) Make sure they know the business and it's strategies. They probably need to be very close to the CEO
4) Make getting great people a priority for all (yes, that probably means changing the reward structure)
5) Communicate to the market that you're always looking for great people & build the infrastructure to validate the claim. Ask speculative applicants why they are great - get them to sell themselves, don't just rely on a CV
5) Accept mistakes, but ensure you learn from them. Have a culture where if you make a bad hire you can part amicably.

I remember one of the senior members of the bank saying to me "I am not sure he's what we want at the moment, but I certainly don't want him as a competitor". We hired that person.

As demand becomes restricted this will start to happen more and more. However, there is a great opportunity for a big firm in each sector to gain first-movers advantage here. Question is, is it going to be you or your competitor?