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Up-skillOR vs Up-skillEE

Up-skillOR vs Up-skillEE

There are several critical business decisions that are driven, often subconsciously, by arrogance; one of the most critical is around recruiting and hiring. I often write about Blue Ocean strategy but despite its proven higher ROI, companies still regularly pursue a Red Ocean approach driven by overconfidence that they are simply smarter than their competitors (your competitors also think they are smarter). Recruiting is another area where overconfidence and arrogance can not only lead to sub-optimal decisions but also inhibit growth.

The mistake is rooted in the belief that they can train someone to fill an open position so the person would out-perform a candidate with experience. Thinking you will do a better job of training the person than a previous employer is an example of arrogance, unless you have a proven and reputation as being the best of the best, it is unlikely you can actually train someone to be the best of the best. More importantly, you neglect a tremendous opportunity for your company.

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Up-skilling your company is more important

One of the biggest opportunities when recruiting is improving your company’s skillset. One of the very best people who ever worked for me, who has now gone on to achieve much bigger and better things, taught me never to hire someone who did not bring a new skill or attribute to the team. When he interviewed candidates, he not only ensured they had the skills for the target position, he would reject anyone (and it did make recruiting challenging often) who did not add something to the team. If we had a bunch of great producers, he would hire another producer who was not only fantastic at production management but might have design skills our team lacked. If he was hiring a designer, rather than take another strong artist, he would wait for an artist who was not only talented but may have come from a different industry that had a unique take on UI.

What his approach showed me (and the results were incredible) was that the real value in hiring is not filling a need but up-skilling everyone on your existing team and making them better. You can look at it mathematically:

  • Candidate A is brilliant. You can train her to be a great performer. She will deliver 100% value * X (where X is output) after you train him, thus the ultimate value to the company is X.
  • Candidate B is very good and but also brings a new skill (i.e. live operations management). She will be very good at her job (maybe a little weaker but I am not advocating accepting weaker candidates), so 90% * X. Other people on your team will also learn live ops management from her, making them all 10% better. Even if that is only 5 people, that adds 5 * X *.1; .5X. The total value to the company of this hire is 1.4X (so 0.5 better), not even considering the training costs avoided with candidate A.

Although this example is an over-simplification, it shows the leverage in hiring an experienced candidate and bringing their skills to your organization rather than focusing on developing a great employee from scratch.

You may not be ready to train to be the best

Unless you are truly the best in the world at something, you will not be able to train someone to be the best. At most, you will train them to be as good as you. If you are a Designer, you might believe you can train a designer who is coming straight out of university to be great. The reality is hiring a Designer who worked at Apple and was trained by Jony Ive is likely to yield a better designer than you could ever develop.

In effect, you are capping the new hire at the skillset of the person or people who will train them. Very few people are the best in the world, so assuming your company can do a better job training someone than anyone else could train them reflects arrogance rather than farsightedness.

You are missing a critical indicator of performance

Another problem with hiring with the intent to teach the candidate the job is your missing during the recruitment process the best indicator of how they will perform. While “past performance does not guarantee future success,” as anyone who has ever read an advertisement for a mutual fund knows, it is a damn good indicator with job candidates. As I previously wrote, interviews, personality tests, reference checks, etc., create an illusion of validity when evaluating candidates and are highly inaccurate. Conversely, work samples and experience are most predictive of success in a role. If you are hiring someone who has never had a similar role, with the plan to train them, you increase greatly the chance of a bad hire.

Experience is not an excuse for mediocrity

One important consideration when hiring someone is that experience should not be an excuse for accepting mediocrity. While there are benefits to bringing on someone with experience, it does negate the need to hire a great candidate. Someone with a mediocre track record probably has a low ceiling; they will be perpetually mediocre and not help your organization significantly.

You should also not equate a big name company on someone’s resume with great experience. There are both good and bad people at big (and even great) companies, it is actually often easier for these people to hide their weaknesses at a big company (their great colleagues can compensate for their weaknesses). You need to assess whether they did a great job at the position you are hiring for, not whether their company had great results.

Internship programs are great

This post should not be seen as a black and white blueprint for hiring, as there are many great opportunities to hire people with little or no experience, particularly creating an internship program. There are certain positions where experience is not needed or helpful. There are junior positions where it is quite easy to train people (though you still miss the opportunity to bring in people with different skills or experiences).

Finally, and most importantly, bringing in younger interns generates cognitive diversity. They will probably bring a fresh way of thinking to your team, challenge some conventional wisdom and potentially make everyone better.

Recruiting moving forward

The next time you are recruiting, particularly if it is for a somewhat senior position, look beyond the position and see how you can best help your organization. Realize you cannot train the person to be better than you. Understand the opportunity to bring new skills to your team. Hire the best, but make sure you know what best looks like for you.

Key takeaways

  1. Recruiting candidates with the expectation you will train (upskill) them to do the target job well shows an arrogance that you think you can train them better than anyone else has.
  2. Upskilling people ensures your team does not go to the next level, you set your current skillset as the ceiling.
  3. You also miss the opportunity to bring new skills and experiences to your team, where the new hire can make everyone else more valuable.

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Unknown's avatarAuthor Lloyd MelnickPosted on November 24, 2020April 24, 2021Categories General Social Games Business, General Tech BusinessTags hiring, recruiting, Up-skill1 Comment on Up-skillOR vs Up-skillEE

Look closely at track record, with the emphasis on closely

You often hear how important it is to look at a person or company’s history before hiring, investing, etc., and although it is crucial, it is also crucial to do more than look superficially. Conversely, just looking superficially can cause significant damage and lead you into a bad decision.

track

Using track record when hiring

Probably the most important factor when considering a candidate is what they have previously done in their career. While a weak candidate can shine for a day of interviews and a great candidate may not be good in an interview environment, what a person has done previously in their career is a strong indicator of what they can do for you.

The challenge is how to analyze a person’s track record. If you look on LinkedIn, 90 percent of people are all in the top 10 percent. In some cases (though I have found it rare among candidates for senior positions), people lie about their prior roles and achievements. This issue is easy to uncover; you just need to ensure you do your due diligence on background and reference checks. The one caveat is not to rely on the references that you are given, as almost anyone can find three or four people (often friends) that will say good things about them. You need to dig deeper, for key positions and achievements figure out who they reported to or worked with, then reach out directly to those people (I usually use LinkedIn) to get the real story.

The other key element of checking candidates’ track records is understanding their true roles on the major achievements they tout. Continue reading “Look closely at track record, with the emphasis on closely”

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Unknown's avatarAuthor Lloyd MelnickPosted on October 16, 2014October 21, 2014Categories General Social Games Business, General Tech BusinessTags hiring, investment, recruiting, track record, VCLeave a comment on Look closely at track record, with the emphasis on closely

How to find talented employees

Finding strong members for your team is one of the most important skills needed to succeed and a recent Harvard Business Review article, “21st Century Talent Spotting” by Claudio Fernandez-Araoz, provides some strong insights on how to optimize your talent search. With skills and competencies now the key to finding employees, rather than past experience, you must become skilled at judging potential. This situation is exacerbated by the rapidly changing nature of the tech and game spaces, what worked yesterday are not necessarily the skills you need today.
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In the last millennium, workers were selected for physical attributes which readily translated into higher success at physical labor, from building a canal to fighting a war. Business then evolved to judge candidates on intelligence, experience and past performance. Much work was standardized, so if you were looking for an engineer or an accountant or a CEO, you would find somebody who has already succeeded in such a role and there was a high likelihood they would replicate this success. Then hiring evolved to the competency model, which stipulated that managers (and other workers) be evaluated on specific characteristics and skills that would help predict outstanding performance in the roles for which they were being hired. Hiring managers would decompose jobs into competencies and look for candidates with the best combination of these skills. Continue reading “How to find talented employees”

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Unknown's avatarAuthor Lloyd MelnickPosted on August 27, 2014October 14, 2014Categories General Social Games BusinessTags Claudio Fernandez-Araoz, development, hiring, HR, Potential, recruiting, retention, stretch development, talent1 Comment on How to find talented employees

Bayes’ Theorem Part 6: Making the best hiring choices

I have written several blog posts on how Bayes’ Rule can help you make better business decisions and application of this theorem. One of the areas where Bayes’ Rule is most often neglected is in hiring decisions. Often, rational and data driven individuals and organizations abandon the rules of optimal decision-making and rely on intuition.

At its core, Bayes’ Rule shows how you can optimize the chance of a correct decision by looking at previous data points that encompass the decision you are trying to make. In the case of hiring, this analysis would be more effective by looking at the metrics and data that shows who succeeds, looking at what makes someone successful in the position you are hiring for and reducing the impact of data that does not lead to good hiring decisions.

What most companies end up doing is using data as a filter but then hiring based on intuition. If you really want to make good decisions, you need to understand your intuition is only one (weak) data point and base the decision on Bayes’ Theorem, using past data to make the optimal decision.
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What has worked for others

First, look at the position you are hiring for and identify the most successful people (at other companies or at your’s) in the field and “reverse engineer” their background. What experience(s) did they have before they were hired? What is their educational background (school, degree, extra curricular activities, etc.)? Using Bayes’ Rule, if you are hiring for a Director of Social Media and find that 90 percent of the top performing Directors of Social Media went to Texas A&M, then the chances of making a good hire from Texas Tech is already at less than 10 percent. Continue reading “Bayes’ Theorem Part 6: Making the best hiring choices”

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Unknown's avatarAuthor Lloyd MelnickPosted on May 1, 2014May 29, 2014Categories Bayes' Theorem, General Social Games BusinessTags Bayes' Rule, Bayes' Theorem, hiring, recruitingLeave a comment on Bayes’ Theorem Part 6: Making the best hiring choices

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Lloyd Melnick

This is Lloyd Melnick’s personal blog.  All views and opinions expressed on this website are mine alone and do not represent those of people, institutions or organizations that I may or may not be associated with in professional or personal capacity.

I am a serial builder of businesses (senior leadership on three exits worth over $700 million), successful in big (Disney, Stars Group/PokerStars, Zynga) and small companies (Merscom, Spooky Cool Labs) with over 20 years experience in the gaming and casino space.  Currently, I am the GM of VGW’s Chumba Casino and on the Board of Directors of Murka Games and Luckbox.

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