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Episode 142: “Performance-based Hiring”

with Lou Adler

Episode 142: “Performance-Based Hiring” with Lou Adler

Lou Adler is “The Sherlock Holmes of Recruitment”, CEO, and founder of The Adler Group, a consulting and training firm which uses his performance-based hiring℠ system for finding and hiring exceptional talent.

In today’s episode, guest-host Susanne Kerins discussed the topic of “Performance-Based Hiring” with Lou Adler. Lou is the CEO and founder of The Adler Group, a consulting and training firm that uses his performance-based hiring℠ system for finding and hiring exceptional talent and a published author. His articles and research have also been featured in Inc. Magazine, Business Insider, Bloomberg, SHRM, and The Wall Street Journal. Lou is the author of ‘The Essential Guide for Hiring & Getting Hired’ and the Amazon top-10 best-seller, ‘Hire With Your Head – Performance-Based Hiring to Build Outstanding Diverse Teams’.

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Highlights from Episode 142: “Performance-Based Hiring” with Lou Adler

So, tell us a little bit about you. Tell us about your background and I suppose why you became known as the Sherlock Holmes of recruitment.

Well, that’s a pretty big question, so we don’t have that long a podcast, but I know that the first question in an interview is usually “Tell me about yourself.” It’s interesting that that’s kind of a common question that interviewers ask candidates. I need to contend it is a stupid question. Not yours is a stupid question. But so the context and I’ll change it, we might want to give some interviewing advice here.

Rather than ask “Tell me about yourself” to a candidate why don’t you do something like this if you’re a hiring manager: “Describe a challenge you have in the job. Hey, we have a project that’s going downhill and we’re about three months behind. Can you tell me about something you’ve accomplished related to that?” So, the idea of “Tell me about yourself” is so open-ended that the answer doesn’t mean anything. Some candidates are going to practice. Some candidates aren’t going to know anything. Some are going to sound good because they can give you some glib response. But the idea if you narrow the focus to something realistic, it becomes a meaningful question. So now, I’ll answer your questions and I’m sorry: This could be a one-question podcast.

My background is very weird. I started out in engineering and manufacturing and got into financial planning and budgeting and cost controls. I was running a company when I was a very young man, I’m very old now. I just hated the group president. I decided I’m going to become a recruiter. It was only because I started using recruiters and they were only working 40 hours a week and I was working 80 hours a week.

But when I got into recruiting, I realized that too many people get into it or they don’t really look at it as a business process. And when I started doing it, I realized that hiring can be a business process. You don’t need a lot of candidates if you do everything right, if you interview properly, if you close properly. So, it became a business process for hiring and only because my background had been that in business systems, manufacturing systems, and data systems. So, that’s the long, very long story with my introduction into training and how I got into this whole field. So, let me just leave it at that, so we can go from there.

What are the typical downfalls that the interviewers end up making?

Well, the big one, and it’s consistent, is you don’t know the job. I mean, it’s clear that from every piece of research, from Google to serious studies around the world, employers don’t clarify expectations, even when you’re managing a person, the person is going to do stuff that could be off-kilter. I mean, it’s just common sense. “Hey, Susanne, you’ve got to put together 10 podcasts in the next three weeks with people who understand worldwide hiring.” Well, that’s a pretty clear expectation.

But on the other hand, because I hit “Put some podcast together, Susanne.” You’re not going to know what´s good or bad. So, the idea of clarifying expectations after the person’s hired is absolutely critical and people say “Of course, I have to do that” but then the idea is “Well, why don’t you do that before you hire someone?” So, I’m going to go back to my first search assignment, this is like 40 years ago, but it’s a good story. I took my first search project, it was a plant manager for a company making automotive components. I knew the president of the company, so I became a recruiter, and Mike, who’s the president, gave me a job description.

This is a long time ago. We didn’t have the internet. They had job descriptions and it listed – 10 to 15 years of experience, has to have an engineering degree, has to work for these kinds of companies, has to have this many years, has to sound like this, all the same stuff that people put on today. I looked at that job description and said “Mike, that’s not a job description. That’s a ‘person description’. A job doesn’t have skills experience, competencies, and academic background. That’s what the person does. Let’s put this “person description” in the parking lot. Tell me what you want the person to do.” “I want someone to turn around the plant.”

So, we walk through the manufacturing plant for an hour and we found seven things a person needed to do to turn the plant around in a year. So, the biggest problem that people have with hiring is that they don’t understand what the job is. They just assume the person will know that. They assume that the recruiter will know. So they changed “Tell me about yourself” into “tell me about yourself in relation to turning the plant around. Tell me about yourself and how you would launch a new product.” But, if you spend the time upfront, understanding the job, you hire people who are competent and motivated to do that job. So, that’s the biggest pitfall. You need to find a series of performance objectives. You have a chance to accurately assess competency. If you don’t do that, it’s problematic. You just might get someone, might not.

What are the most relevant interview questions?

In the book, I said it’s the most important question of all time and basically and it happened when I was at some presentation or some meeting with a bunch of executives and someone asked me and it was one-on-one. It wasn’t in front of the whole group. He said “If I was just going to spend 15 minutes with someone and ask one question. What would that question be?” I said “That’s interesting. Why don’t you just ask the person to tell you about the best thing he or she ever did in her whole career? The biggest thing you’ve ever accomplished. And then compare that to what you need to be done.”

Now asking the question is, “Hey, Susanne, tell me the biggest thing you’ve ever done.” Now, most candidates will talk for one minute or so. Engineers will talk for 30 seconds. If you’re a marketing person or an extrovert, you’ll talk forever and you think you get the right answer, but you have to tailor their response. “When did you do it? Why did you get assigned to the project? What were the problems you faced? How did you make decisions? How did you overcome problems? How did your work with the team? How did you put the plan together? What was the environment like?”

So, there’s a lot of peeling the onion to that. So, now I go back to this plant manager spot. I said “We have a plant that’s got about 300 people in it. They’re doing this. Tell me about the biggest thing you’ve ever accomplished turning the plant around.” “I’m working with a retail company in the United States and they’re looking for a director of stores.” So I said, “Okay, walk me through.” I don’t know a lot about retail, but I do know that they need to change their whole stores because they’re adding new product lines. And there’s also got post Covid or pre Covid and all this. And you have to retrain and they said, “Hey, we got to completely overhaul the store with the new products, new training, new materials, and new merchandising. Walk me through something you’ve ever accomplished that’s related to that.”

I spent 10 or 15 minutes off with the guy who had done it, and how he could do it. I mean, it was just the idea of that: once you know the job then you ask the candidate to explain accomplishments related to that job. I mean, I know that sounds simple and contextually or intuitively it is simple. It’s hard to get people to talk that way and it’s most hard though to get the hiring manager to find the work that way.

Somehow, even though that’s logical, the finding the work. “I have 10 years of experience. I need this. I need that.” Well, that’s not going to cut it in today’s world. That’s why a Fortune magazine article two weeks ago that said “Two-thirds of people getting hired want to leave in 90 days because the job is not what they thought it was.” It’s all the same issue. If you don’t tell people what they’re going to be doing and hiring them for that, it’s problematic, if they’ll be successful and satisfied.

So, how do you avoid hiring the wrong person based on a gut feeling or emotional bias?

Well, that’s a hard one, it is critical because that’s probably the most common or among two causes of common errors. Number one is trusting your gut feeling. And number two, not knowing the job. You put both of those together it’s just pure random luck. It’s like being in Vegas. Controlling emotions is a hard thing to do. So, let me give another story which I think kind of summarizes that whole idea.

This is long ago, but I had a person for a cost accounting manager position and I knew that they were looking for this candidate. I wanted the client and it was long ago. The VP controller loved my candidate, the director of financial planning loved my candidate, director of internal audit loved my candidate. They are all accounting leaders and even the VP of manufacturing and the head of IT loved my candidate. So, this was a very good candidate but he was quiet and soft-spoken.

The CFO, the Chief Financial Officer of the company was very direct, in your face, dominant alpha male. I mean over the top. I mean, it’s just you’d cower in his presence. Well, he and I went to battle a few times but that’s neither here, nor there. He met my candidate for 10 or 15 minutes. And basically, screamed at me for sending in a candidate who’s clearly incompetent. This is after when I have interviewed him and loved him, and after a while, after taking this abuse for three or four minutes of him yelling, telling me how incompetent I was. I said, “Are you aware of what you want this person to accomplish?” And he said, “Yeah, I want a good cost manager.” I said, “No, that’s not what your team told me. They told me they want this person to implement this new state-of-the-art system at four manufacturing plants. Three in the United States, one in Puerto Rico, and one you’re building in Southeast Asia.”

He said “Yeah, okay. That’s right.” I said, “Did you ask the candidate if he did anything like that?” “No, he’s just too soft to do that.” And I said, “No, you’re wrong. He actually did that with a big automotive company.” I went through all the details of where he had done that, why he was chosen for the job, what happened in terms of recognition; a lot of evidence. And it turns out, the only reason the candidate was even available is because his wife was getting her MD degree at a local University, to get her master’s degree or MD degree and doing a residency down here and is here for three years.

I said “You just lost the best possible candidate and his personality is the reason he was successful with the unions, with manufacturing people, with the cost people, with the system’s people, and was recognized by the same exact company you want to implement the system here as an expert in this field. And you just walked away from him.” So, now the short answer was he was blown away by the evidence. So, the evidence can overcome emotions and facts. The CFO and I, I can’t say we became good friends, but he respected my approach to collecting evidence. He gave us half a dozen of the search assignments over the next year. He went to another major company and gave us another half a dozen of the search assignments. He just loved the methodology of evidence.

It’s in my first book. The title was “Hire With Your Head”, which was my first real book. The subtitle was, I think it was called “Hire With Your Head – A Rational Way to Make a Gut Decision”. Great title. I didn’t come up with that, the editor came up with it so but it was a great title. The reality is you can’t, there’s always a gut component to it. But if you know the job, you collect evidence, you really control your biases, which is essential as you are interviewing candidates. You have a good chance of making the right decision. But if you don’t know the job and you’re letting emotions get into it because you like someone, you ask easy questions. If you don’t like someone, ask hard questions and it’s pure random luck. I’m going to contend that’s the reason we still have these exact same problems today, for those exact reasons.

So, I know, for example, with our company, one of the key elements, when we’re hiring people, is culture fit. So, how does that fit into performance-based hiring?

Well, let me kind of give you the formula for hiring success, and then you’ll see it. The formula for hiring success is the ability to do the work in relationship to fit. Fit is so important, it drives motivation and motivation is so critical for the results. So it’s the ability in relationship to fit drives motivation, which is squared equals results. The fit is that component. The ability to do the work as hard and soft skills, team skills, project management skills, and organizational skills. Those are not simple to measure but they’re relatively straightforward. The fit factors are absolutely the most important factors. To get the fit factors wrong which includes fit with the company’s culture, fit with the hiring manager, and fit with the job.

So, Susanne, you might be a delightful person. But if you don’t want to do the work, you’re going to underperform. You might actually fit with a company’s values and overriding themes of the company, but if you don’t like your hiring manager, that’s the person who drives 50 to 70% of your cultures, it’s who you work for. So, the idea is the fit factors, fit with the culture, and I look at that as the pace of the organization, the intensity of the organization, and resources. That’s a good proxy for culture. If you don’t have enough people to work and a company is struggling or growing fast. That’s a pretty intense culture. No matter what anybody puts on top of it. It’s an intense culture. Then add the hiring managers, relationship with a subordinate, another critical component, and then the actual motivation to do the work.

You could be perfectly competent to be a senior-level accountant, but if you don’t want to do it anymore, you’re going to be incompetent. So, I mean, it’s those fit factors of where the variables all come into play in terms of focusing on ability. That’s why when you look at it and “Hey, I’m interviewing you, but I like you, you seem smart. You get the right academic. You could do the job.” Well, there are so many variables going on that we just ignore. So, that’s why the idea of a rational way to make a gut decision is doing it. You never get it all, but you get a lot of it if you understand the job and conduct a thorough in-depth performance-based interview.

Show Notes

Learn more about the Lou Adler Group at louadlergroup.com

Connect with Lou on LinkedIn here

Follow Lou on Twitter here here

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