As the founder/CEO or leader of a scaling organisation, one of the best things you can do for your business (and your life!), is to prioritise hiring the right people into the right roles.
We all know the pain of a mis-hire. Not to mention the wasted expense in salary and recruitment costs, only to find out weeks or months into an appointment, the new leader or talent you spent months searching for, weeks pursuing and days interviewing, are not right for the role and/or the company.
So how do we minimise the number of mishires and maximise our liklihood of hiring the BEST PERSON we can afford for the role and our team?
First WHO then WHAT
According to Jim Collins, researcher and author Good to Great, the first step is understanding who the right people are.
The rationale is in today's fast-changing world, where we cannot predict with certainty what new challenges we will be facing as a business next year, little alone the next 5 or 10 years, we need to focus on identifying WHO is likely to be the BEST PERSON for the role or job not necessarily our Strategy, Plan i.e. WHAT we should be doing.
That way, if our strategy needs to change along the way, then it's highly likely hiring exceptional people (versus less exceptional people) are more likely to figure it out.
Seats on the Bus
To hire the best people we can afford, those people who are exceptional and have potential to be not only good at their jobs, but really the best in the industry - we have to understand the seats we need on the bus. By seats we mean the roles and accountabilities - starting with a leadership team.
There are many theories and much has been written about leadership roles and skills for today's and future scaling organizations.
For example, T-shaped skills is a visual metaphor introduce in 1991 by David Guest, where the vertical part of the 'T' refers to deep expertise that are needed in a specific industry or discipline. For example a technology development skills for the payments industry or deep knowledge of manufacturing processes or sales in the Food technology industry.
T-skills also refers to broad knowledge and skills that cut across industry, like general business skills, necessary for inter-disciplinary collaboration e.g. communication skills, teamwork, customer-orientation, financial literacy etc... T-shaped skills was popularised by the consulting and technology industries.
As the pace of change has increased, and change is now less a start and end point and more of a continual and dynamic process, the management of change has also shifted. This shift means we require more than 'T-shaped' skills in our leadership.
Hire Greek
"Organisations built for future growth and scale will put a premium on people who can cope with ambiguity, be creative, think strategically, and offer coaching and inspiration." (Michels, 2019)
Some have referred to this as well as those skills above as 'Phi-shaped' skills, referring to the Greek letter Π.
Phi-shaped skills include abilities to think critically and strategically, be creative, innovative, responsive and proactive - act entrepreneurially - are all capabilities that already exist inside many successful start-ups. Capabilities they want to hold on to - even as they grow their teams and their roles begin to specialise.
This "entrepreneurial orientation" is something scale-ups need to continue to place a premium on while recruiting their team, alongside deep functional expertise AND broad business and management skills, as they scale.
Functional Accountabilities Chart
During scaling, a start-up moves from hiring 'generalists' capable of wearing multiple hats and accountabilities, to hiring specialists, and these specialists are largely functional. i.e. Finance, Sales, Marketing, Production.
They may also have a combination of broad management skills in specific industries (T-shaped) such as Heads or GMs of Business units. For many scale-ups, they are also thinking about their stage. Hiring a head of sales or production for a revenue growth between $2 million to $10 million, versus $50 million to $200 million. Scale-ups seek to hire specialist leaders and talent with experience fit to the stage they are going and possibly the next.
To help young scale-ups to determine which roles to hire for and when, coaches at Scaling Up use a tool referred to as the Functional Accountability Chart exercise or FACe.
The FACe exercise is usually completed with the CEO, COO and other key leadership in the executive team. It helps leadership have a robust conversation about the accountabilities or outcomes they are seeking over the next 1-3 years in the business, and the capabilities or functional roles they will need to have in order to deliver those outcomes.
Here is a Free Download of the FACe you can discuss with your team.
Functional Accountability Chart exercise from Scaling Up by Verne Harnish.
Accountabilities vs. Responsibilities
When completing the FACe exercise with a team, it's important to first understand the distinction between "Accountabilities vs Responsibilities".
Accountability belongs to the ONE person who has the “ability to count”. Who is tracking the progress and giving voice when issues arise within a defined task, team, function, or division.
Responsibility falls to anyone with the “ability to respond” proactively to support the team. It includes all the people who touch a particular process or issue.
Accountability doesn't mean the ONE person is delivering all the actions or making all the decisions regarding the outcome, but without one person who is accountable for the progress - no-one will be accountable for the progress.
How to run a FACe session with your team
Together with your co-founder or leadership team
Step 1 - Fill out the functions you have in your organisation and think you will need in future (not the person) in column 1. It doesn't matter if today one person is fulfilling multiple functions, right down the function individually into seperate lines.
Step 2 - Go to column 4 - Results & Outcomes. Think about the goals (financial and non-financial) for the business over the next 1-3 years, which role is accountable for which goal? Refer above to the difference between accountable and responsible. There should be only 1 person accountable per outcome, impact or goal.
Step 3 - Now work backwards to Column 3. What are the leading indicators that we can track and measure on a daily, weekly, monthly basis (influencial acitivity) that helps to drive or influence the results or outcomes in column 4? We are looking for causation here not correlation. For example, lower Customer Churn might be an outcome we are looking for, but if we only find out a customer is likely to churn when they churn, there's little we can do about it. Measuring customer satisfaction, happiness, etc... on an ongoing basis or after every interaction helps us to predict likelihood churn will improve or worsen.
What other routines and activity leads to the outcomes and growth goals we are seeking?
FACe Red Flags
Step 4 - Now put the names of your current team (exec and/or managers) next to each role on each line. Some may appear in multiple lines and roles. Some roles may appear blank. Some outcomes or goals have two people responsible for the same goal. All of these are potential orange flags and good discussion points for the team to have. It helps the team make decisions between accountabilities and responsibilities, leading and lagging indicators or KPIs and which roles, if funds allow, are the next that should be hired from all the roles that could be hired.
Next Up in Part 2 - Job Scorecards
The next step is to translate the FACe to revised Job scorecards for each role, which we will cover in our next blog post!
