Accept that you will likely have a tough period
Don’t cut corners in the hiring process due to the increased pressure
Always be open and honest about the challenges candidates will face
Leverage your Board in the hiring process
Keep incentives simple, stupid!
- Look for Rhino’s - not literally though
Involve the Board in the hiring process
Often, when up against it, the temptation is to slim down hiring processes and optimise for speed. This temptation to rush hiring is often viewed as a sign of panic by candidates, particularly the top candidates who are looking for signs of resilience, rigour, proper process and alignment across all levels of the business.
We have mentioned this before, try to involve the Board at the earliest (within reason) opportunity in the hiring process. This allows the candidate to see how aligned the Board are with the leadership team and give you, the hiring manager, an extra level of scrutiny on the candidate as well as get crucial Board level buy-in to the hiring process. It also kick starts a multilateral relationship building process that ultimately, will be the key driver of success. In addition, it can help build Board agreement with hiring decisions which is important when times are tough and you might need to go back for further funding.
Clean up the Cap Table
Candidates are unlikely to be motivated by the potential for upside if it is unclear and obfuscated by an illegible cap table. Again this is particularly problematic for companies that have been through multiple rounds of funding.
Candidates will want to know that there is a clear path to success. Moreover, the motivation that equity/options gave your early employees is needed now more than ever. Set yourself up for success by cleaning up your cap table, aligning everyone on the upside opportunity, and simplifying that multi-tab Excel spreadsheet as much as possible.
The best candidates will know that the business faces significant challenges, and hopefully, they will be excited about the opportunity to turn it around. The worst thing you can do is to sugar coat challenges and try to ‘spin’ a role. If the hire is likely to come into the business after a round of redundancies then let them know that. If the candidate is coming into an area traditionally characterised by significant role creep from others in the business then let them know that.
Having a candidate come in with their eyes wide open reduces onboarding overhead, helps them tackle the big challenges head on and ultimately reduces the chance that you will be hiring for the same role in the near future. It is also worth noting, it is the right thing to do.
Screen for candidates toughened by failure
Hiring and retaining the A-Player has long been the holy grail for a startup talent function. Whilst useful as a rule of thumb, without properly understanding the thinking behind ‘hiring A-Players’ all too often hiring managers look to previous career success as a proxy for quality of a candidate. Even worse is using brands as a proxy for career success (i.e. worked at Google for 3 years as a sales manager in the mid 00’s = great at sales). It’s not all that surprising that this is a default hiring method, evidence of previous success is easy to defend when asked: “why did you hire this person?”.
However, carefully managed careers and conventionally successful people can also mean conservative decision making and carefully planned careers. As Ben Horowitz consistently referred to in The Hard Thing About Hard Things it was his team that dug in deep, remained loyal and delivered when the chips were down that allowed the business to keep moving forward. A stereotypical A-player looking for their stepping stone to the next big thing is potentially a poor fit for the hard and underappreciated work of turning around a business after a period of underperformance.
Look for people who’ve failed at doing something bold, because being bold is probably what you will need in a turnaround situation. This doesn't mean history of failure is a foolproof method for finding great talent but it does force you to judge a candidate on their individual merits rather than on the wave of their previous companies’ success.