The School of Herring introduces Boatside Chats. In the first one Marten discusses hiring with Zack Urlocker, one of the team members that built MySQL into a billion dollar company with him. Zack went on to make ZenDesk ready for IPO, and he is now COO of Duo Software. Zack also advises startup companies.

Here is how you hire when building a world class company

1. SKILL DIVERSITY. When you add people to the team, make sure they have complementary skills and viewpoints, creating a diverse set of inputs. Monoculture is a risk and leads to less innovation.
2. PROVEN SUCCESS. For senior positions look for people, who have a track record for success. Those who have shown that they get the job done repeatedly, over an extended period of time. In young people look for those that have displayed initiative, solved problems and taken action without having to be told exactly what to do.
3. PRACTICALITY. During the interview, ask practical questions on issues that you are working on and for advice on how to solve them. See what practical tips and guidance you get.
4. PERSISTENCE. Ask a lot of questions and if something isn’t clear, keep asking. This is less annoying than hiring the wrong person.
5. TAKE TIME. Do not fear a lengthy recruiting process. Think of it as an extended dating period, during which 4-6 different people from the organization interview the candidate.
6. COMPARE. Make sure that you are asking similar questions of all the candidates, so that notes can be compared between them.
7. CONCENTRATE. Try a 45 minute long one-on-one interview. In a group setting the risk is that you end up talking to the other people from your organization instead of the job candidate.
8. ATTITUDE. Hire attitude. Think of it like a relationship with a spouse or somebody that you live with. There maybe many redeeming qualities, but if you find that there’s a fundamental difference in values, it will not a good fit.
9. QUIRKS. Do not lower the bar for any skillset or exclusive talent. If you find somebody who’s brilliant, but they have a personality quirk that is not compatible with your values, do not hire.
10. REFERENCES. Check all references and in addition contact 1-3 backdoor references – people the person has worked with. Do not delegate this to anyone else. The hiring manager should do it personally. Ask very clear questions like “For this position, do you think they have the right experience to do the job? Would you hire that person again?” If you hear anything less than glowing praise, that means thumbs down.

VIDEO TRANSCRIPT

Marten: I’m here today with Zack Urlocker, world-class executive who’s passionate about disruptive business models. But Zack is also a master at building teams and building teams that execute very, very well. We are here today to talk about hiring and building teams.

Zack: Great. One of the things that I think is really important to consider is as you build an organization, it’s not just an org chart that you draw on paper. It’s a living, breathing organization and you’re building a foundation for your business, brick by brick. And so what you want to do is find people who add complementary skills and viewpoints to the organization. You want to look to create a diverse set of inputs in the management team especially. That could be people from different experiences, different companies, different cultures, different skill sets and different personalities.

For example, some people who might be more introverted, some people might be more externally focused, and you, you should think about every position that you add, saying how does that balance into the organization that you already have. So if you have a lot of engineering talent, then you may want to focus and say, “Okay, the next person I bring in, they have to give me a balance of business skills or salesmanship.” Or if you have a lot of people from, one particular culture, “Okay, how do I add a different viewpoint or different experiences?”

Marten: How do you make sure that you have cohesion, because bad companies are known for not having a cohesive culture or plan and they don’t seem to represent the same business idea even.

Zack: I think it’s interesting thing. There’s a difference between the diversity of the organization and the cohesion of the plan. And actually, if you have a diverse organization, you will
[00:02:00] be able to create a much bigger strength in the industry. But you as a leader, you still have to create a plan that everyone agrees to and a strategy.

That’s more about leadership than it is about the bricks that form the organization. You have to be careful that you don’t assume, just because you hired people, for example from a given background, that they all understand implicitly what the organization’s mission is and what the strategy is.

Marten: So you should look for outliers who are extreme in some way?

Zack: Diverging viewpoints, yeah, it could be extreme. Somebody who is really a creative thinker who can call into question a strategy, but then once you get agreement, then you all have to move in the same direction.

But you don’t want to have everyone who says well, they’re all yes men or they all just implicitly think the same way. And this happens sometimes with startups, where they end up hiring maybe 5 or 6 people from Google, let’s say, and then in every discussion, it’s, “Well at Google, we did it this way.”, and you need to have different viewpoints. Otherwise, you create a, monoculture and you’re less likely to get innovation in that case.

Marten: Okay, so how do you then identify them? How do you know who is a good job candidate when you interview?

Zack: For senior positions, I like to look for people who have a track record for success, and that is whatever it is they’ve been asked to do, have they been successful in that position? Did they get the job done and did they do this repeatedly for an extended period of time? And that’s measured over many years. Of course, when you’re hiring people earlier in their career, they might not have that.

Marten: Well don’t you look sometimes for young talent and then they can’t have experience? How do you know that they will execute well if they haven’t done it?

Zack: They may not have a track record of success that is really long but you can still look for people who have had a thirst to try new things, where they have tackled problems
[00:04:00] themselves, whether it was in university or in the summer jobs, and particularly, I look for people who have displayed initiative and solved problems where they identified the problems themselves and then took action without having to be told here’s exactly what you need to do.

Because especially in a startup, you need people who will just see opportunities and address them or listen to the customers and say, “We went and we did this because it seemed like a good idea.” And they were passionate about it.

Marten: How about then if you are a young startup CEO and you are 25, how can you identify and recruit people with experience when you don’t have experience?

Zack: I think, when you’re interviewing people, there’s a certain amount that you want to talk about their background, but then you should just unload all the problems that you have in your day job and ask them about how they would solve this problem.

Marten: You mean the concrete problems that you’re working on?

Zack: Absolutely, the things that are on your desk that you’re trying to solve, so if you’re interviewing somebody a recruiter from an HR background. Then lay out, say, “Well if in theory, we were looking for a head of engineering because our schedule had slipped 6 months, how should we approach this?” See what practical tips and guidance that you get from them. Because even then, if they’re not the best candidate or you don’t recruit them, at least then you get some good ideas that you can implement.

And if they don’t have good ideas in that interview, they probably won’t have good ideas when they’re actually doing the job.

Marten: Okay. So how do you assess the responses? In you’re interviewing, who seems like a great candidate, how do you know that it’s true and it’s relevant and it’s actually. How do you know how to assess based on answers, because they’re trying to look great in the interview.

Zack: I think you should ask a lot of questions and if something isn’t clear, just keep asking questions. And if they, particularly with candidates, if they stay at a superficial level, or if they say, “Well I really don’t know your business so it’s hard for me to answer.” Just keep asking. And you know, if you have to ask the same question three times, to get an answer. Then that’s what you need to do.

Marten: Isn’t that annoying for the other, the candidate?

Zack: It could be but it’s less annoying than hiring the wrong person. If it turns out that you can’t get a substantive answer, that you believe is at least a legitimate viewpoint. They’re probably not the right person to hire. And if you don’t understand what they’re saying, and you don’t have a basis for seeing this does make sense, then you should also probably not hire them.

Marten: So on average when you interview people for a key role, how many interviews do you do and how many total minutes of interview or hours would it typically take?

Zack: Probably the best positions where I ended up joining, we had a very lengthy interview process. Weeks, maybe months.

You need to get comfortable with it and it’s, it can be an extended dating period of meeting that person, in multiple different situations and asking questions. I think it’s good to have, depending on the role, between 4 and 6 different people from the organization interview the candidate, assess from different viewpoints and make sure that they’re asking similar questions of all the candidates, so that they can actually compare notes between them. And that you should ask the hard questions in that. You know, I, for me personally, I find 45 minutes is, is pretty good and the right time for an individual.

You want to get to know them in a different context, but the one thing I advise is you should do one on one interviews. This maybe just a personal bias.

Marten: So not in a group but just one on one?

Zack: For me, I prefer one on one because I think sometimes in group setting, you end up more talking to the other people from the organization and you don’t have as natural a dynamic. It may be nice to have lunch with the candidates to see if they fit culturally. But I’d much rather just do the thorough interview and see if it makes sense.

Marten: How do you deal with the situation where you interview somebody and you realize, brilliant skill and can do exactly what you asked for, but comes with some sort of attitude that might be a problem, culturally or in the team?

Zack: I think, for most companies, especially startups, attitude is everything. If you feel that somebody has, maybe too much pride or arrogance in their viewpoint, no matter what skills they bring to the table, I would not hire them. It’s much like a relationship with a spouse or somebody that you live with that there maybe many redeeming qualities, but if you find that there’s a fundamental difference in values, it’s not a good fit.

Personally, I feel like there’s no amount of skillset or exclusive talent that would cause me to lower the bar in terms of compatibility of those fundamental talents. If there’s an integrity issue, a person who is a little bit of a primadonna, I think it creates a very dysfunctional culture. Then you spend all your time thinking about when do I move that person? It’s better to be super cautious on the hiring and, and continue to look. If you find somebody who’s brilliant, but they have these personality quirks that you’re not going to be able to get along with them or you wouldn’t want to spend time with them on a personal level, don’t hire them.

Marten: What do you do if you have four or five of your colleagues interview the candidate, they come to you with a negative assessment, but you are personally certain that it’s a good hire. Would you still hire a person in face of negative comments from your colleagues?

Zack: Well, it depends on the nature of those comments. I don’t think you have to have a consensus. I think to me, the hiring manager gets to make the decision. So you may, for example, if you’re hiring somebody in the sales organization, ultimately it would be VP of Sales who makes that decision, even though they might interview with people from the Product team or others, other areas.

You should certainly listen to the input and consider. If maybe they uncovered something that you didn’t ask about and that you may need to reconsider your own opinion. If it’s somebody that you have worked with personally and you know them maybe better than the other people, then you might override, choose to override that.

But I think this is also where it becomes very important to check references. And I’ve seen many people get hired where afterwards, they realized maybe this wasn’t a fit. Then they look back on LinkedIn. They see all these shorts: 1 year here, 9 months here, 15 months here and you see, okay there is a pattern with this person.

Marten: But aren’t all references always positive? You call somebody and they’ll always give a positive comment. So how do you really make good use of reference calls?

Zack: Yeah, whatever references the candidate gives you, those are going to be very positive. I have to look for what I call the backdoor references, which is can you find somebody that they worked with, who is not their best friend, who will be more objective? Then you have to ask very clear questions and say, “For this position, do you think they have the right experience to do the job? Would you hire that person again?” If you hear anything less than glowing praise, if they say, “Well, for the right position, I would certainly consider it.” That means thumbs down.

So you really want to make sure you’re careful on this front and, and look for patterns and ask people. You know, if somebody has a long career, there maybe a position where it didn’t work out on one occasion. But if they have a reason for every single job why it didn’t work out, then it’s not you, it’s them. Then you just walk away and you’re better not to bring in that to the organization.

Marten: So how many reference checks would you do for a hire?

Zack: I try to do 2 or 3, and you should not defer, delegate that to somebody else. Don’t delegate that to the recruiter or to HR (Human Resources). If you’re the hiring manager, you should do it personally.

Marten: Okay. Wonderful, thank you, Zack. Having an ability to recruit the right people and build a great team is a unique competitive advantage in this world and for your business. You need to get good at it!