Mikey Trafton: Recruiting a Bad Ass Team

Mikey delivered a brilliant talk at the 2012 Business of Software Conference at Business of Software Conference that offered a three part framework to understand the importance of culture in an organisation, what happens when culture goes wrong and how to ensure organisational culture is embedded within your company.

Mikey is picking up on that talk about building a world class culture to share some of his tips and tricks on building a world-class team that is a rock solid culture fit and incredibly productive. Mikey explains:

• How to determine what capabilities you need for a given position
• How to attract the best talent
• How to ignore useless resumes and screen candidates using other (better) techniques instead
• How to interview (including my favorite interview questions)
• How to make an offer of employment that will know the candidate’s socks off
• How to differentiate your offer from all the others that top candidates receive
• How to make the candidate feel loved so that they will accept your job offer instead of someone else’s
• How to keep the candidate from accepting a counter offer from their current employer

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Transcript

Mikey Trafton: Alright. So, I’m super excited to be here again this year. You know, like Mark said, “I’m not famous. I didn’t write any books. I didn’t sell my company for 100 million dollars. I don’t teach at some big business school.” I’m just an entrepreneur down in Austin, Texas you know, like a folks in this room. And I own software and consulting Firm where mostly the services company, we build customer software for the Fortune 500 that’s all we do.

And last year when I spoke, I told the story about how I fired myself from my own company and I still own the company but I have turned it over to my team and my team runs it for me. So, all I have to do is you know, sit back cash the checks which is freaking awesome by the way. And my team is been doing the pretty good job. Last year they doubled revenue, they more than double profits and this year so far they have already exceeded what they did last year. So, when I tell that story people always come up to me and they’re like, “Mikey, how did you do this?” And I say, “I mean I don’t know. I didn’t do it, my team did it.” And they say, “Okay, but how did your team do it?” And I say, “Well, I don’t know because they’re freaking amazing that’s how they did it.” And they say, “But how did you get this team?” Well, I don’t know I just hired them. And they say, “Okay, but why did you hire them?” And I say, “Oh, that I know all about, yeah I can’t tell you about that.” So, that’s what I’m gonna do today. I’m gonna tell you how we hire people at my company which is called, ‘Blue Fish’ and my goal for this presentation is for you take away some very practical tools. I want you to take these things, I want you to take it home, you them in your company that’s what I’m hoping for.

A quick show hands though, who’re here from Austin, Texas my hometown? Okay, you people from Austin, you are not allowed to use any of this stuff, okay, it’s still competitive already, I wanna see you playing Angry Birds, don’t listen to me. Everybody else let’s learn ‘How to Hire a Great Team’. This to me by the way…So, you know, when I was putting this presentation together I was cognizant of the fact that we were gonna have some 10 year olds in the audience and I was worried about you know, my normal when my little seven year old says, “Daddy, you have a paddy mouth when you get excited.” So, I’m gonna try hard not to use any bad language. But there’s just one term that I just kind of feel like it captures when I’m talking about so well you know, I’m from the small town in Texas, Alvin, Texas and we have more cows than people in Alvin. And in Alvin, when something is more awesome than awesome or when it’s more amazing than merely amazing we call it ‘Bad-Ass’. As in dude, “Your new pickup truck is Bad-Ass, I like that.” So, that’s what I’m talking about is ‘How to hire a Bad-Ass Team?’ There’s someone just you know, the best you can imagine. And the work that I have done, I have kind of learned three things about hiring a Bad-Ass Team and the first is the bad asses love other bad asses. The best way to build a team of Bad-Asses is to start with a smaller team of Bad-Asses because then the other Bad-Asses just drawn naturally. So, the example I use for this is the Navy, the United States Navy, right. So, just 300,000 sailors in the Navy and I’m sure they’re all very good at their jobs but then there’s this tiny little club, little elite team in the Navy which is the Navy Seals, right. These guys are Bad-Ass and they’ll, people in the Navy compete really hard, they put themselves through training and they go through boot camps in order to join the super elite team just to be part of the super most elite team that’s what they want and the same thing can happen. So, what I’m gonna talk about today is how do you attract great talent into your company that’s one of the things I’m gonna talk about.

Another thing I’m gonna that I have learned is that you have to test your candidates. You know, if you wanna hire a Bad-Ass you have to evaluate them to figure out if they’re Bad-Ass. So, I’m gonna talk a lot about how do we evaluate and access the candidates that we’re trying to hire. And then finally, I have learned that recruiting is a lot like sales and in your sales process you’re taking the whole universe of people who could potentially be your customers and you’re attracting them to your product, your service and you’re differentiating yourself from other, your competitors, and then you’re closing the deal and in recruiting it’s the exact same thing, you have this whole universe of people who could potentially work for you, you have to attract them to your company, you have to differentiate yourself from all the other companies they could go work at and then you have to close them. So, I’m gonna talk about how you can use some of the tools and techniques you use in your sales process to actually use in your recruiting process.

So, the first thing we have to do if we are gonna hire some peoples we have to figure out what is it that we need in the role they were looking to hire. So, if we are gonna hire Bad-Asses, right then they beg the questions of what makes a Bad-Ass? So, off course there’s technical and functional excellence you know, sort of nuts & bolts of the job but what really makes a Bad-Ass in my opinion is what I call the ‘Superpowers’ this is the X-factor, these are the soft skills or you know, the non-technical skills. For your sales person, their superpowers might be the ability to walk in a room and build report with anybody in the room. For your developer, they might be really great at solving abstract conceptual problems. For your designers, their superpower might be the ability to envision new ways to present information.

So, let me give you an example. Let’s say we’re hiring a bookkeeper for the company. So, there’s some table stakes that the bookkeeper needs. So, off course the bookkeeper needs to know how to do invoicing and the difference between accounts receivable and accounts payable, and how do your accounting software? And that’s kind of table stakes that you are not gonna bookkeeper that doesn’t know that. But what you really need, what really matters in the bookkeeper is the superpowers, right. So, this bookkeeper is gonna have access to all your financial data. Do you trust them is they off the chart trustworthiness? Well, the bookkeeper treats your money like their money and will they be frugal with it? Can the bookkeeper be persisting when they’re collecting money from your customers without being so pushy that they aliening your customers? Does she know how to keep a secret, right? She’s gonna have access to all of your financial information, can she keep her yap-shut, right? So, this is the superpowers, this is what you need and it’s actually really hard to figure out what are the superpowers you need for give it a role? Most of us can figure out the technical skills that are needed but we are not sure about what the software skills are? So, there’s a tool for this that we use, its super awesome, it’s called the ‘Lominger Leadership Architect Cards’ literally this is a deck of cards. These guys have invented are come up with 67 different, they call them ‘Leadership Competencies’ that there’re things like the ability to manage direct reports or intellectual horse power or you know, dealing with conflict. They’ve come up with 67 of these and this is what they look like. So, on one side of the card they list this competency and this case planning and they have a description of what it means to be skilled in that competency. Turn the card over they tell you what is it mean to be unskilled in this competency and what is it mean to overuse this skill.

So, what we do is we take this deck of cards, we lay them out on the table and we sort them into piles. So, which competencies are absolutely essential for this position? Which ones are nice to have? Which ones are not needed etcetera? And that’s how we come up with the superpowers that we need for a given role. Super highly recommend this less than 100 bucks, order them on internet, this is a super awesome resource for figuring and how do you get started in the role that you’re looking for?

So, after you know what you’re hiring we need to attract candidates into the company which means we need to fill our funnel full of candidates which is a lot like lead generation in fact you know, this is the lead generation for your recruiting process. And we can use a lot of the same marketing techniques that we use to market our products to our potential customers to market our company to our potential employees.

So, probably the easiest way to attract people to your company is to become famous, right. So, this is if you…The Google puts the ad job posting out, if Microsoft or Facebook or Apple, or if any of these companies post an ad a lot of people apply for that because they’ve heard of these companies and since what is like to work at that company? What are the opportunities are?

Well, you’re probably not gonna be able to be you know, Ben Affleck famous but you might be able to be Casey Affleck famous, right like his little brother. [Laughter] So, Ben in a couple of movies and so what I mean here is that in your little universe, maybe it’s your geography, maybe it’s your town, you can be famous as an employer. Maybe it’s a technology that you work on, if you’re a rail shop maybe you can become famous rails community. But you can do this as this is not that hard if you know the near the scope of your domain. So, how do you do this? Well, you do it at the same way that you become famous for your products. Your blog about it, your host meet up you know, the local press to talk about you contribute to some open source projects, the same things that you’d do for marketing your product but these are actually easier because this stuff you care about like writing some open source framework you already doing that and you like that, you’re writing some article about your industry you actually hate, right. So, this is easier stuff to do.

So, by the way it’s a quicker side I had to pick a picture for Ben Affleck for that slide. So, I googled Ben Affleck’s picture and I came up with a whole bunch of magazine covers, he does not know how to tie a tie. Have you noticed this? [Laughter] Okay. So, another great way to fill your funnel with candidates is your customers. So, particularly if you’re in a B2C marketplace or B2C business your customers are a great place for employees because they already know your company, they already using your product, they’re already familiar with it but you might higher a great support, customer support wrap by just putting a little ad on the bottom of his normal customer newsletter that he sends out, he got to ton of interest from his customers and he hired one, she was already an evangelist for the product because she loved it and used it. So, that’s a great way to fill your funnel. And off course there’s the advertising of the recruiting world which is job postings.

I’ve got some tips for how to make effective job postings.

The first one is ‘No generic job postings’.

I mean I look on the internet, I see people advertising their jobs and they say, “Job that developers want it.” Well, you wouldn’t say educational software available, right. You’d position your product towards the problems and the pains of your customers and the features and benefits that you have that solve those pains and you can do the same thing with your job postings. What’s interesting about your company is from an employee prospective is that you have flexible work hours then you should have that in your job posting, maybe it says you know, “Do you wanna work from home? Work in your underwear or whatever?” If you have a <12:35> in the office there should be a picture of the cagey on the job posting, right. You need to attract the people to your offer.

Also the title of your job posting is what’s absolutely most important in your whole job posting in the same way that the email subject line is the most important in your marketing emails the title is the most important. So, here’s a screenshot and just a little search for developers and you can see the titles here or software developer programmers for scientific software, UI Software engineer, and there’s just one in the middle that says, “Android innovation like you’ve never tried before.” And I don’t know if this is a good company to work at or not but if were an Android developer I’d definitely click on this to see what they thought was so innovative about what they were doing because it just stands out a little bit. So, put some energy into your titles. And then finally, when someone clicks some of your job postings they have to go somewhere and when you advertise your product you take them to a landing page would do the same thing for your job, take them to a landing page where you tell them more about the job and about the company. So, here’s our friend Jason Cohen, his company WP Engine down in Austin, this is their careers page and it just it’s a landing page for job. S, it’s gotta called to action, apply now, it’s got testimonials from existing employees you know, who say how great the company is, it’s got a freaking product overview video for the company, this is a video about the culture of the company, it’s a product overview, it’s got benefits for cry not loud you know, features and benefits of working at this company, this is a great idea, you should steal this absolutely.

So, there’s another thing you can do off course which is you can get some help. So, you can hire recruiters to help fill the funnel to help you hire the candidates that you need for your company. And I’ve got some concern about recruiters. So, here’s the deal I’m sure I’m gonna find some recruiters here but you know, you’d expect when that there’d be a normal bell curve distribution of recruiters that there’d be a few of <14:55> and few that have not really good, and most of them are kind of average in the middle. But the actual true distribution of recruiters is looks like this, there’re almost none of them that are any good. But if you do hire recruiter and we do use recruiters, if you do a higher one I do have some tips for how to make them more effective.

First of all think of recruiters as lead generation not as sales and what I mean by that is that your recruiter when you are hiring your recruiter, when you are interviewing them they’re gonna tell you, “Ah, we’re going to find candidates, we’re gonna help you screen and evaluate the candidates to make sure they’re good fits, we are gonna help you negotiate and close the candidate, no, no, no, no, you’re not gonna let them do any of that. You’re gonna be way better at all of that than they are. All you want them to do is give you the candidate fill the funnel for you, right.” And this is analogues to a cold calling company that makes cold calls for you and sets appointments for your sales guys to close the deal.

The second tip is– Do not pay your recruiter a percentage of salary

But off course this is how the recruiters wanna get paid, right. They wanna get 20 to 30% of the first year salary for the candidate they place with you. The problem is that this model misaligned your incentives. You want to close the best candidate for the least possible salary and they want you to pay the most possible salary so it maximizes their commission. So, instead of doing that and this is what we do, we create a budget say $100,000 for a new developer, we go to the recruiter and we say, “Okay, you want 25% of the first year salary, we’ll pay you 25% of the budget, it’s a 100 grand.” Now, if we close this guy for 90 grand, you are gonna still gonna get 25K, which is 25% of our budget. But if it takes 1/10 to close with the guy you’re still gonna get 25K. And every recruiter that we have talk to you will go for this deal you know, you have to twist their arm but they’ll go for it.

Okay. So, now, we have filled the funnel we have got some candidates and we need to figure out if these candidates are good fit for our company. So, we need to access them and the way I think about this is they were you know, shaking candidates through a screen and we are filtering out the losers and we are trying to find the real Bad-Asses that fall through the screen. And a lot of companies use resumes as a screening technique. But this is really a disaster because resumes are absolutely useless, they communicate almost nothing, they are horrible for screening. First of all, they contain no bad information, right only the good stuff goes on the resume and secondly every resume looks different. So, it’s very hard to compare apples-to-apples. So, we don’t use resumes as a screening technique. After we like you we’ll open up your resume and look at it you know so we have some to talk about but we don’t look at it actually until after we like you. So, the first step in our process is not a resume it’s an application form and the reason that we do this, this is what it looks like, it’s a little form on our website and we just ask handful of questions, we need some contact information this one is for a Java Developer and we just ask, “Hey, how many years of Java Development do you have? How many client engagements have you ever worked on? And how would you write yourself as a Java Developer?” So, the first benefit that this application form has is that it requires a human being and submitting a resume does not require a human being the job boards do that automatically. So, people going and be like, “Yeah, I’m gonna this job description has the word programming in it, I’m gonna reply to that job and they don’t even read it. I mean you get 300 resumes, 250 people didn’t even read your job description.” So, this forces that’s the first call and this is we called the wide screen we are filtering out the absolute losers who don’t even read.

Now, when you fill this form you get a little email, we send you an automatic auto-responder email and this say, “Hey, thanks for your interest in our job. Let me tell you what the next step of our process is, we need you to answer a few questions that are gonna really help us figure out if you might potentially be a fit for our company.” And that thing we call the ‘Written Assessment’. So, this is the other sort of major filter that filters out people who are not interested in working in Blue Fish. The vast majority of people do not fill out the Written Assessment, they get that email and they are like, “I’m not doing this, I can go work across the street and I don’t have to fill out some crazy Written Assessment.” And we are like, “Yeah, great you don’t get to work with the Navy seals. I mean right, you will have to go through boot camp to be in the Navy, you can work across the street you know, some best buy IT Department, right. But if you wanna work for us you got to do this.” So, our Written Assessment is a serious of little essay questions, this is typically three or four, its designed for someone to fill out in about two hours. And we ask questions such as, “Hey, describe the techniques you use for organizing in tracking requirements. This will be for like a Business Analyst.” If you were a designer we might say, “Hey, here’s the website critique this give us some recommendations on the navigation, the information architecture and that sort of thing. Hey, this is one of my favorite questions absolutely you’re hiring a web developer, what you find hard about web development?” The way somebody answers this very open ended question will tell you a lot about what level they’re operating on, right. And you might say, “Hey, Mikey that seems kind of like a lot of work nobody is gonna fill out this freaking unless they know they are taking your essay test, right, you’re not gonna get any candidates.” But what we do as when we send the auto-responder email we also attach this little document and it’s titled, “What do you expect from the Blue Fish interview process?” And we tell them exactly what I’m telling you about our process. We explain here’s all the steps in the process and here’s why I do it because we’re freaking in Navy seals and if you wanna be a Navy seal you gotta go through boot camp and by the way the people were looking forward that’s what they are looking for, that’s what they are looking for is they’re tired of working with mediocre coworkers, they want to graduate into the working with Bad-Asses, they have the sense that they’re the Bad-Ass and they wanna work with Bad-Ass and they are desperately seeking a company who has a Bad-Ass only policy. So, if all you have to do is send your resume and you get hired there’s not a company Bad-Asses. So, what we find is our absolutely best candidates even companies who are candidates who never heard of Blue Fish before that they hear about our recruiting process and they take two steps forward and they’re like, “Oh, I’m intrigued by that, I’m interested in what is going on here something interesting is going on.” So, it absolutely does work.

So, after the written assessment and you know, of the people who fill out the written assessment, most people don’t meet the bar, most people fill out the application form don’t even you know, fill out the written assessment. So, we’re already down to a very small number of people who we like from their responses to the written assessment and that’s what we’re trying to do, we’re trying to minimize the human work that we have to do to process these candidates and access them. So, if we like your written assessment we bring you in for our screening interview. This interview is typically 30 minutes or an hour, it’s face-to-face, it’s with the Hiring Manager and the screening interview is all about giving the candidate back some love. They jumped through our hoops, they fill out our written assessment now we’re gonna spend sometime with them and make them feel good. So, it’s not a hard interview, super easy, we just ask, “Hey, give me a short review of your career, what if you’re working on lately? What you like best about your current job? What you’re looking for in a new job or a new company?” And the most important question of all is, “Hey, what’s your compensation history and what are your salary expectations?” I can’t tell you how many companies I talk to who’ll find the candidate, they’ll interview them, invest all this time and then they write offer letter, they send it off and I’m offering you a $100,000, the candidate says, “But I want $130,000.” And there’s been a mismatch all along. So, the very first time that you talk to the candidate to find out what their salary expectations are to make sure there’s not a mismatch.

Probably 90% this is easy interview probably 90% of the people make it through our screening interview, what really I was trying to do is figure out do they walk and chew gum at same time. Then if we like you, if you made a pass then we bring you in for the real interview which is our in-depth interview which the team of Blue Fish calls the ‘<23:52>’, right and this is a full day interview, it’s hard, it’s got lots of little steps in it and it’s just like the obstacle course you have to used to get pass you know, basic training, this the ___, you have to get passed if you are gonna work at Blue Fish. So, our goal for the in-depth interview we have two goals, one is selfish, we don’t wanna access your skills, your attitude, do you have the superpowers we are looking for? But we also at the same time wanna make the candidate fall in love with us so they’ll accept our offer when we make the offer because the candidates we’re hiring have a lots and lots of choices. So, this interview process is what we really make them fall in love. And we do that in two ways, the first way is we haven’t talk, we haven’t meet a ton of Blue Fishers, when you come in for this interview you are gonna meet probably eight different Blue Fishers and our goal because Bad-Asses are attracted to other Bad-Asses is we’re just gonna parade our little army of Bad-Asses in front of you so that you meet eight people they are all awesome and you say, “Well, everybody there must be awesome.” And you’re really excited about that. So, that’s the first way to make them fall in love. And the second way is to have a really high bar. So, this is tough interview we’re asking hard questions and the people we wanna hire they like that, they wanna to be hard, they wanna to be challenging, they’re eking for something challenging, they haven’t been challenged in their current job in a long time.

So, the first step of the day is what we call our panel interview and if you don’t take anything else from this presentation I really hope you steal, you blatantly steal this idea because I don’t know if anyone else does it this way and it’s awesome. So, the panel interview came about because we knew we wanted the candidates to meet lots of different people. So, we used to schedule eight individual one hour interviews that didn’t work for us because each interviewer was spending too much time building report in the beginning of the interview and you know, learning the history of the candidate and that kind of stuff. You know, it wasn’t enough time to actually have the rest of the interview. The panel interview takes three Blue Fishers puts in the room with the candidate and we basically have three interviews going on at once and we take two and half hours that’s what we typically budget for it. And the way it works is just round robin each interviewer has a set of those competencies that he or she has assigned to access and a set of canned interview questions that they brought in and the first interviewer ask question and the second and the third and then when it gets to the candidates, the candidate gets to ask any of them a question. And we just go around and around and around which is awesome because the candidate gets to see how the three Blue Fishers are interacting and gets to like the what the culture is like, we’re trying to make it a little bit fun and the three Blue Fishers are evaluating all of the candidate’s responses and end the questions that candidate is asking back to us which actually is the most important thing that the candidate says because it gives evidence of what the candidate cares about. So, the panel interview is awesome and then after the panel interview we huddle in a little corner and everybody votes and they say, “Should this person continue on to the next step or do we eject them out of our lives, right?” And we actually everybody sits around with the thumb and we go thumb up or thumb down. And we actually clear this and had time with the candidate and the way we do that is we say, “Hey, listen it’s gonna be a long day, it’s gonna be a tough day, if it anytime during the day you realize that this company is not a fit for you, are you comfortable letting us know?” And we’ll just in the interview and you can have the rest of your day back. And the candidate says, “Off course absolutely no problem.” And then we say and similarly I’m sure you wont mind if we realize you’re not a fit if we in the interview. [Laughter]

So, this works great and actually the candidates have fun you know, they’ll come back and they say, “How did I do I’m still in?” So, you know, we make a little fun. So, after the panel interview, if you get the thumbs up, you go to, oh couple of thoughts on effective interviewing questions. So, one technique that we use in the panel interview is called ‘Torque’ <28:14> the threat of reference check, this is a top grading concept, it’s awesome and the way it works is you ask the candidates, “Hey Sally, what’s your current manager’s name?” And you write it down Bob Smith, okay Bob. So, when I call Bob what’s he’s gonna tell me about last performance review. And this is the strengths and weaknesses question but it’s the one that works because the strengths and weaknesses question people are like, “My weaknesses that I work too hard and I care too much, right which is totally bogus.” But the other problem is that strengths and weaknesses question is too conceptual and it makes some really you know, think about their splurge that you know, Bob just told us about, right. [Laughter] This question you know, what is your manager gonna tell me about that question is a memory question, right. So, it forces you to remember your previous performance review and you know, recall. So, you get a more honest answer if you use that torque.

The second thing I’ll share with you is what I think is the best interview question of all.

So, I usually get assigned to competency of accessing intellectual horse power which is basically is you smart or not? So, my favorite question for figuring you out if you’re smart or not is–“Hey, in five minutes can you tell me about something you understand very well but it’s complicated and I probably don’t understand it all.” And we have had tell us about rock climbing, tell us about how to bake a great cupcake, tell us about how NASCAR works, it doesn’t matter what the subject is but you can tell if somebody understands what complicated means if somebody can dump it down for the new audience you can poke at it and ask more detailed questions just my favorite interview question.

Okay. So, after the panel interview we move on to the skills assessments this is a one-on-one hard skills interview for a developer. This is algorithms object oriented concepts, data structures that kind of stuff on a white board. We do it with one of the interviewers who were in the panel so they already have the report with the candidate. If you get the thumbs up on that then lunch and lunch is actually part of our interview process. We send you to lunch with three new Blue Fishers that you have never met and the only thing we’re asking the Blue Fishers when they come back is, “Hey, do you wanna go to lunch with this person again?” And we used to not do this, we used to say, “Can we come into this eight hour day into a shorter day and maybe bring in lunch or skip lunch and that didn’t work.” We just say, “They need a break, they go to lunch, they chit chat, it’s kind of like a cultural test.” But when you get back from lunch then we have the practical and this is probably the hardest part of the day and the practical is an exercise that’s designed to test both your technical skills and your superpowers at the same time. It’s an exercise it’s typically couple of hours. So, for a developer our practical is a coding exercise. So, we give them a little of the coding exercise, we give them a computer two hours later they gonna give us back you know, some code. If you’re a sales person our practical is we tell you brain with you a list of the people that you need to cold call and we’re gonna watch you make cold calls for an hour. And every sales person you interview will tell you that they are prospecting machine but they are all lying and lot of them are lying and you can tell by just sitting and watching them make cold calls for an hour. How do they deal with gate keepers? How do they leave a voicemail? You don’t even have to listen to the other side of conversation just listen to the sales guy side of the conversation and that will tell you if they actually know how to prospect.

If you were a Project Manager we say, “Hey, bring your current project status report of whatever project you are working on now and present it us like as if we were the stakeholders.” So, whatever the role is there’s a practical which shouldn’t require much preparation, you ought to be able to just show up and do it but it’s a real life test of how you perform the job. After the practical then is the executive interview, this is the last step of the day. The executive interview is two executives the top two executives in the company, CEO, COO. And this is an hour or an hour and a half interview and they meet with the candidate and we have two goals of the executive interview. The first is to dig into any areas of concern that the candidates are that the other interviewers may have had over the course of the day. So, if I interview you and I’m not gonna eject you, I’m not gonna vote to exact but I’m worried about this thing then we will tell you that exact is not dig into it during their interview.

The other half of the, the other goal is to sell the candidate on the company because if the candidate has made it here then we probably wanna hire I mean they have gone through the gone light and this is the last step. So, this is actually more selling than it is screening and the candidates tell us they love this I mean our employee say one of their favorite parts of the interview was getting to meet the people who run the company that just doesn’t happen and it shows that we have respect for the position, the respect for them, that we value you know, the contribution they are gonna make and they get to meet with the executives. Now, we put it last so that if we eject somebody the execs you know, don’t have to interview on first. So, that last you know, like I said hour and hour and a half for more senior position. We do that round robin style as well so the candidate gets to ask the execs questions. So, that’s the end of the day and there’s another step in the process which is reference check, right which might happen afterwards and a lot of companies feel like they have to do a reference check it’s almost you know, due diligence but most companies really don’t do the reference check effectively and not for their own fault but because the company that you’re calling for the reference check won’t tell you the truth in general. Most managers are not gonna tell you anything bad about a pervious employee. For one reason they can get sue and it has happened and a lot of people have worried about that.

The other issue is that if they hire that employee than it looks bad on, it looks bad on me if I tell you this person that I hired actually was a dud. So, I’m probably not gonna tell you that. So, we have a little trick for doing the reference check which sort of eliminates this and the way we do it is the first words out of our mouth is we say, “Hey, Bob I’m calling about Sally and I wanna let you know we decided to make Sally an offer. So, bam right of the gate, we’re not asking you what you think if this is a good hire or bad hire we’ve already decided she’s good enough for us.” And then we say, “The reason I’m calling Bob is I’m looking for some advice from you on how best to manage Sally?” So, it’s just like, “Hey, I’m the manager, you’re a manager, we’re members of the same club help the brother out, right, give me some advice.” And it changes the whole tone of the conversation they don’t feel like there’s that risk of getting sued or anything like that. So, we ask questions like, “Hey what advice do you have on for managing this person effectively? And how does she respond to feedback when you gave her constructive criticism? And hey, what were the best ways to motivate her? What were the best ways you know, what sort of things de-motivated her? Can I give her projects that require in night and weekends or is she gonna freak out about that? What about deadlines? Can I put her around a project that has a tight deadline or do I need to give her the projects that have a lot of padding? Does she like a lot of detailed instruction or she do better if you just give her a high level task or goal and just turn her?” I mean there’re all the same things that you’d ask if you were doing the real reference check, right but they’re discussed this advice and you’ll get a much, much better response out the manager. And we do this whether we have made the decision to hire her or not and frankly we tend to use our own judgment on whether to hire because our screening processes are better than most of other companies in town and our culture is different, and it’s all about a fit and so maybe she was a bad fit for them and is a great fit for us. So, we actually really aren’t looking for advice on how to manage her.

Next is making the offer.

So, when you decide to hire this person you have to make the offer and a lot of companies especially the younger companies I see are fall down when making the offer. So, I got some tips for that, the first tip is get the candidate to pre-commit to working at your company before you even make them the offer. So, what we don’t want is we don’t want the candidates to take our offer and take all the other offers she has you know, received and compare them because then she’s making her decision intellectually we don’t wanna make her decision intellectually we wanna make her decision emotionally. We mean she spend the freaking day with us for <37:40> I was wanted to fall in love, did she fall in love, if she fell in love, she wanna work for us. So, the way that sounds as we say, “Sally, you are stud and I everybody say so, everybody that made you loved, you aced all our questions, you’re a Bad-Ass, we want you to come work here.” When you feel the same way if when you decide that you’re ready to come work at Blue Fish, you let me know and we will work out the details. So, I’m not giving you the offer I’m waiting for you to make the commitment to me and then we’ll work out the details and that’s an honest sentiment. So, that’s the first thing we do.

The second is we make all of our offers in person. Back in a day we didn’t used to do this. We used to write it all down in a PDF and send it via email and we’ll be like, “It’s been three hours, we haven’t heard anything that do they hate the offer? Maybe she just didn’t check the email and we were driving ourselves crazy.” Now, we’ll make the offer in person you know, if Sally says, “Right there and a lot of times we’ll try to do this at the end of the executive interview if we like them let’s close them right there. Hey, we want you to work here. Do you wanna work for us? Yes, I do. Okay, what we were thinking is you’d have this much salary, this much variable compensation, this much equity, you’d have this title, working for this guy on these kinds of projects, how does all that sound?” And you can see on her face whether or not that’s good for her and she’ll tell you, “Well, I was actually thinking I’d rather have this or you know, I kind of take a little salary and a little more equity or whatever and you work it out and you negotiate that in person the way you’d a sales deal.” And after she agrees you right that up in a former offer letters just papering the deal.

And then finally after she has accepted the deal you have to block the counter offer. And there will be a counter offer from her current employer because most companies are not filled with Bad-Asses, right. Most companies have mediator peoples. So, wherever she’s working she’s probably the only Bad-Ass that she just knocks in the door one day somehow and she’s the only Bad-Ass they have and they do not wanna loose her, right. So, they’re gonna fight to keep her that she’s their best person. So, what we don’t want is her you know, going back to that company then making a counter offer and her deciding to stay there. So, the way we block that is by just role playing with her what that experience is going to be like so that she doesn’t get surprised by it. So, what we say is, “So, Sally you know, I’m super excited you’ve accepted our offer, we can’t wait to you to join, I’m curious what you’re gonna say if when they make a counter offer? When you’re going to resign and they make you a counter offer?” And she probably hasn’t thought about it. So, Sally might say, “Well, they probably won’t do that.” And then you say, “No, they’re definitely gonna do that because you’re stud, you’re a Bad-Ass, and they’re gonna wanna keep you anybody would wanna have you, they’re gonna make you a counter offer, what you are gonna say?” So, you’re forcing her to think through it. So, you say, “Well, I’ll tell him that it’s just time for me to move on.” You know, she’s thinking through what she’s gonna say? So, she’s rehearsing it with you. And then we say, “Okay. Well, what if they offer you like $20,000 more dollars, what you’re gonna say?” And she’s like, “Oh, okay, no, no, no, no, that’s not right for my career, plus I don’t care, I don’t like the direction the company is moving and my manager is jerk and you know.” So, you just getting her to work through what she’s gonna say, she’s building up the emotional commitment to you and she’s building up the emotional fortitude to say no to the counter offer whatever it is. This is a sales technique called ‘Post Selling’ that we also use in sales to prevent buyers who more after we close a deal works very similarly.

Okay. So, you made the offer and now there’re a couple of things to do after the offer. Now, the first one is the Sally made, this is a little underhanded, I love it. [Chuckle] It’s the old send the gift to the spouse trick, right. [Laughter] So, what we do is we you know, and she accepts that offer and we send them the spouse you know, bottle of wine or boquet of flowers or tickets to a show or a nice restaurant, and it says, “Thank you for sharing Sally with us. We’re super excited to have her on the team, we can’t wait to meet you as well now that you’re gonna be the part of the Blue Fish family signed by the Founder of the company.” Nobody does this alright, I mean this is insane. [Applause] You’re gonna have that spouse, no matter what the counter offer is, the spouse is like, “Look at this company this is awesome.” [Laughter]

So, now we have got her emotionally committed, we have got the spouse on board, you know, you’re set. So, then the last step is the first day on the job. And most companies fall down flat at the first you know, you show up and they don’t have your computer ready for you and you know, there’s like, “Oh, yeah there’s an off. Well, you can have one of these desks, just sit in the conference room for a while we get your phone distinctions to setup.” And they went through all of this ___[43:05] and they said bye to all their friends at the old company and you know, it’s all promise of the future and they show up and it’s okay.

So, we did the exact opposite when you show up for your first day it’s the celebration. We actually decorate your desk, we put balloons, we put a welcome to Blue Fish sign you know, above your desk, we take you out to lunch, we meet the whole team at lunch, we have a happy hour on your very first day, where your spouse is invited to come meet the team, the whole thing is like, I call it ‘Punch him in the face with love’ that’s what we are doing, right. [Laughter]

So, we want the whole interviewing, recruiting you know, experience to culminate in this amazing you know, first day that’s all promised. Most companies by the way do this completely wrong. When you leave the company most companies give you a going away party that is so bogus man that you’re leaving the company, I’m not gonna celebrate that. I’m celebrating when you join the company, right, it just makes so much more sense.

Okay. So, I have shared with you now the whole process from figuring it out what it is that you want all the way down to the first day on the job. And my goal like I said in the beginning is I want you to steal this content, I want you to steal these ideas unless you are from Austin and here’s the URL. So, this presentation downloaded from the internet all the interview questions are there. I’m begging, yeah. Please put some focus on this. Please put some energy into this. The number one thing that can improve your life is hiring a Bad-Ass Team. Your financial results will improve. I’m not only even run my freaking company and my financial results are improving because I have a Bad-Ass Team. But even more importantly than that your quality of life is going to improve because in any company there’s you know, one person who has this the founder, the owner, the person running the company, who has a special gift, you have a special gift, you have this opportunity that no one else gets and that is you get to pick the people you work with, right no one else gets this, everybody else has to work with whatever the other guy on top point, right, you get to pick everybody, you get to fire the people you don’t like, you get to hire the people you do like, it’s just life changing I promise you. When you build, when everyone is working at their sort of best abilities, when everyone is operating and also with the sell ender it’s amazing.

So, in my company I don’t even work there anymore, right. I’m not employed but I work on some other side projects. I go into the office every single day, I grab a little corner in the back or I get to work on my little side projects. I could do that from home, I don’t wanna do that from home that home does have all these Bad-Asses walking around the holes that I get to rib shoulders with like that’s how important it’s to me, that’s how you know, if there’s anyone in the audience who’s thinking that’s not my company, it can be your company if you just focus on it, put some energy into it, I promise you it will change your life. Thank you very much. [Applause] Mikey Trafton: I don’t know if there’s any questions. If are there…Yeah.

Audience: Thank you so much for your presentation as a CEO of a small company I think we wouldn’t be that impressive you know, our team is small, you don’t have big offices, how do we adapt what you’re just talking about to really not to socks off an applicant?

Mikey Trafton: So, remember I said the Bad-Asses attract the other Bad-Asses. So, the first four team people that I hired at Blue Fish ranged somewhere between atrocious to pretty good. And then person number 15 that I hired, his name is AJ Quitney and this guy was a Bad-Ass and I’m not sure exactly how I got him, he probably wasn’t paying attention that day somehow I got him and once I had AJ everything was easier, the next Bad-Ass I wanna to hire just met AJ and it was like I’m in. In fact the interview committee, once I hired AJ he went to meet AJ that’s it, that’s all anyone could see, no one could see everybody else. [Laughter] You can only see I and then we hired another Bad-Ass and he was me and AJ and the next guy. So, in some ways I got a little lucky there. But what AJ wanted the reason he was attracted was there was something about what we were offering, I don’t even know, I’d have to go ask AJ what that was that attracted him in the very beginning but I guarantee there’s something about your company, there’s something culturally you know, the way I describe it is I was a total you know, deep door kind of high school or whatever I’m married now, right. So, say there’s a one person out there that was a fit for me I never thought that there was someone out there but there’s someone out there it was a fit for me and there’s someone out there who’s a Bad-Ass, who likes your unique combination of whatever it is, right. It could be flexible work hours or it could be the technologies you’re working on or you know, just the personalities maybe there and if you board your job description to whatever those benefits you have you know, there’s someone in a crappy job who has to show up from 9 to 5 and if your job description says, “I hate working 9 to 5 you know, developer want it or something like that, if the day that they are frustrated about you know, having to fight the community to get to work on time is the day they will click on that and just same sort of marketing principles apply.”

Audience: So, it’s a two part question. Two part question, how many people for one posting goes from the screening interview to the whole day interview?

Mikey Trafton: We have gotten good enough now that based on the written assessment in the screening interview we probably bring less you know, less than five, probably three people through the got let. And some of them get rejected halfway through. And maybe we’ll get two people all the way through the got line to get to pick the best one.

Speaker 2: I’m sorry I’m gonna make it a little longer. All at the same day or five different days?

Mikey Trafton: No, five day, we can do it all on the same day. So, it’d be five different days.

Audience: Okay and the other question was for the reference check. I always get the answer, “Well, the situation for which I’m quitting the job I’m quitting now was because I didn’t get promise that I given. They don’t know that I’m looking for a job you can’t call there, I’m gonna be in trouble.” How do you block that?

Mikey Trafton: If we feel like their reference check is critical for us to understand if we wanna hire the person then we’ll have to tell them, “Listen we think you wanna hire you but it’s contingent on a reference check, you’re gonna have to go tell your manager that you’re looking and ask them if there’ll be a reference check.” But most of the time we have made our decision and we really are calling to find out some advice on how to manage the person so that can happen after they resign…

Audience: Thank you.

Mikey Trafton: Welcome. Well, Peldi has a question or I can repeat it Peldi?

Audience: Their timing right. When we hire somebody we have a problem where it drawn out too much. So, somebody we liked that I gone through the gone let but then we kept getting new people into funnel. So, the first guy had to wait two weeks before were ready to make an offer or not you know, or three weeks maybe and…

Mikey Trafton: Is it because somebody else is coming in and you wanna compare?

Audience: Right. So, basically the question is, if your funnel is not filling out fast enough. Or there’s some guys that are really good right at the beginning what you do? Do you interview them?

Mikey Trafton: You got somebody really good at the beginning you hire I mean you can tell a…You go put him through the got let you can tell if they are Bad-Ass, right. You hire Bad-Ass when you see them it doesn’t matter when they came in the funnel, it my opinion you don’t need to optimize, you’re not looking for you know, the difference between you know, the 0.0001% of the world and 0.000001% of the world, you hire a Bad-Ass that’s what I’d recommend.

Audience: So, the risks of you know, maybe there just you don’t know that they are Bad-Ass because you haven’t compared them with anybody that means that your interviewing process is not…?

Mikey Trafton: Yeah. So, when we hire it’s true that when we hire someone for a brand new role it takes longer, it takes more for we have to see some people we think and but in general we tend to hire people kind of for a fairly consistent role. The great thing about all these assessments, the coding exercise, we’ve got coding exercises answers going back, eight, 10 years. And when we know the best way to solve that problem, we’ve seen hundreds of them. Same for the written assessments, the same question’s answered over and over again. All of our questions that we ask for, in the panel interview are same, you know, tend to be the same for the competencies. So you, if you get some consistency, then eventually, you’ll be able to identify it. It is a little bit rough up front. Yes. Right there.

Audience: When you go through the, when you have people interview as part of a panel and you’re doing the voting over in the corner. Is that like, one person can say “no, you’re out of here” or is it two out of three, and that’s okay and they on.

Mikey Trafton: Yeah. It’s a little bit management discretion. So the hiring manager will, you know, we’ll, we’ll huddle in the corner and we have a role called the hiring manager, which is basically the person who this hire is gonna report to. And so, they’ll gather the three interviewers. Thumbs up, thumbs… If everyone’s thumbs up, then great. If everyone’s thumbs down, then gone. If there’s a, a mix, then he just pokes. Okay, what did you like? And you have all three of them there. And so, they’re saying, you know, “I didn’t think he was detail-oriented enough.” “Really? I really thought he answered that question in detail.” They do a little debate. And the four of them basically decide, should we kick him onto the next step and them to dig into detail-oriented? That’s kind of how it works.

Audience: Hi, Mikey. Right up here, to your right. Yeah. Hi, I’m Richard. And this question has to do with the reference checks. Do you only talk to the people that they send, that they send as references, or do you talk to other people, too? And the reason the ask is because at our company, we tend to talk to, we ask for three reference checks, but we tend to seek three or four more others and we tend to look for them, you know, (inaudible 53:49) or be our own connections. And we found that these others that we look for tend to give us some great insight on, you know, on how to manage, you know, the, the candidate. Or what some other strengths and weaknesses are. Could you comment on that?

Mikey Trafton: Yeah. I’ve, I’ve heard of that and that sounds like a great idea. I’ve never done that myself. Who we want to talk to, the most important, is your current manager. Right? That’s the most relevant and most recent and we wanna talk him whether it’s a good parting or a bad parting. So, that’s who we wanna talk to.

Audience: Mikey, so, so last year we heard all about core values and how fantastic those were, and it was really a fantastic presentation last year. Where do core values fit into this interview process? I really thought it would fit in either at the initial or the final screening or?

Mikey Trafton: Yeah. So, absolutely. Basically, it’s part of the panel and the executive interview. Some of those competencies that we’re assessing are our core value competencies. I talked a whole bunch about, last year, about how we assess for core values. So if you didn’t see that presentation, just go get it, you know, online. But that has all the interview, a bunch of interview questions and techniques, specifically, for addressing core values and culture fit, which we consider to be competent, you know, the same competencies and we, we tackle them in the panel, typically. Yes. I think I can do maybe one more. Yeah, right here.

Audience: I’m just curious, we heard, we heard earlier today about doing a trial. Like, you know, try it before you buy. And I’ve actually been through that as a candidate and I think it’s wonderful. I’m just curious, in your experience, how many times has the one-day interview failed you in either direction?

Mikey Trafton: Yeah. So, we err on the side… Dharmesh said something very important, which is that you can kill a culture quickly. So we err on the side for a false negative rather than a false positive. So we’d rather say no to someone that would have been a fit, than to say yes somebody who turns out to be not a fit. That’s what our bias is. And so, what we find is that our best candidates have jobs. Right? So they are currently employed. So it’s very hard to do the trial for the, for our town, for our can, the people we’re looking for. I love the idea of a trial.

We had done contractors. If we find someone who’s a contractor, we’ll hire them on as a contractor and, and see how they work on a project. We don’t call it a, a trial, necessarily. But that’s, essentially, what it is. But that’s not our standard process. Our standard process is the gauntlet, basically. I will say that any, if, no matter who we hire, we always say, “Hey, there’s a three-month, you know, check-in.” In Texas, we can fire, you can fire anybody anytime you want. Right? But just to make everybody, just to set expectations, we say, “Hey, in three months, we’re gonna check in with you and we’re gonna make a decision as to whether you, you know, it makes sense for you stay or not.” And that, and so, we do that for everybody, regardless.

But I, I mean, and you asked how, how good are we at picking. At this point, we’re pretty darn good. I can think in the last three, four years, we had one person that we went through gauntlet, that we hired that ended up not working out. And we kind of had, we were in a crunch. We needed somebody. We kind of had some, a little bit of doubts. And sure enough, he didn’t work, culturally. It was, it was a cultural fit, it was a, it was a weird technical cultural fit, meaning that he was not open to criticism in his code. So he would do something and our people who were way smarter than he was, you know, the A.J.s of the world, would come and offer some suggestions and he’d be very defensive. And so, we ended up shipping crappier code than we would have ideally wanted to. And ultimately, we were like, okay, we can’t handle this anymore. So we learned something about trusting our instincts through that.

Audience: Is three months enough?

Mikey Trafton: Is three months enough? Yeah, I think it is. Yeah, three months is enough. For us, it’s totally enough. Now, we are not a remote company. We are a, everybody, people come into the office, cuz we all just wanna bask in the glory of each other’s awesometude, right? So, you gotta do that in the office. So I think it’s faster to figure out some of these things if they’re in the office and you’re on the whiteboard with them all day everyday.

Say, I’m gonna be around all week. Thank you very much for letting me come back this year. I really appreciate it.

Mikey Trafton

Founder CEO

Mikey is an entrepreneur from Austin, Texas currently working on a stealth startup coming to cinemas near you soon. Previously, he was CTO and Chief Brand Officer at Alamo Drafthouse Cinemas and founded, run and sold multiple tech companies. He’s most proud of Blue Fish Group, a consulting firm providing custom software solutions to Fortune 500 companies like Southwest Airlines, Wells Fargo, and Bausch+Lomb.

A serial entrepreneur, Mikey is an expert in building high-performance teams with amazing cultures. He has a passion for helping entrepreneurs through mentoring, coaching, and investing.

A regular attendee at Business of Software Conference, he is also one of the most gifted communicators you may not have heard of. He has spoken on, ‘How to Build a World Class Culture in 3 Easy Steps’, ‘Recruiting a Badass Team’ and ‘How to Manage Your Badass Team’

More about Mikey.

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