The View from the Top – Talent - July 9, 201
MEREDITH: I’m Meredith Haviland, a partner at Foley Hoag, and I work with companies from start-up to exit, many in the tech sector. I’m joined today by Diane Hessan, CEO of the Startup Institute, and we are going to talk talent. Diane, as CEO of the Startup Institute, I would suspect you get to see talent from a very unique perspective, and I’m curious. Based on your experience, what do you see as underlying success when it comes to employees?
DIANE HESSAN: Well, hi, Meredith. I’m happy to be here. So that is the question, isn’t it? We’ve all made huge hiring mistakes, and we’ve all also had circumstances under which we brought somebody in who was so phenomenal that they changed the company. And one of my favorite quotes is a quote by Warren Buffett in which he said, if your IQ is 150, sell 30 points because you only need to be smart enough. We all hear things like that all the time. You don’t have to be a rocket - - well, I guess if you work in a rocket science company or if you’re a brain surgeon, that may not be true.
But in general we all reflect on, who are the people in our companies who just came in that we’d really like to clone, and who are the people that we wish we didn’t hire? So we actually - - at Startup Institute we went out, and we did research among the 100 or so partner companies that we have, which are all shapes and sizes. And we basically said to people, tell us of the big successes and big failures, what was the difference? And as it turned out, very few people said, my very best employees were the smartest. And, by the way, very few people said that the most important thing was technical skills.
And we basically uncovered six themes. So I’ll share what they are really quickly. Number one, the great employees were learners. They were not the people who were in there kind of blabbing away and talking and preaching all the time. They were people who wanted to learn, who were open to trying new things, who were really good at taking feedback and constantly wanting to improve. The second characteristic was that they were able to deal in a very ambiguous, unstructured, stressful situation without a lot of guidance. That was probably the number one theme that the leaders in our companies talked about, how you stay cool as a cucumber when the shit hits the fan, that sort of thing.
The third one was passion. This is not, gee, does the person have a cheerleader-type personality? This was more, does the person really, really understand what we do at the company, and are they excited about it, and do they have this kind of contagious enthusiasm for the company and the work?
The fourth was grit and scrappiness. People said things like, well, it’s fairly straightforward if you have a $10 million marketing budget to figure out what to do. But can we bring somebody in and give them a couple thousand dollars for marketing and have them figure something out? So that kind of determination and willingness to deal with difficult situations.
The fifth one was collaboration. Are they a team player? And the main measure here was, is this somebody that everybody wants to work with? And is this the kind of person that really celebrates the accomplishments of others? And then the last characteristic of success was just the general desire to do something that’s greater than yourself. And the opposite of that is the employee who’s coming in and always saying, well, what about me? What about me? What about my job description? What about my salary? What about my career path? And, of course, those are all good questions to ask, but not if it’s the primary focus of your life.
MEREDITH: Now, that’s interesting to hear. Obviously in a business that’s driven by tech, you would think that you really need those folks that are the most skilled in coding or in other areas of, for example, STEM. How have you seen people sort of go about hiring for STEM companies that actually works out in a more successful manner than what you might think going on?
DIANE HESSAN: Well, look, the STEM skills are clearly really important. I think it’s just that people talk about, oh, my gosh, well, I hired this guy. He was a phenomenal Ruby on Rails engineer. We brought him into the organization. And within two weeks, although he had phenomenal ability to write good code, everyone was coming up to me saying, get this guy out of here. He’s a jerk. And it’s really funny. That’s not a rare story.
When you talk about that - - and we obviously can’t see the listeners on this Podcast, but when you talk about that, everybody nods their head. They all will say the same sort of thing which is just - - what’s the saying? Hire for attitude and train for aptitude. So I think even in STEM-type jobs, those are really important.
Now, it’s not that you would take somebody who was a junior developer with a great attitude versus a very sophisticated senior engineer. But the technical skills are kind of the ticket to get into the ballgame, and companies are looking for a lot more.
MEREDITH: In a short interview that you might have with some of these folks, are there things people can look for or things people can do to see if someone actually does fit that company culture and the profile of someone who, as you said, two weeks later everyone in the office isn’t regretting the decision?
DIANE HESSAN: Yeah. Well, if you’re selling, and a lot of my early career was in selling, we always used to say, you can tell a lot about a customer and what they will be like to work with during the sale before they’ve actually signed on the dotted line. And I think it’s the same hiring.
So, for instance, when we talked about how important it was for people to be able to deal with ambiguity, if you have a really skilled candidate who wants to see a copy of the job description and then engages with you in a conversation for 10, 15 minutes asking about that job description line for line, they are not going to work well in a low-clarity environment period. And you just can’t convince yourself that people will change.
I think you also do need a good dose of basic interviewing skills to figure out what they have faced in the past and whether they can be effective. And I think in very, very technical jobs, people now are literally saying to the candidate not, have you been in a situation where you do this, but they are literally saying, can you write me a line of code? Let’s go into a room and try to build some code together.
So the interviews are very often turning into, A, a working session or, B, a social session. I hear about this all the time. We’ll have a Startup Institute person come back, and I’ll say, well, how did the interview go? Well, it’s not really an interview. We sat in the room and designed a web page, and I think I did a pretty good job of designing it. Or sometimes people will come back and say, it was really interesting. We all went out for beers. And they wanted to see what the person was like there.
So people are getting put into situations where they’re literally doing the work or doing the collaboration. People are observing it, and I think it’s a really great way to go. I know we have a lot of partners at Spence Institute, and what they want to do is they want to come into our classroom and teach the students. And, of course, it’s fun to teach because you’re paying it forward.
But the other reason it’s fun to teach is if you’re teaching in our technical marketing track, and you’re with ten students, and you’re teaching them how to launch a campaign off of a Facebook platform or whatever, in the process of spending that hour, hour-and-a-half, with the students, you know who’s good. And people will finish up and say to our local director, Allan Telio, I really, really liked that woman. Who’s that woman in the blue shirt? I’m really interested in her. So we’re all looking to hire less based on what people say and more what we observe them doing.
MEREDITH: And do you find that your students understand that and are taking advantage of those networking opportunities, or is there more that we should be doing to help educate the students and the others who are looking for the positions about the importance of these interactions?
DIANE HESSAN: Well, at Startup Institute we spend - - you literally could not go to Startup Institute and not become great at networking because we just - - we obsess over it. One of the statistics these days, 70% of jobs are found by networking and not by kind of taking your resume and sending it to a stranger.
And so very early on in our eight-week program, we teach people basic networking skills, and then we immerse them in all kinds of networking events. They’re networking with our alumni. We’ve probably got about 500 alumni in Boston. They are having coffee chats with perspective employers. They’re going to our Open Doors party. They’re hanging out in a partner fair or whatever else. We’re just putting them into lots of situations where they kind of learn all of the tricks of the trade of networking, because it’s a skill that they’re going to take with them for the rest of their lives.
And hopefully by the end of the eight weeks, they’re really great at it. They’ve gone from walking into a room of strangers and running up to the bar to have a conversation with the bartender, and walking into a room of strangers and just kind of taking a risk and beginning to have conversations with the first group of people that they see.
MEREDITH: And so Marina Hatsopoulos and I had a discussion about corporate culture not that long ago and sort of how important that was in growing and developing your business. How do you view that, how the culture of a company plays into this process, and how might a company go about making sure that the people they’re recruiting fit that culture?
DIANE HESSAN: Well, I think it’s a two-way street, Meredith. So Marina’s absolutely right. When you are out there, you’ve got to be really clear about what your values are and what it is about the people who you’re hiring that will fit with your culture.
For instance, when I was running Communispace, it is a - - I would call Communispace a client-obsessed organization. The deal at Communispace was, we would do anything to make our clients happy. And so we were looking for people who had that same feeling about wanting to work with customers. And it was absolutely critical not just in terms of the performance of the job, but also just in terms of whether they were going to feel like they fit in the company, or whether we were going to be sitting with an employee saying, look, I’m just so sick of making customers happy which, it’s amazing, people do say that.
The reason I say it’s a two-way street is I think corporate culture has a bigger impact on recruiting than on hiring, meaning if you have a candidate that you absolutely love, you need to make sure that when that candidate walks the hallways of your organization and interacts with other people that they feel like they belong. And I think it’s one of the reasons that we’re all talking about diversity so much these days.
We had a partner company at Startup Institute. And our partner companies are people who want to kind of get visibility within the start-up ecosystem, and they’re very often hiring a lot of people, and they’re looking to potentially hire our students. And we had one partner company who was hiring a ton of people, and they ended up making several offers to Startup Institute students, and they were turned down by everyone.
And I thought, well, maybe they weren’t offering enough money or whatever else. But I felt bad because you want to take good care of your partners. And I went - - and we went out and talked to the students, and they all said the exact same thing. Well, the company, the business is really interesting, but it’s like a fraternity over there. Everybody looks alike. They’re all white guys in their 20s who wear baseball caps and go to the gym and drink beer together. And I just didn’t think I would fit.
Now, let me say that some of my best friends and best employees are white guys in their 20s with baseball caps. But this is about diversity. Most women don’t want to work in a company that’s all men. And, by the way, most men don’t want to work in a company that’s all women. Gender matters. Racial diversity matters. If a person of color walks into a company, no matter how interesting the business is, and doesn’t see any other people of color, at a minimum it gives them pause. And most of the time they’re just going to say, I think I can find another place where I’m going to feel like I have more fun.
But the other place that I think we don’t talk about it very much is age diversity. There’s been a lot written. There was a horrible article, just depressing, written in the Boston Globe about a month or two ago talking about how hard it is for people 40 and older to work in start-up organizations, because they’re not as good with the technology and all of that. It was kind of insulting, and I also thought a lot of it wasn’t true.
But there are lots of people out there who are older who have deep, really, really valuable experience, and we can’t create organizations where those people feel like they don’t belong. So who you are and what you look like and who your people are matters a tremendous amount in a competitive job market.
MEREDITH: That’s interesting. I know that Maya Hayman has said that companies should think about marketing to acquire talent in the same way that they think about marketing to sell their products. Do you agree with that? Do you think companies just need to be out there actively looking for employees? Is there a right time to hire, a wrong time to hire?
DIANE HESSAN: Yeah, I think Maya’s absolutely right. A great talent person in an organization these days will also be a great recruiting person, and great recruiting people are really good marketers. And it’s funny. Now that we’re such a digital world, you can go to some of the great companies in Boston and look at their websites. Just take a half-hour and go to the Careers page of the websites of five to ten companies in Boston. You will see very significant differences. And some companies just have absolutely phenomenal career sites.
The other thing that Maya says a lot, which also is true, is you have to just be recruiting all the time, which I really think is true. I don’t think a day goes by when I don’t say to somebody, who have you worked with in the past that you love? Who are the best people who have ever sold to you? Who’s the best manager that you ever had in Boston for whatever? Because sometimes your job openings show up when you haven’t planned for them. And you need to be able to build a network of people.
I’ve got a lot of people out there where I’ve known them for a long time. I have these jokes, and I just say, someday we’re going to work together. Someday I’m going to have an opportunity where I’m going to pick up the phone and call you, so you better get ready for it. And it’s fun to be able to do that and network as the recruiter and not just as the recruitee. So, yeah, I think Maya’s absolutely right.
MEREDITH: And you’ve had some great experiences as CEO of Communispace and not at the Startup Institute. Do you see any trends that are different in hiring when you’re talking about a large company versus a start-up versus a scale-up?
DIANE HESSAN: Yeah, definitely. Look, I think those six skills I talked about earlier are critical no matter what. But in terms of functional and technical skills, I think when you have a start-up, an early stage company, what you’re looking for are utility players. You want people who can do everything. So you come in in the morning. You write some code. You make coffee. You talk to a customer. You hire an employee. You get the mail. You answer the phone. And then you run the financials. That’s what life is like in an early stage company. You have to be able to do everything.
As the company grows, the utility players have a harder time keeping up because you need more and more deep functional expertise for sure. So as you get to - - I don’t know what it would be. Depending on the nature of the industry, as you get to the $10 million mark, all of a sudden you’re saying, I need a really - - I need a world-class head of marketing. I need a CFO that has really, really grown a company or whatever else. It’s just different specs.
By the time you get to a big company, I think that the - - what you look for in terms of communication skills, leadership skills, ability to work the organization, including politics and global experience, ability to make complex decisions and deal with complexity and nuance become really, really important. In terms of process, I think that across all of those companies, there’s just an enormous difference between an A player and a B player. The great people can really transform you.
And for me I always tried to over hire, to find somebody who - - if I was running a fast growing company, the pitch to the person is, look, I know we’re small now, and I know that a lot of what we’re doing you’ve done 1,000 times before, but 2 years from now you’re going to be child, and 5 years from now you’re going to be saying, oh, my gosh, I’ve never done this before. There’s so much in here. So I think what you promise people is growth. But to the extent that you can hire somebody who’s way overqualified for the position, then you’re not recruiting as much.
MEREDITH: And obviously hiring folks that will be with you for the long term and that will be going through that growth requires some level of training. And I’m curious sort of what your thoughts are on kind of how learning is changing in the 21st century.
DIANE HESSAN: Yeah. Well, I think it’s - - I’m sitting at Startup Institute. So we’re kind of a - - we’re a next generation education company. And what that means or what I’ve learned that means is, lifelong learning is getting redefined. It used to be that how did you learn in your life? You basically learn for the first 25 years of your life. And then you spend the whole rest of your life applying what you’ve learned. And I think that is changing because the world is changing so much that you absolutely cannot have relevant skills if you only rely on what you learned in a formal classroom for the first 25 years of your life.
So I think that lifelong learning used to mean, well, when you retire, you can take a course in Italian. Now it’s different. I think that by 2020, certainly by 2025, our lives will have learning in them every day. You will - - just as we take a coffee break at work, we’ll take a school break. Because no matter what discipline you’re in, you can be relevant really quickly.
I’ll give you an example in web design. If you were a web designer five years ago, you had to know Flash. Now if you know Flash, that’s like knowing medieval history. It’s just - - it’s done. And knowing Flash doesn’t matter anymore. Now you got to know HTML5 or whatever. So we will all be going back to school to stay relevant for the rest of our lives in organizations.
Lawyers already do this, Meredith, so you’re probably listening to this going, gee, that’s not new. Lawyers do it. Sometimes financial analysts do it. But most of us - - you got a Harvard M.B.A. I figured, I’m done. We get our M.B.A.s, and then you were qualified to be in business forever. Or you become a software engineer, and maybe you’re qualified forever. But I think all learning that we need to go back to school. Sometimes it’s just an underlying course.
In the case of Startup Institute, our classes are filled with talented people who just woke up one morning and found themselves with traditional skills, maybe working in an organization where they were just bored or not engaged, and they said, now I’d just love to work in a company that’s really growing fast like in tech, where we’re building something and I’m part of a team, and I’m walking around, whether it’s a start-up or a scale-up, or whatever. So not everybody wants to be a founder, but a lot of people want to work in Mass TLC-type companies. And all they need is a network and a lift in their skill set.
And we do that within eight weeks, and it really is amazing. But people always say that without that, without having a chance to kind of get the technical skills and the culture skills and that whole different mindset, it’s very difficult to make a transition just based on the education that you had in the first 25 years of your life. So I think we’re going to find education is all shapes and sizes, all numbers of hours, and it’s not just going to be college or a MOOC.
MEREDITH: So when you think about employees that are thinking about making some sort of transition, or they’re in their current job bored, and they’re looking for something new, what would be the one piece of advice or few pieces of advice that you would give to them to sort of evaluate how they should approach their next step?
DIANE HESSAN: Well, I think that everybody who needs a change in their lives should just come to Startup Institute. Oh, no, no, no. Although, I will tell you that we spend a lot of time on the phone with people kind of helping them think it through. And because people very often have the same sort of questions. Am I courageous enough to take a job where I have so much job security or a job where I really love my colleagues and changes? Haven’t I already been out there working for ten years already? Am I stuck?
And what I always say to people is, number one, think about - - I think life is long. I think we have a lot of chapters. We have a guy at Startup Institute who’s in his 60s. And he just said, well, I was thinking, I have another 10 years to work, and I just didn’t want to be a database administrator in a large company anymore. I want to kind of do something exciting at this chapter of my [career 25:43].
So I think it’s really an exploration of saying, what do you fantasize about? What would you - - what kinds of people would you like to work for? If you go online - - if you’re reading the newspaper, I guess people still read newspapers, but if you’re reading news, what are the companies that really interest you? Do you like reading about Uber because you take it all the time, or do you think it would be really, really fun to work for a company like that and the characteristics of it?
And I find that if people give themselves the space enough to just sit down and begin to think about what they would love to do, it’s really incredible how they will find that they have friends, or friends of friends or other people in their networks who can really kind of help them get there. But literally there are ways now to take very traditional skills and turn them into very modern skills.
And, in fact, I always laugh. Right now all you hear is STEM, STEM, STEM. And what you think of is, we need to send every high school student in the city of Boston to coding school, because that’s the most important thing is going to be able to write code. And yet right now at Startup Institute we have four tracks. You can learn web development, web design, technical marketing, or sales. And then, of course, that overlays with all kinds of real-world projects and culture skills and everything.
But the track, when we ask people who are hiring, the number one thing that they are looking for the most, at least right now, is sales skills. They want people who can go out there and sell. Sometimes it’s very sophisticated selling of enterprise software, or its account management. And sometimes it’s BDRs, business development representatives, who understand technology and understand Salesforce.com and who can just get on the phone and make calls and have thick skin. But everyone is looking for salespeople. So it’s not that you have to say, well, gee, I’d love to work for a start-up, but I don’t want to be an engineer. There are just so many possibilities out there.
MEREDITH: That’s really interesting. I think all the points about your basic skill set and what you may have learned in school and this notion of just the continual learning and being able to from the company side really look in all different places for your next employee is really fascinating. Have you had opportunities at the Startup Institute or in other situations to work with companies that are very small in looking for Employee One or Employee Two, and does that look different?
DIANE HESSAN: I think Employee One is probably just as hard as finding Customer Number One. If you have a couple of founders, and you add an employee that changes 30% of your staff or whatever else, I just - - I think above and beyond early on, above and beyond finding a utility player, I see early stage companies basically asking the really great questions. Can I have fun with this person? Will they fit in? Do they have our passion for the business? Do they bring a skill set that we currently don’t have in the company? And one of the ones that I think is really important is, will this person work as hard as I do?
Because early on if you join a team of 2 people who stay up ‘til 11:00 at night, and you don’t, it’s a problem. And it doesn’t mean anyone’s wrong or anyone’s right. But I think work ethic and how that plays out matters a lot early stage. I also just say to very early stage people, even if you don’t think you’re ready to add your third person, Employee Number One now, just look early. Meet other people who are in start-ups and start to build for yourself a profile of what you want, and do your own networking.
Because personally most of my hiring mistakes happened when I was desperate, and I just needed a body, and I thought somebody was good enough. And, of course, they weren’t the right fit. So it goes back to what Maya said about recruiting all the time. But it’s certainly really, really critical for Employee One.
MEREDITH: Well, thanks so much, Diane. This has been really interesting and learning a lot about what companies should be looking for, what employees should be looking for, and I thank you very much for your time. I think this will be really useful.
DIANE HESSAN: Well, thanks to you, Meredith. And, yeah, it was my pleasure.