Small business owners: Hire based on potential, not on past performance

When looking for that special person to hire, judge based on potential.

When looking for that special person to hire, judge based on potential.

Every investment prospectus has a footnote to the effect that past performance does not guarantee future results. Based on the ideas presented in a recent Harvard Business Review article, I’ve decided every resume should also contain that footnote.

In “21st-Century Talent Spotting: Why potential now trumps brains, experience, and ‘competencies,’” Claudio Fernández-Aráoz makes the case that potential – defined as the ability to adapt to and grow into increasingly complex roles and environments – is more predictive of success than past job experience and competencies. Fernández-Aráoz is a senior advisor at a global executive search firm and author of a new book from Harvard Business Review Press entitled It’s Not the How or the What But the Who: Succeed by Surrounding Yourself with the Best.

As Fernández-Aráoz points out, a job candidate’s track record doe not mean he/she will thrive in the culture of your organization. Likewise, in today’s fast changing world, there is no guarantee that the competencies you’re hiring for today are the ones your business will need to succeed in the not too distant future. It’s been a long time since I’ve been part of the hiring process, but both of those points rang true for me as I thought back to those years when I was the one screening resumes and doing initial interviews for a PR agency and before that for the corporate communications department of a large insurer.

It is highly possible for a job candidate to end up as a dud hire despite looking fantastic on paper and sounding great when he or she is talking about past successes in an interview. Similarly, I can think of one or two people whose resumes were weak but who came across as having that certain something that made you want to take a chance on them. What a treat to have your intuition rewarded by someone who grows into their job and exceeds your expectations.

For small businesses, making the right hire can be a make or break proposition. Hire the wrong person to handle sales, for example, and your company may quickly be in a world of hurt. Or hiring someone to manage day-to-day operations while you work on strategic issues can go badly awry if that person manages in a style that alienates your staff and customers and is antithetical to the culture you’re trying to build.

Identifying potential

So how do you look beyond someone’s resume and evaluate for potential? Fernández-Aráoz points to five key indicators of potential:

1)    The right motivation: a fierce commitment to excel in the pursuit of unselfish goals (i.e., not someone who is selfishly ambitious but who is ambitious for the entire organization to excel).

2)    Curiosity:  A penchant for seeking out new experiences, knowledge, and candid feedback and an openness to learning and change.

3)    Insight: the ability to gather and make sense of information that suggests new possibilities.

4)    Engagement: A knack for using emotion and logic to communicate a persuasive vision and connect with people.

5)    Determination: The wherewithal to fight for difficult goals despite challenges and to bounce back from adversity.

Alas, many current hiring practices are focused entirely on assuring that someone has the “right” background for a position, regardless of whether that background includes instances in which the person exhibited any of the characteristics of potential listed above. For example, companies write job descriptions that end up paring down a pile of applications to those few that meet rigid education, experience and competency requirements. Some companies, including staffing firms you may be hiring, use software that filters resumes for keywords. Both of these practices can lead to the resumes of candidates with loads of potential being passed over.

So how exactly do you evaluate someone’s potential? According to Fernández-Aráoz, the key is to discover a person’s real story through careful interviewing and detailed reference checks with the person’s manager, peers and direct reports (if applicable). Always seek out real examples, instead of just allowing someone to pay lip service to how important they think the topic you’ve raised is.

Your goal is to discover whether the person has real-life stories that show he/she has demonstrated the desired qualities…or lacks them completely. Here, for example, are questions Fernández-Aráoz recommends for ferreting out whether someone has the requisite curiosity:

• How do you react when someone challenges you?

• How do you invite input from others on your team?

• What do you do to broaden your thinking, experience, or personal development?

• How do you foster learning in your organization?

• What steps do you take to seek out the unknown?

By spending more time evaluating where you think the job candidate in front of you could go in the future instead of exploring where he/she has been in the past, you have a better chance of making the right hire.

(Harvard Business Review only provides links to full articles to subscribers. But you can read a preview of “21st-Century Talent Spotting” here and also order a pdf of the whole article.)

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