By Robert Glazer
Looking for experience in a new hire seems like a no-brainer, but aptitude and capacity can prove more important.
Growth is notoriously tricky to manage and maintain. In 2015, my company made the Inc. 500 list for the third year in a row, but soon afterward we began struggling to keep pace with our growth and hiring needs. The solution seemed to be to bring on more “experienced” hires—especially at the account manager level, which is our critical interface with clients. But the tactic backfired.
Over the next few years, I found that these “experienced” hires often underperformed, while junior team members typically stepped in to fill managerial roles with more success. It was a pattern that I now call the “The Capacity-Experience Paradox.”
When a company is growing quickly, there are always new roles to fill and opportunities to promote from within. Looking for experience seems like a no-brainer, but in the face of an evolving economy and workforce, aptitude and capacity can ultimately prove more important.
The chart below illustrates what can happen when a company is growing 30 percent to 40 percent a year (Company Growth Rate). In the example below, the company needed a manager, then a director, and ultimately a vice president for a given function.
What companies often do when they realize that they need someone to fill a “big title” role is find someone “experienced”—someone with many years under their belt holding that same or similar title. Unfortunately, in a high-growth scenario, such hires often start off strong and then level off or fall behind.
Sometimes, they even start off poorly because they don’t have a team in place. This requires them to do the work and get their hands dirty, something they haven’t done in a while. Leadership is then left struggling to understand why someone with so much “experience” is underperforming.
What the hiring team missed was how long it took that person to get their experience. In other words, the slope of their personal growth rate. The hiring team may have chosen someone with a relatively flat slope but had a lot of time to get to where he or she was.
This is where the experienced hire often runs into trouble in a high-growth situation; it’s also where you’re likely to run into trouble as you’ve paid in advance for value and experience, things that can all too quickly plateau.
Consider instead focusing on high-aptitude individuals; people who start a little “in over their heads” at each new level they reach. Such people are always in aggressive learning mode, because they want to rise to the next position. Their trajectory and capacity to learn is such that they can stay with your company, growing with its needs.
High achievers want to prove their worth, so they typically rise to the occasion if given additional responsibilities. As a bonus, those with less experience often come with smaller price tags—something sports teams have learned when building rosters through free agency versus the draft.
If a less experienced hire can be trained and motivated in 18 months to reach the level of a person with many more years of experience, you’ve gotten yourself a great deal. This is something Bill Belichick, head coach of the New England Patriots, has always understood.
Here are three ways to identify a candidate with great potential and aptitude.
1. Seek out rising stars. To find a high-capacity learner, look for someone who has risen through the ranks quickly. If you have to choose between someone who took five years to become a manager and one who got to the same level in two, the latter is often the better bet. Chances are, that person is looking to move on from that company because they want more opportunity—and that’s who a rapidly growing company needs.
Proceed with caution if a candidate has had to change companies often to get promoted. If he’s never been promoted internally, that can be a red flag. Real high achievers move up at wherever they’re employed.
2. Gauge a candidate’s initiative and confidence. A person who asks for opportunities demonstrates that they have the confidence and the interest to take initiative, so keep an eye out for people who are willing to step up and volunteer.
Warren Buffett has said that the three traits he looks for in a new hire are intelligence, initiative and integrity. He believes these qualities enable an employee to make the most of their innate talent and develop positive habits, which signals great potential to grow.
To determine if employees have real drive, look for people who raise their hands. A responsive employee creates her own opportunities and controls her own destiny by volunteering and leading initiatives. Internally, a leadership development program can also provide opportunities for ambitious workers to show their strengths.
For outside hires, consider asking candidates to deliver a presentation and respond to questions. This has worked well at Acceleration Partners. We’ve found the best candidates demonstrate confidence and answer difficult questions with poise.
3. Train to increase capacity holistically. Functional training prepares employees to perform better in their roles. The goal, however, should be to improve capacity holistically and get people ready for the next level.
Provide coaching that not only helps employees improve at their jobs but also increases their capacity overall in areas such as leadership, time management, prioritization, decision-making, self-awareness, and self-confidence.
At Acceleration Partners, we use our formal AP Fellows program to help associates and managers develop leadership skills through a variety of learning and mentoring opportunities. This sort of program is vitally important to attracting high-achieving talent, especially among millennials. According to a Gallup study, 59 percent of millennials are seeking jobs that offer training and professional development.
Informally, we also train employees by encouraging associates to cover for their managers when they are out of the office. This provides opportunities for junior staff to try out the roles they want and gain leadership practice. It also gives employees insight into company operations, information that, according to a Geckoboard and Censuswide survey, increases motivation and productivity in employees.
Experience isn’t a bad thing, but it can be expensive and, surprisingly, lead to complacent hires when it’s not combined with aptitude and the ability to grow. High-growth companies will often see a better return on investment (RPOI) by looking for employees who learn quickly and want to advance within the organization, allowing them to grow with your company.