EP28: Construct Your Company So it is Unappealing to Parasites.

Corey and Chris talk about when to hire the right people, how to hire the right people, and horror stories. It starts with the tension between talent and alignment. There are three scenarios you don't want to end up with a new hire. You always want people that are talented and aligned, or else you either don't hire them in the first place, or accept this and fire them now. You may have a candidate that is talented and capable. You think talent will take over and they will become alignment. Never happens. Lack of alignment may be due to a fundamental insincerity and sucking out of the company what they can. Yes, I can do that, hey can I have that corner office?

Next, you may run into the candidate that has no talent and no alignment. First, why would you EVER hire that person? If you did - time to fire them. The final is the tougher one. They have alignment, but why only have some of the talents you need, but not enough so they lack performance. They just aren't catching on. Join Chris and Corey for this episode of the Market Dominance Guys: Construct Your Company So It Is Unappealing To Parasites.

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The complete transcript of this episode is below:

 

Corey (00:34):

Hey Chris, great to chat again. One of the things that I think we were talking about last time in abbreviated detail was when to hire the right people, how do you hire the right people, and maybe some horror stories of when the people that we hire are not in alignment with what our values are as a business, particularly in this market dominance role.

So I think it'd be interesting to hear from the master here, hear from you about, when you're knee deep in market dominance growth mode, and you have your systems, firing on all cylinders and everybody's in their respective swim lanes. How do you go about hiring and adding to the team where we both know that sometimes adding one person that is not culturally aligned can bring down the entire kingdom, so to speak, or at least set us back many, many, many months? So what have you learned from the market dominance growth patterns that we've seen and you've seen in certainly so many of your client companies and how it relates to hiring the right people and what are some of the processes folks used to make sure that they're hiring the right folks?

Chris (01:45):

Well, it's a fascinating question, Corey. I mean, we know that there's always a tension in every company, between talent and alignment. At General Electric, they used to talk about this, that you had the folks who were essentially talented and aligned, and of course those people are golden, and then you have the people who are talented and capable, but misaligned, and you tend to keep them because you keep thinking that their talent or their skill or whatever, is going to take over and somehow maybe they'll get aligned and then that doesn't ever happen and you finally end up firing them.

I mean, they used to talk about fixing that, but I don't know very many cases where somebody whose lack of alignment is due to fundamental insincerity as a human being and they're just kind of in it for themselves and seeing what they can suck out of the company. Ask not what you can give to the mission, they ask what's your pot of gold is going to look like at the end of the rainbow, and by the way, can I have that corner office please with this nice view?

And then there was the easy one, which is the no talent, no alignment. And how in the world did you hire that person? So there's your hiring processes, your recruiting and hiring processes be able to avoid, but anyway, that's easy.

And then there was the tough one, which is the person who has very well aligned, but they seem to have some of the skills, some of the talent they need, but it just doesn't come together, and so you're getting a performance, really it's not alignment and talent, it's alignment and performance, you're not getting performance. And what do you do about that?

Well, what do you do about it? Well first I think is you construct your company so that it is unappealing to parasite. The funny thing is, to where you can do...

Corey (03:21):

Parasites?

Chris (03:26):

Parasites, yeah. You're probably wondering what is a parasite?

Corey (03:30):

I saw the movie, it was fantastic. So I'm on bated breath here. Yeah. I'd love to hear about that.

Chris (03:35):

It's so funny that movie came out. I haven't seen it, and then it won all these awards, and people are talking to me about it, and I've been yapping about parasites for 35 years and it's, wow, finally, somebody else thinks they should make a movie about these creatures.

But parasites are funny, and businesses, in all systems, if you have something that is valuable and robust, that means it'll survive a fair range of experiences, including injuries and insults, then that something, whatever it is, is likely to be parasitized because one business model, so to speak, is to attach yourself to it and just suck good out of it, right.

So our bodies are like this, by some count, most of the cells that are in me right now, in my physical body, from the tips of my toes, to the top of my head somewhere, and a lot of them in my gut and on my skin are actually different organisms, they're not my DNA. If there is such a thing as my DNA, and I'm not sure I bought it anywhere or whatever, but it is certainly whatever I got from my mom and dad, that DNA is not their DNA, these are other organisms and they're living on me like I'm some sort of a planet or a country, a state or whatever it happens to be.

And they have their own lives and they have their own concerns and their own wars going on. You know, when the war and your gut gets bad between some creatures and some other creatures, you might feel ill. People are finally figuring that stuff out.

And well why is that true? It's because my physical body and its relationship to the world is such that I will survive a wide range of things, including this load of parasites. Some of which are good for me, some of which are bad for me, but they're all living off me. I've got to do the eating, I've got to go out and find something to eat, and they ultimately are eating what I ate in some form. Like maybe out of my gut, maybe out of my blood who knows what they're doing but they're living. They don't have to find a meal out in that world, they get to find a meal in this world, which is me.

And companies are like that because companies are pretty robust. If you have a company that's achieved market dominance, for instance. So let's posit that you've been following this program and you now are dominating, are in the process of dominating one market. You look pretty delicious to somebody outside who would love to come and join your band and enjoy the fruits of the hunting that the company does as the company finds new customers and goes through those first conversations we talked about and those followup conversations and builds trust. Think of the company's trust goodwill in the market as an estate that the company owns, it has farmland, so to speak, that it's created, it's taken the stumps out of the soil and can grow crops, right? So why not join up with that company instead of having to go and do your own hunting. As an individual, join up with the company, and that's why people join companies.

And one of the reasons is, hey, they're bigger than me. It's why my mom always told me to join a company, she said, "You know, why would you ever leave 'that good company'?" Of course, my mom lived through The Great Depression back in the '30s and a company looks like an island of safety to somebody who's been through that, compared to being an individual on your own.

When I went out as a consultant in 1988, my mom was horrified because I was leaving the safety of something that was bigger than me and more robust, and I was going out in my own little rowboat to do well. Now I went from making 60 grand a year to a quarter million a year between a Friday and a Monday, I thought that was pretty cool. My mom thought it was terrifying, the fact that I had a one-year contract for a quarter million dollars, it's like, are you kidding me? That's not a long enough contract. What happens after that? I go, "Mom, it's four years of what I was making." She says, "Yes, but what if you can't find a job in those four years?" Really, I'm telling you.

So it's very interesting. So the attraction is toward the robust entity that you can feed off of, and yet what you want in your company aren't people feed off it, you want people to contribute to it. That is everybody at a company has to be, from the bottom to the top, has to be fundamentally underpaid. That is, we all need to contribute more to the mission than we take out of the company economically. And at the top, so to speak, if you call it the top, I don't really think it is, but if you look at the traditional hierarchy, then you say all a CEOs sitting there at the top of the company. Well, that should be the most underpaid person, that should be the person whose contribution exceeds the value of their taking out by the most and whatever that equation has got to be set.

And that's pretty easy to do with founder-led companies. Actually, it's one of the reasons that founder-led companies do so well, it's because the anchor for the entire anti-parasite mechanism that you want to put in, is to make sure that the top person is not the top parasite and the worst hire in the world that you can make, and I've made, it is to bring in a very talented person with the pedigree, who's joining your company as CEO in order to milk the company.

And you can tell you have one of those when they talk a lot about their sincerity and what a team player they are. As soon as somebody in an interview process, as soon as somebody tells you they're a team player, you know they're a parasite. It's a certainty, because the team players don't talk about being team players, it's like saying to somebody that you meet over coffee, "Oh, by the way, I breathe oxygen."

Corey (09:18):

What do they talk about? What should they talk about?

Chris (09:21):

What should they talk about is they should be very curious about the company's mission, about the good that it does for customers, that the company does for customers. How it achieves that and how it operates on the inside in order to be able to continue to create that value for customers and how it is financed. They should be interested in that because that might affect what happens next, like are we financing by selling or as a gross processor? Are we financing by stock appreciation? Those are the curiosity that a person would show, sincere curiosity in the company, is an indicator of potential alignment.

Now, of course, there could be a curiosity that's like Little Red Riding Hood's Wolf. Very curious about how good Red might tastes but it's a fine line, that's why hiring is tricky.

Now there are a bunch of things in the world of biology that are very tricky. That it's kind of amazing when you think about that they've ever been figured out, that eating is one of them. Think about how dangerous it is to eat, that you're putting something inside your body. You better make it pretty good choice of what's going in there because it might be bad. It has an advantage, whatever it is from being on the inside, and you've decided voluntarily to stick it in there, put in your mouth, chew it up.

Corey (10:44):

Well Chris, we spent a lot of time in person and if it truly was dangerous to eat, then I'm living on the edge. I have for many, many years so.

Chris (10:56):

Exactly. I think that we... Obviously, biology has solved that problem, and organisms have figured it out, all sorts of things, how to eat each other too often, how to procreate without one killing the other, although in the world of spiders, that's a little tricky and we all know the praying mantis' fate.

And so there's a lot of trickiness to this whole business of interacting with other creatures. And when you're a company, you're a creature and you're going to hire somebody, they're a creature. If you're going to eat a really big, dangerous meal, like a CEO, you better make sure it's not going to eat you from the inside.

Corey (11:29):

If I'm hiring a senior person like a CEO or a senior leader, don't I want to know about their previous team and how they interacted with their previous team? Isn't that a leading indicator or a positive indicator? Or is there danger in asking a question like that?

Chris (12:46):

I used to think that you learned a lot from that sort of thing. I'm learning by getting to observe Amazon's senior hiring process. It's something that's very interesting. Over there at Amazon, as far as I can tell, they don't really want to know about what your team did, they want to know about you, they want to know what you did, because that's who they're hiring, they're not hiring your previous team, and they don't want anybody who got lucky and a lot of people get lucky in business because you can join something that succeeds and you had nothing to do with it. Maybe you were even harmful, who knows? And then you put that on your resume.

And do you ever see anybody in LinkedIn put in their profile, "I joined this company in 2016. It took me two and a half years to figure out what I was doing. By the time I figured it out I don't think I'd made much of a contribution but the company got sold for a lot of money." Nobody says that. It's a common true story, but nobody says it. Nobody comes right out.

So what they do at Amazon is they ask these probing questions. They go down, down, down into their leadership principles. They asked the many why's, what did you do? What did you do? What did you do? And they encourage you to talk about you, I, they want you to use I, and they want to find out a couple of things. One is, do you believe or have simpatico with their 14 or whatever this leadership principles, especially the big ones of customer obsession, of big thinking, of going deep?

You know, they've got these principles and they coach you, by the way. It's really interesting. The Amazon process, they coach you, it's not like a trick thing of figuring out, oh, did you get lucky and figure this out? And they say, look, this is how we hire, and this is what we're looking for. And then they probe like crazy in the interview process. And then, and did they make a quick decision?

So my point is, knowing about the person and how aligned they are with your principles is much more valuable than did they get lucky once or twice. And by the way, if you get lucky, once you might be hired into other situations where you get lucky. I know a kind of person who has come in to companies I've been at, whereas no longer there, and their job is essentially to auction the company off. They get a big carve out and the company sells no matter what because it has value, and they're just like, oh, they get another one of those. Well, what were you as CEO of three successful exits, really? Or were you the butcher? So it's really interesting if you look at that.

But let's take the more mundane hires. Not mundane, but the less scary ones. They're all scary. How do you get somebody on board who aligns with your mission? Well, they better be curious about your mission and they better dig it. They got to think your mission is worthwhile because they're going to work really hard at aligning with other people. Like at ConnectAndSell, our mission is to enable companies, to dominate markets by a conversation-first approach to business. So if you were to come to me, joining ConnectAndSell, and you really said, "You know, I don't believe in that conversation's first crap. What's that? I believe that what you should do is advertise like crazy on social media. And if you have to talk to somebody, I guess that's okay. But you know, so what, right?"

You might still love the idea of the connected self thing. Like I like this company it's growing, it's profitable, blah, blah, blah. I want to be part of it, and so I'll answer the questions in the interview and have it in a benign way and then we'll point to my previous successes and you'll hire me. And then I come on board and I don't even like the mission and I'll start kind of edging away from the mission, right? So hiring somebody who doesn't dig the mission, doesn't get the mission, isn't curious about the mission, there's a real problem. And the younger the company is, the scarier it is to hire somebody who believes in another approach. And I've been at many companies that have done this, I've made this mistake repeatedly, or I've participated in making this mistake, or you hired the person, and the more senior, the role, the worse whose actual beliefs don't align with the very purpose of your company's existence. You're hiring somebody who wishes you were dead. But what they really wish is you or someone else, right? That's a problem.

And then the other one that is, okay, the hiring process. So you get it all really, really good, and you have these probing interview questions and everybody's trained interview, and you do it like Amazon. It's the most awesome process I've ever seen in my life. I'm still in awe that I got to see a little chunk of it yesterday and it's like, wow, what an amazing thing they do over there. And say, you get that right.

Well, what if your company isn't designed for action, for achieving the mission? What if it's designed for parasites to grow and multiply in their power? Well that would be a problem because then if you get somebody who's got a little bit of parasite in them, they're going to rule the roost over time.

So here's something I've done. Two things I've done over time that most people would disagree with but I think it's worth folks thinking about it a little bit. One is I don't allow standing meetings except for a meeting that's called the forecast call. That's actually, it's a sales best practices call, but a regular meeting or once a week meeting that kind of thing, that people have to be at, those are outlawed in my world. And the thing I'm trying to avoid is the failure to sunset the regular meeting, to say the status meeting on a project.

So a new project starts up, we're going to, let's say, we're going to figure out whether we can enter a new market. So we spin up a little team to go look at that market. At ConnectAndSell, the way we would do that as we'd say, well, the market hypothesis is a list. We can make the list, we take a couple of people who are our best top of funnel colors, we come up with a candidate message in the form of a breakthrough script, we train those people up on the breakthrough script, our top of funnel people, we turn them loose with connect. So, in the script, they have 30 conversations a day, we listened carefully for what those conversations sound like, we look at the appointment setting rate, and if over the next two weeks or, however long it takes us to achieve conversations equal to the square root of the number of estimated participants in that market. If that number is above 5%, we look at that market and go, that's pretty good, otherwise not right.

Little project. Now, one thing to do is to keep the project short and by keeping it short, great things happen. Let's say you have a check-in meeting, once a week on that project. So now the project gets delayed for some reason or said, it takes a couple of months or whatever any project could go on for a while, the check-in meeting, the status meeting and the status reporting, say we have status reporting also. So somebody has to write up a little status report. How are we doing on our project? And they write that up and they publish it every week to the people on the project. Oh, but they also have to publish it to senior management, including people who are just kind of interested or who don't want to feel left out or whatever it happens to be. And so now a bunch of stuff starts to happen and encourages parasitism. One is the meeting itself becomes more important than the job, so whether we're making progress, it's also becomes easier, it's easier to attend a meeting than it is to accomplish the goal.

Why? Because attending a meeting just requires showing up at a meeting, whereas accomplishing the goal, it requires doing the unknown. After all, if it's known, we wouldn't have a project around it. Projects are only built to address the unknown, so the unknown is scary and uncertain, so why do scary and uncertain one when you can do the certain.

Thirdly, you offer an opportunity for somebody to play holier than thou. You were one minute late for the meeting, Corey, isn't punctuality important to you? So now things like punctuality, which of course are important, become more important than actually achieving the mission. So you get this thing that happens with standing meetings where officious parasitically inclined individuals. So maybe they might've just had that in their upbringing, that they're kind of more comfortable or when everything is super structured and mom and dad are in charge and that kind of stuff.

That meeting becomes a new entity, it's like having a new employee in your company, that meeting, is it like a demon employee that you didn't hire carefully, that you can't figure out how to fire. Like, how do you stop having this stupid bidding? So my approach is just to say, no, no, you can't put meetings on the calendar on a regular basis, you can hold a beating. The only people allowed to add a beating or people who are going to contribute, actually make something happen, but you can't have next week, same time, right? You and I have this particular meeting that we try to do on Tuesday mornings, but that meetings outside the company, not inside and we abandon it on a regular basis when we have other things to do. It just turns out.

So that's part of it is no standing meetings and this is considered anathema, right? I don't have an executive staff meeting that we have every week. We do try to get together and talk strategy, maybe on a more regular basis that I'm comfortable with, but that's about it. And so the second thing is, and this is really big. Email is the vector. Maybe even email is the medium in which parasites thrive. And it's for a very simple reason, actually for two reasons. One is, it's very easy to use email for politics, everybody knows this, I'm not saying anything new to anybody, right? Email is a wonderfully political instrument because you can copy people on an email or worse blind copy them if you're a well parasite, and you can do it for the purpose of pointing fingers, laying blame somewhere, setting somebody up for a fall, making it perfectly clear that you're doing your job, but maybe they're not doing theirs, whatever, right?

So all you have to do is copy a few of the right people, and then you have the right tone in an email, in a way you go and you look better and the other people look worse. So that's a common parasitic track and you see it all the time. Well, what can you do about that? Since email is necessary for internal communication, although some companies have banned it, so maybe they just are doing something so brilliant that all it can do is worship them and that, but they might replace it with something else. The other thing is text-based communication. It comes with a default emotional interpretation, that's negative. So when you read an email and its tone is neutral, your emotional reaction will be slightly negative. You will see, even a completely benign email that's just neutral as critical of you or potentially critical of you.

The reason for that is simple, because email can be used politically, it can be copied to people, secretly or openly. You're having a conversation with folks you haven't agreed to a conversation with as a recipient, that is they know that you're reading what it is that you're reading, and you're interpreting that simply. What do I think about this? But what do others think of me because of what's in this email.

And so... BDM that's right for political exploitation, and parasites operate primarily through intra inside the company politics. So my rule is simple. You're not allowed to copy somebody in an email unless you can prove, and the burden of proof is on you, that they needed that information to do their job. And if you were wondering about whether that's true or not, call them and ask whether they want to be copied on the email, tell them what it's about and see whether they want to be copied because they could say yes because they need that information to do their job, but it's your call as the email creator, and you're answerable to the company, that would be me. And I fire people on the first offense, I tell them this in the interview process...

Corey (24:44):

[crosstalk 00:24:44] ego-driven activities of parasites. So this is your first parasite theory of market dominance driven companies, is that you got to get the politics out of business, is what I hear you saying. And that is core with understanding that the alignment more so than even talent or capability, but alignment is key, right? Summarize that.

Chris (25:08):

Yeah. Alignment is key in terms of your hiring. Talent is key in terms of the contribution they're going to make, you can hire untalented people all day long, you get nothing. I see you really are trying to hire folks who are obviously talented, that's not actually very hard to figure out. Obvious, talent is obvious, but to completely avoid the parasites, you've got to check the alignment process carefully through your hiring process, and that means your interviews need to probe and go deep and they need to go deep into what was this person really like? And specifically, what have they done in the past? They have done that. What their teams have done? And does it hold up to scrutiny and how did they go about their business that doesn't hold up to scrutiny?

But on the design side, you can actually design a business to be robust against parasites by, from my standpoint, avoiding two things. One is where the parasites thrive in terms of I'll call it time, and the time that's dedicated to meetings, to standing meetings, which grows essentially to fill the calendar and grows to fill these status emails forever. You just design that out. So we don't have those standing meetings and we'll just live with that and miss a meeting needs to be called. Somebody can call they are meeting and that's one meeting, and then it's over. All meetings are sunsetted after their first occurrence, so that's kind of, yeah... And they live for one, whatever, one hour, half hour, one day, whatever.

And then the other is that the medium, we call it the medium in space and communication space that breeds parasites is email. And you simply forbid copying folks on emails, unless you can prove they needed the information to do their job. And no [inaudible 00:26:52] seeing if anybody was at a company, there's no reason ever to blind copy anybody within a company except, to advance your political agenda, secretly. So if you do that, you're dead meat. And that's kind of it though, those are two simple design principles.