Guess Who Doesn’t Fit In at Work – by Lauren A. Rivera

 ACROSS cultures and industries, managers strongly prize “cultural fit” — the idea that the best employees are like-minded. One recent survey found that more than 80 percent of employers worldwide named cultural fit as a top hiring priority.

When done carefully, selecting new workers this way can make organizations more productive and profitable. But cultural fit has morphed into a far more nebulous and potentially dangerous concept. It has shifted from systematic analysis of who will thrive in a given workplace to snap judgments by managers about who they’d rather hang out with. In the process, fit has become a catchall used to justify hiring people who are similar to decision makers and rejecting people who are not.

The concept of fit first gained traction in the 1980s. The original idea was that if companies hired individuals whose personalities and values — and not just their skills — meshed with an organization’s strategy, workers would feel more attached to their jobs, work harder and stay longer. For Southwest Airlines, screening job candidates based on their willingness to provide a wacky experience for strangers contributed to the fun environment that enabled the company’s financial success. Likewise, for the investment firmBridgewater Associates, which seeks to distinguish itself through its pursuit of transparency and honesty, screening out potential hires who couldn’t handle criticism made good business sense.

But in many organizations, fit has gone rogue. I saw this firsthand while researching the hiring practices of the country’s top investment banks, management consultancies and law firms. I interviewed 120 decision makers and spent nine months observing the recruiting practices of one firm in particular. The professionals I spoke with, who were charged with reviewing applications and conducting interviews, consistently underscored the importance of cultural fit in hiring. While résumés (and connections) influenced which applicants made it into the interview room, interviewers’ perceptions of fit strongly shaped who walked out with job offers.

Crucially, though, for these gatekeepers, fit was not about a match with organizational values. It was about personal fit. In these time- and team-intensive jobs, professionals at all levels of seniority reported wanting to hire people with whom they enjoyed hanging out and could foresee developing close relationships with. Fit was different from the ability to get along with clients. Fundamentally, it was about interviewers’ personal enjoyment and fun. Many, like one manager at a consulting firm, believed that “when it’s done right, work is play.”

To judge fit, interviewers commonly relied on chemistry. “The best way I could describe it,” one member of a law firm’s hiring committee told me, “is like if you were on a date. You kind of know when there’s a match.” Many used the “airport test.” As a managing director at an investment bank put it, “Would I want to be stuck in an airport in Minneapolis in a snowstorm with them?”

Selecting new employees based on personal similarities is by no means unique to banking, consulting or law; it has become a common feature of American corporate culture. Employers routinely ask job applicants about their hobbies and what they like to do for fun, while a complementary self-help industry informs white-collar job seekers that chemistry, not qualifications, will win them an offer.

Although diversity in many industries has increased in recent decades, progress in the corporate realm has been slower than expected. Selection based on personal fit can keep demographic and cultural diversity low. In the elite firms I studied, the types of shared experiences associated with fit typically required large investments of time and money.

Class-biased definitions of fit are one reason investment banks, management consulting firms and law firms are dominated by people from the highest socioeconomic backgrounds. Also, whether the industry is finance, high-tech or fashion, a good fit in most American corporations still tends to be stereotypically masculine. Consequently, fit can exclude high-performing candidates — female or male — who are more stereotypically feminine.

Some may wonder, “Don’t similar people work better together?” Yes and no. For jobs involving complex decisions and creativity, more diverse teams outperform less diverse ones. Too much similarity can lead to teams that are overconfident, ignore vital information and make poor (or even unethical) decisions.

Perhaps most important, it is easy to mistake rapport for skill. Just as they erroneously believe that they can accurately tell when someone is lying, people tend to be overly confident in their ability to spot talent. Unstructured interviews, which are the most popular hiring tools for American managers and the primary way they judge fit, are notoriouslypoor predictors of job performance.

Fit can work, but personal similarity is not the key. Organizations that use cultural fit for competitive advantage tend to favor concrete tools like surveys and structured interviews that systematically test behaviors associated with increased performance and employee retention. For managers who want to use cultural fit in a more productive way, I have several suggestions.

First, communicate a clear and consistent idea of what the organization’s culture is (and is not) to potential employees. Second, make sure the definition of cultural fit is closely aligned with business goals. Ideally, fit should be based on data-driven analysis of what types of values, traits and behaviors actually predict on-the-job success. Third, create formal procedures like checklists for measuring fit, so that assessment is not left up to the eyes (and extracurriculars) of the beholder.

Finally, consider putting concrete limits on how much fit can sway hiring. Many organizations tell interviewers what to look for but provide little guidance about how to weigh these different qualities. Left to their own devices, interviewers often define merit in their own image.

Wanting to work with people like ourselves is not new. In the past, employers overtly restricted job opportunities based on sex, race and religion, which is now illegal. But cultural fit has become a new form of discrimination that keeps demographic and cultural diversity down, all in the name of employee enjoyment and fun.

Advertisements

Encourage Your Employees to Talk About Other Job Offers – by Reid Hoffman, Ben Casnocha and Chris Yeh

Why can’t employees speak honestly about their career goals with their managers? It’s because of the reasonable belief that doing so is risky and career-limiting if the employee’s aspirations do not perfectly match up with the manager’s existing views and time horizons. It seems safer to wait until another job offer is in hand, so that if one’s manager reacts badly to one’s ideas, there’s no danger of being passed over for on-going professional development, or worse, left unemployed. It’s a self-fulfilling prophecy: once an employee has gone far down the road with another potential employer, it’s hard for her to maintain a positive relationship with her current company.

Neither manager nor employee necessarily wants the current employment relationship to end, but because of the lack of trust and honesty, that’s precisely what becomes likely to happen with talented employees.

If you want to forge a high-trust alliance with your workforce, take a page from a popular clause in founder employment agreements — the “Right Of First Refusal” (ROFR). When a founder wants to sell stock in the company and has an offer to purchase some or all of the shares, the company has the right to exercise its ROFR and buy the stock at the offered price. This compromise reassures the founder (or employee) that the company can’t block the sale of stock while allowing the company to make sure it isn’t saddled with investors it doesn’t want.

We believe that an equivalent compromise can help improve the employer-employee relationship: the “Right of First Conversation” (ROFC). If an employee decides she wants to explore other career options, she commits to talking with her current manager first, so that the company, if it so desires, has the opportunity to define a more appealing job or role. This doesn’t mean that the employee informs her manager every time she receives a call from a headhunter—this kind of disclosure would be onerous for both employee and manager. Rather, the employee should initiate a conversation when she is seriously considering alternate job offers or career paths. Similarly, the employee should also approach the manager if she felt strongly that her current tour of duty no longer fits, and that without a change, she would feel obligated to start looking for another employer.

As with other aspects of the employer-employee alliance, the ROFC isn’t a binding legal contract. It’s an understanding between manager and employee that carries moral weight if violated.

Because the employer typically holds the power in the relationship, it’s up to the company to take the first step towards building the necessary trust. Managers need to say, “We don’t fire people for talking honestly about their career goals,” and truly mean it. Once employees believe that the company will live up to those words, managers can point out the benefits to the employee of granting them the Right of First Conversation.

First, an employee can benefit from frank career advice from a manager on specific industry opportunities. In a high trust relationship, a manager will not reactively denigrate competitors or “say anything” to keep an employee.

Second, perhaps the current company can upgrade the quality of the employee’s existing tour of duty. An employee who provides advance notice allows the company the time necessary to explore and develop more possible options and offers. If the company has weeks to match or exceed an offer from a rival, it has a much better chance of pulling together a counter than if it only had twenty-four hours to respond.

Finally, even if the company can’t present a compelling counter or the employee chooses to switch firms, the ROFC helps preserve the long-term relationship. The split can be made amicably, and on a timetable that works for both parties, honoring the mutual obligations and investment they have made in each other.

As a manager, would you rather manage a planned separation from an employee who has completed her final tour of duty? Or would you rather scramble to perform damage control on a sudden departure?

As an employee, would you rather depart amicably and become a valued member of the company’s alumni network? Or would you prefer to depart under a cloud of acrimony?

The Right of First Conversation represents a major departure from business as usual, but that’s precisely the point. The lack of trust between employer and employee is costing both parties. Adopting the ROFC helps both parties build trust and a longer, more fruitful relationship.

80-Reid_Hoffman

Reid Hoffman is cofounder and Executive Chairman of LinkedIn, the world’s largest professional network, and partner at the Silicon Valley venture capital firm Greylock. He is a co-author of The Alliance: Managing Talent in the Networked Age.

 

80-Casnocha_Ben

Ben Casnocha is an award-winning entrepreneur and bestselling co-author, with Reid Hoffman, of The Start-up of You. He is a frequent speaker on talent management, and is a co-author of The Alliance: Managing Talent in the Networked Age.

 

80-Yeh_Chris

Chris Yeh is an entrepreneur, writer, and mentor. He helps interesting people do interesting things as VP of Marketing at PBworks and general partner at Wasabi Ventures. He is a co-author of The Alliance: Managing Talent in the Networked Age.

How Millennials Think, and What To Do About It – by Brian Halligan

You can gripe about Gen Y all you want. But if you can’t attract them, you’re going to lose the war for talent.

shutterstock images

During the last month, hundreds of thousands of our nation’s college graduates have proudly crossed the chasm between college and the working world. With 21.9 million Americans either unemployed or underemployed and plenty of doting parents, mentors, and siblings dispensing advice on what they should and shouldn’t do, I thought I’d take the road less traveled. I propose we spend less time debating whether Millennials are slackers or savants and focus instead on how we as entrepreneurs and business leaders can adapt our companies to attract millennials. The way in which people work has changed forever, and those of us who don’t adapt will be left in the dust when competing for top talent.

The problem we OWGs (Old White Guys–that’s what they call us) have is that we built our companies’ cultures around the things that motivated our generation: money, career progression, and retirement plans. The Millennial generation has an entirely different consideration set for motivation, and given that they already comprise more of the workforce than GenXers and Baby Boomers, we need to invest time, money, and energy into creating workplaces that Millennial employees will love.

Here are a few considerations that I hope will help each of us to design and deliver a workplace that fits the way employees operate in the 21st century, and which will allow us to attract, connect, engage, and delight Millennial workers and optimize our company cultures for productivity, engagement, and results:

Money vs. Mission

What we wanted: When most of us graduated from college, we wanted a steady job that paid well.

What they want: This new crop of employees is far more motivated by their mission than by the money they make. They want to transform a broken industry, save the planet, feed the starving, etc.

What to do: If your mission this year is to improve earnings by 5% by either gouging your customers or gouging the planet, that’s just not going to get it done with the Millennials. Think again.

OCD v. ADD

What we did: Our generation worked diligently for our boss in hopes of being tapped on the shoulder one day to move up the next step on the almighty ladder. We typically stayed at a company for more than seven years. If we had a collective psychological condition, it would be OCD.

What they do: This new generation works diligently in hopes of learning as much as possible and moving on to the next challenging project. They typically stay at a company for 1.5 years. If they had a collective psychological condition, it would be ADD.

What to do: Lean into the ADD by creating formal rotation programs, innovative leading-edge training programs like the one at Zappos, and work environments that leverage social media interactions instead of discouraging them, and you’ll see these Millennials become just as loyal as we were “back in the day.”

Place v. Idea

How we thought: We thought of the office a place you went from 9am to 6pm, had four grey walls, and was someplace you took vacation from three weeks out of the year.

What they think: For the new generation, the office is an “idea” that you work at whatever hours seem natural, wherever you are the most productive. The idea of vacation is (unfortunately) antiquated when you are carrying around a phone with more power than the Apollo space mission had.

What to do: Get rid of all offices, including yours, and let everyone work in an open space to foster collaboration. Get rid of any rules around hours in the office (except for call centers and stuff like that), and eliminate your antiquated vacation policy. Let them take “vacation” whenever they want.

Rules v. Judgment

How we learnedIn our day, we were handed a guidebook on our first day on the job and told to read it. The rules punished the many for the mistakes of the few.

How they learn: These Millennials don’t like rules. They have an unquenchable desire to be treated like adults.

What to do: Throw out your employee handbook and start from scratch. Replace as many rules as possible with this simple guideline: “Use good judgment.”

Only 30% of the Fortune 1000 companies in 2003 will remain on the list in 2013. Why? Well, it turns out that we really are living in an age of massive change – it’s not just a platitude. If your company can transform the way it operates to match the way these new workers think, live, and work, you will reap the rewards. If your company is stuck in the ‘90’s and doesn’t make the shift, you will have to deal with a continuing rotating door of Millennial employees.

_________________________________________________________________________

Brian Halligan is CEO & Co-Founder of HubSpot, a marketing software company that helps businesses transform the way they market their products by “getting found” on the internet. Since its founding, HubSpot has already accumulated 5,000 customers. He is author of Marketing Lessons From the Grateful Dead and Inbound Marketing: Get Found Using Google, Social Media, and Blogs , which is in its seventh printing, has sold 40,000 copies. Brian was named an Ernst & Young Entrepreneur Of The Year 2011. He is also an Entrepreneur-In-Residence at MIT.