Communitech Blog

Photo courtesy of Lyssa Nielsen of Angel Stone Photography.

Christian Zabbal of ghSMART and Ray Simonson of Software Innovation are tag-team presenting.

Christian is talking about how to get the best talent. He has some very interesting statistics:

• Only one in three hires will turn out to be a good fit.
• The average cost of a mistake is about $1.5 million per bad hire.
• Shareholder returns for top talent practices average 22% over industry means.
• The top 3% of salespeople produce up to 250% more than average.
• The top 3% of programmers produce 1200% more lines of code than average.

He suggests that most hiring approaches essentially suck.

He advocates using a scorecard system that is forward looking; concerned with what you will do as opposed to what you’ve already done. For example, “grow revenue from $25m to $50m by 12/31/09 (25% growth)” instead of “10 years sales experience”. No more than five to eight specifics.

He is walking us through the Topgrading process, which ghSMART promotes. This is probably not directly applicable to very small startups, but will become more critical as the company grows.

The process entails a detailed interview that goes back to every job over the past 15 years. I’m old enough to have that long a career (longer actually) but I’m pretty sure than many in the room don’t come anywhere near that. In fact, many people in the room were probably in elementary school 15 years ago. At any rate, I have excellent recall and I’m not sure I’d remember the details of every job I’ve had in the past 15 years. Ray says that he isn’t very diplomatic and doesn’t listen well.

Ray is presenting now. He is talking about how efficient and accurate the Topgrading interview process was for him. He doesn’t have a scorecard yet, but will by the end of the day. He suggests that excellent people recognize other excellent people.

Ray is much more open to questions and a discussion, rather than a presentation. The discussion seems to be centred on the hiring process and how to hire the best people.

Ray does make a point that I particularly appreciate. He suggests that he doesn’t care about fixing a person’s weaknesses; that’s a big company thought process. He hires people to do what he needs done, in other words for their strengths. He hires different people to do the stuff they can’t do.

Ah. Someone asked Ray about his favorite and least favorite parts of being an entrepreneur. He’s relating a tale partnering with IBM to try to sell a system to a company in Australia. Unfortunately though, out time is up.

Ray does say that if he was going to do something else he might want to be a jet fighter pilot.

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