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Turning Mistakes into a Business Model [Podcast]

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Most of us want to have a perfect business model out of the gate, but that’s a pie-in-the-sky attitude. As much as we all want to avoid mistakes in business, they’re pretty much inevitable. Everybody makes them, and many try to hide those mistakes because they’re worried they’ll be judged for them.

But what a lot of people don’t realize is that in business, there are often happy accidents that lead to a successful business model. In fact, one could argue that mistakes are the lifeblood of a strong business. And those who are willing to admit to their mistakes and pivot are the ones who can turn a blunder into a boon.

Our Guest: Executive Talent Acquisition Expert George McGehrin

On the #WorkTrends podcast, I got to chat with George McGehrin, a man who managed to turn a mistake into a national executive search/recruiting firm–one that has been successful for two decades. For years, people asked George for job search and recruiting assistance, and he said he couldn’t help. Then one day, he decided to try. Suddenly, there was a seven-figure business involving recruiting, coaching, and more. Since then, he has been widely featured on podcasts including Money Matters, Moving Up, and The Entrepreneur’s MBA.

I had to know: How can a mistake like that turn into a great business model? The secret to success, George says, is listening.

“You have to be open to listening to what people are asking you over and over, what their needs are,” George says. “The fifth time someone asks you for something, go ahead and say, ‘Yeah. This is what we charge.’ And you’ll be surprised at what comes of it.”

George says that in order to have a good business model, you have to be financially prepared for anything–even COVID-19. He says that business is a cyclical experience, so any business owner should expect to go through ups and downs.

“A lot of times it comes down to money. Do you have enough to withstand challenges?” George says. “If you’re a business owner, you can’t spend every dollar you make. Or if you work for somebody and you only have one source of income, you need to make sure that you allocate your money properly for a rainy day.”

To Succeed: Test, Fail, and Try Again

Once you’ve turned a mistake into a great business, there are ways to make sure your business model is successful. So what are the key actions to take?

First off: Test everything.

“If you’re going to send one email out to somebody or to a group of people, maybe send out two emails with different language,” George says. You should always be willing to adapt and try new things to get better results. 

Secondly, don’t be afraid to fail–and keep going.

“At the end of the day, the more times that you fail, you’re a little closer to winning, right?” George says. “First timers, when they’re starting a business, they say, ‘Oh, it didn’t work. I reached out to 30 people and no one got back to me.’ They need to expect to hear a lot of nos and keep going.”

And finally, while you should be willing to hear nos from potential customers or clients, you also should be ready to say no to opportunities. You shouldn’t expect to do everything by yourself as a business owner, but rather, give tasks to your employees and trust them to come through.

“You have to know what your strong points are. People who do well focus on one or two things that they’re really good at. And they delegate everything else,” George says.

I hope you enjoy this episode of #WorkTrends. You can learn more about how to push through challenges to create a successful business model by connecting with George McGehrin on LinkedIn.

Stop Hiring Based on Intuition: 4 Proven Steps to Better Selection

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Unstructured interviews are wildly ineffective at predicting future performance. Yet casual conversations, gut instinct and feelings are the ubiquitous means for assessing talent in today’s competitive marketplace, even at the highest levels of the Fortune 500.

In fact, over the past several years as an executive search consultant, only two clients, prior to working with us, had interview processes in place that were deliberately designed to limit natural biases and intuition. Instead, the overwhelming majority leverage the unsophisticated and futile assessment methods of generations past: laissez-faire conversations, brain teasers, work experiences and references.

The reasons for adopting such archaic approaches are multifold. First, most hiring managers and recruitment professionals have never experienced or been taught a better way. Applying a more standardized approach could be seen as minimizing the autonomy of the interviewer. Most of us think we’re great at interviewing, so we don’t see a need for change on that front. And many companies often view rigorous interview methods as antithetical to their friendly and inviting culture — they’re afraid to scare a top candidate away.

Science has the answers to these conundrums. Indeed, the evidence is overwhelming: Other than work samples and cognitive ability (IQ) tests, structured interviews are far and away the best means for predicting the future performance of your candidates.

The challenge, then, is how to begin implementing this proven yet unfamiliar process. The good news is that it’s not as complicated as it might sound. Here are four steps to get you started:

Summarize What Candidates Can Expect

As the candidate enters the room, ensure unplanned small talk is kept to a minimum. Any improvised forays into one’s personal interests can unconsciously lead to biases early on in the process. Instead, warmly introduce yourself, define the role, list the key competencies and explain how the interview questions will be structured. Be sure to let them know how long the interview will last, how many questions you’ll be asking and how you’ll be scoring each candidate. Also, point out that you’ll be taking notes so they don’t get distracted by it after a tough question.

Inform interviewees that the reason for such formality is to ensure every candidate has the same experience. If there are no questions on process, it’s time to begin.

Ask the Same Job-Related Questions in the Same Order

Because you’re hiring for a well-defined role, determine which competencies are the most critical for success. Then, draft seven to 10 thought-provoking, open-ended questions that test for these attributes.

For example, to test for one’s ability to persuade and build unanimity among stakeholders, the interviewers might first ask a broad question: “Tell me about a time you had to use your presentation skills to influence someone’s opinion.” Dive deeper with follow-up questions: “How did you prepare for the presentation?” “What was the desired outcome, and what points did you emphasize to drive home your proposition?” “What was the result?” “What did you learn from that experience, and what could you have done differently?”

To ensure consistency throughout each candidate’s experience, it’s imperative that both the baseline questions and the follow-up questions are preplanned and delivered in the same order.

Maintain Consistent Interviewers and Clearly Defined Rating Scales

Naturally, no interviewer rates the same way. Despite every attempt to minimize biases, we’re all susceptible to unconscious influences. In order to ensure that each candidate is scored equitably, there should be a consistent set of interviewers. Ideally, there should be no more than four interviews in total, and interviews should be conducted by a well-trained and diverse group of colleagues: a peer, a boss, a subordinate and a cross-functional neutral party.

Interviewers should rate candidate responses using a cohesive scale. For example, at my executive search firm, we use a rating scale of 1 to 5. The ratings represent “awareness,” “basic,” “intermediate,” “advanced” and “expert,” respectively.

But it’s not enough to simply give each level a general label. You should also leverage existing subject-matter experts in that role — or the hiring manager if it’s a new position — to define what specific behaviors should be displayed at each level.

For instance, if you’re assessing the candidate’s ability to empathize with a broad set of stakeholders, you might define “awareness” as “occasionally attempts to create a safe environment for asking questions and sharing outcomes.” A score of 5, or “expert,” on the other hand, might be defined as “considers the needs and emotions of others and the constraints of the circumstances when considering a course of action.”

The key is specificity. The clearer you are in defining ideal behaviors at each level, the less ambiguity and variance the interviewers will face.

Rate Candidates Immediately After Interviews

Many of us can’t remember what we did yesterday. How much more difficult is it to recall a detailed response to an interview question hours after it was given? It’s nearly impossible!

This is why it’s important that interviewers score candidates immediately after they leave the room. In your notes on each question, be sure to include actual examples given by the candidate and why that justified their final score. These notes will be crucial for discussing candidates — and breaking any ties between them.

Finally, each interviewer should give final scores to all candidates, and the candidate with the top scores among the four interviewers should be selected.

That’s it! This simple, structured interviewing approach will revolutionize your ability to predict the future performance of your next hire. Plus, because each candidate feels like he or she is on equal playing ground throughout the assessment process, his or her overall experience with your brand will improve and your Net Promoter Scores will soar.