EP 99: How to leverage behavioral assessments for effective hiring. Employee engagement and retention. Early growth-stage focus.

James Mackey: 0:18

Hello, welcome to The Breakthrough Hiring Show. I'm your host, James Mackey, very excited to be here with you today, and our guest, Erick Gydesen. Eric, thank you for joining us today. 

 

Erick Gydesen: 0:27

Thank you, James, it's nice to be here. 

 

James Mackey: 0:30

Yes, I really am pumped for the topics that we're going to be sharing with everyone. A really good conversation and a lot of good takeaways for talent strategy. So, before our audience jumps into the topics we've discussed, I would love it if you could provide a quick background on who you are. 

 

Erick Gydesen: 0:48

Yeah, absolutely. Thank you for having me. It's always fun getting a chat with you, James, so this should be a good one. Yeah, I'm based in San Diego, California. We run a company that purchases homes and either flips those houses or renovates them, does development, and a bunch of stuff on the real estate side syndications And we've come a long way, man. It's been a lot of fun. We currently now have over 100 team members, so we're starting to get up there in size, and I have the privilege of being able to sit in a role that oversees and works with the recruiting department heavily, and so I think, out of the 100 people or so that work here, I've probably been through that hiring decision on at least 95% of them. So hopefully today we can talk about what I've gone through and what we've learned along the way And hopefully bring some value to your audience. I'm really excited to go through that. 

 

James Mackey: 1:41

For sure, and what I'm most excited about today is that you're bringing that chief operating officer perspective to the table, and I think it's really important to bring different perspectives. Like we'll have CEOs, coos, chief people officers, and heads of talent acquisition, and what's really fun about today's episode two is we are going to be talking about how to build a really effective structure and interview process to consistently hire players, but we're also diving into several different people app topics, right, which, on this show, what I think is really cool is like everything is there's like a two-way causal relationship, right. Like what we do in talent acquisition is going to impact our people's operations. What we do in people operations is going to directly impact the quality of our town acquisition, and they're just so tied to the hip and both so important that on today's episode, we're actually going to be diving into both. So let's go ahead and jump into it. I'm looking forward to it. 

 

Erick Gydesen: 2:32

Let's do it. 

 

James Mackey: 2:34

I think, just to kick us off, we wanted to talk a little bit about how your company goes about making decisions, possibly a little bit differently, and leveraging behavioral assessments. I think that that could be a really good place to start, so I'd love to just hear from you how your team is currently leveraging behavioral assessments and how you might be doing things that are a bit different from your competitors out there in the market. 

 

Erick Gydesen: 2:57

Yeah, that's a great starting point. I think it's what gives us the secret sauce in our business. We've come a long way, right? So when we started off with the business, we were hiring anyone that would join the organization more or less right. We'd do somebody that is looking for a role in sales, looking for a role in the administration, like, hey, let's give them a shot. I've heard good things, right? And that's where the hiring process started for us just bringing people in and seeing if they worked. And you know how well that goes. Some of it kind of works out, but a lot of it doesn't. And you start to learn from those decisions And you look back afterward and you evaluate well, where did we go wrong here? And that led us on this journey of trying to figure out what makes a successful hire. We knew interviewing questions were important. We knew that resumes were important, but we realized there was a missing piece. What was that thing that would make someone successful and someone not? Because we'd have some people come in with great resumes. We'd interview them, they sounded great, we'd like them, they liked us, and then all of a sudden, performance would fall off almost immediately, or sometimes it'd fall off six months into it. And so those are the questions that started this journey for us trying to understand how do we hire the right people that are going to be successful, hopefully out of the gates and also, long term, stay with us. In that process, we started tinkering with different behavioral assessments.

 

I know the first one that I had been tinkering with was the Myers-Briggs type indicator. I'd taken it before. I thought it was interesting and fascinating that I could answer a handful of questions that would give some type of semblance of who I was as a person, either personally or in the professional world. And I found it to be fascinating. I went down this rabbit hole, and started doing a bunch of big data analysis on OK in sales organizations, what profile types within the MBTI seem to be successful, and that's where it kind of started along the way. We started getting introduced to different behavioral assessments and if you fast forward to where we're at now, we go through six different assessments in placing roles, depending on what that role is, not the entire portion of our hiring process. It's a small portion, right? We're looking at this as almost a check and balance to what we're hearing in interviews, what we're seeing on resumes, and what we're getting from references, and this has allowed our success rate on hires to go above 90%.

 

Our retention is very low. We're sub 10% on attrition annually. I think last year we were close to 5%. So very, very low and I think the people that are working with us are very happy And we believe that they're in the right seats. The assessment itself is what for us is we've been able to figure out to a degree is you know, everyone has these talents There are amazing different talents. Every person that you interview could be very successful somewhere. It's a matter of does the job role that you have fit what they can be very successful in because that's what they want to do with their time. That's what. That's where their motivations and their drives are telling them they should be doing, and if you find that job aligning that fit, what people in those roles are going to excel? And that's what we've kind of figured out. 

 

James Mackey: 6:11

Yeah, for sure, I mean everybody has different strengths, and being able to match those up and understand nuance, right? I mean I think some traits and strengths are things that you're looking for company-wide, right? You're looking for a certain transfer for all employees based on the environment. And then it's like segmenting within that right, thinking about on a departmental level as you know which type of folks are going to thrive. Is it more so like them, and maybe emotional intelligence, communication is going to be more important in some cases, and in other cases, you really need somebody who's a lot more analytical and process driven, right?

 

So it's interesting. I mean, one of the things that I've been thinking about lately is also just like segmenting, not only based on, like, personality and fit from the perspective of what we're discussing on behavioral interviews, but it's having a balance of folks that have done like 100% of the role, that come in to provide like high-level expertise, and then, you know, having some folks that have done 75% of the role, that are really ambitious and bringing that new creative element to, to growing into their role. So you know, this is actually something I've been giving a lot of thought about lately.

 

I guess my one follow-up question is, on getting back to behavioral assessments, where do you place that in your interview process? Is this like? Do you do it at the top of the funnel? Do you do it after, like the hiring manager screen? Because it's a balancing act? right, because you want to make sure the candidates are sold on the opportunity. What do you do? What's the best time to have these things done? 

 

Erick Gydesen: 7:45

Yeah, for us, we space them out a little bit So it doesn't happen all at once. It's like here, here's six of them all at once. We do have a handful that we will administer after an initial call, either with our recruiter or a hiring manager. Now, initial calls and to get through some of the specifics We've looked at resumes, we looked at availability, we've looked at commute times, what people are looking for. We're going to find some matches there. At that point in time We'll administer the first round of them, go through initial interviews, oftentimes second interviews, and we'll even have some assessments in the back end that we're confirming and what we're seeing in the rest of the interview process. So we, we, we, we space them out, but they're definitely coming after an initial call and assessment. 

 

James Mackey: 8:27

Well, so, that's and that's interesting. Usually, for a lot of my customers, and companies I work with, I will advise against it after the first round screening call because I'll see, you know, we'll see significant fall off from candidates not completing it. So I'm curious to learn more about your experience and kind of optimize that if you've seen a fall off, or if you haven't, what have you possibly? Have you done something specifically where you are maintaining engagement with the candidates so they feel comfortable? I've seen some companies do the worst, like would they do it before, like even a screening call, right? So again, every environment's different, and so what I just said is a generalization. What I would love to learn is how and why do you think it works for your company, and then maybe there is some kind of tip you have to help keep candidates engaged during these types of assessments. 

 

 

Erick Gydesen: 9:21

Yeah, yeah, no, absolutely. You know, for us we understand that candidates' time is very important And so having that initial phone call, even if it's 10, 15 minutes, going through some of the basics of the role, getting them excited and sold on going through the process, is that first step. And we don't want to have someone, we don't want to waste someone's time and have them start this huge interview process out of the gate. It's not going to work right? So we'll make that initial call, but that initial call also works as a time for us to, you know, set expectations. This is what the interview process is going to look like. This is what you can expect. Here's how to review. This is why it's beneficial, and also that time to you know, sell them to the company. And so I'd set the expectations and sell them to the company. It's worth it to go through this process. That's how we have a good conversion rate on the ones that we administer and the ones that we get back that are completed. And for us, we think of it as this is just part of our process. If someone's not interested enough to follow the process, they might not be interested enough and join our company, so we just see it as a reason that, hey, they're probably better off somewhere else. That's totally fine. We just go back to building out the top line of our funnel. 

 

James Mackey: 10:25

Right, And I think just how it's like how well organized your screening is, how many assets and content you might have available for them to look on in the website and whatnot, how accessible recruiters and hiring managers are to answer questions, and how communicative recruiters and hiring managers are too, just checking in. Hey, how are things going? Do you have a chance to look at this? Let me know if you have any questions or are really pumped to bring you on to the next stage, that kind of stuff. I think all of that kind of cultural nuance to putting people first and showing that you're really bought into their experience makes a big difference and probably is more important in terms of measuring the likelihood of conversion from an assessment than exactly where it's placed in the process. 

 

Erick Gydesen: 11:09

Yeah, I definitely agree with that. 

 

James Mackey: 11:11

Yeah, and so just kind of transitioning into when you're hiring right? So now you've built a structured hiring process, and you've identified specifically what works for your organization. What are your thoughts on keeping top performers engaged and retained? Any kind of lessons learned there that you could share with us? 

 

Erick Gydesen: 11:34

Yeah, So you can go through this entire process of finding and sourcing candidates, interviewing them, hiring them, onboarding them, getting them ramped up, getting them performing, and then getting them to this high level of performance. I think it's easy to then forget about them, right? You don't want to do that. It's probably one of the worst things you can do for your organization. We like to call it more evergreen mechanics. What are some of the things that we can be doing that are going to keep people around, not just for the next couple of years, but long term? How do we get someone to grow with this organization for life? Really, I mean, it could be 15, 20, 25, 30 years with our organization. How can we do that? So I think it comes down to a design element of making sure that we are designing programs within our organization that people want to sign up for, They want to commit their lives to. If it's not very, very attractive at some point they're going to leave and they're going to go somewhere else. There's going to be a grass screen or somewhere else for a day and they could just be gone. All that time, energy, effort, and relationship could go out the window. For our organization, we do something very unique. This is just one example, but we're in the home-buying space.

 

We're the largest home buyers in California. We'll purchase close to 500 homes this year. That's our business model. What we've realized is that's also the same thing most people that work for us want. They want to acquire real estate and they want to hold a portfolio and grow their assets. So we created the home buyer program, which allows performing team members to purchase homes at discounts from the company, utilizing company resources on acquisitions, construction, design, you name it. They can utilize these resources and build into their own portfolios. It's almost like your own stock option. This program is so powerful because someone could come into our organization, and do extremely well in their role. Let's say that they're in sales, come in here, do really really well, and make really good money. Then what for us is okay if you're interested, here's this program where you can basically build directly into a lot of equity, likely building into a lot of cash flow, even in our market here in Southern California, and start doing this year after year after year after year. Keep adding these assets to your portfolio.

 

So we spend an exorbitant amount of our resources making that happen for our organization. It's one of the things that I'm most proud of. I think we had 15 people, or 16 people in the last 12 months from our organization that have purchased homes through the company that we've been able to help out. It's game-changing, It's life-changing for most of the team members. That is just one of the things that we do to design this evergreen mechanics of allowing people to want to be here long-term. 

 

James Mackey: 14:14

Actually earlier today I had a podcast with Shauna, who is the senior VP of people for Talkdesk, a pretty big category-leading tech company. One of the things that she was talking about was the parallel between the ideal customer profile and the ideal candidate profile. She talked about how, just like for the ideal client profile, you're not going to have 20 of them, you're not going to have 20 different types of segmentations, market segmentations of different customers you're reaching out to. You're probably going to pick at most, a handful, maybe even just one Right, And you're going to dial in on serving that community and creating a great experience. And what she talked about was actually not a concept I had really thought about before.

 

I thought about an ideal candidate profile, but I haven't thought about having a unified, single ideal candidate profile. She said of course there are different skill sets and traits that might fall within different departments, but there needs to be one overarching candidate profile And you have to really understand that ideal candidate profile really, really well So you can find a way to create a value proposition for them. Not only are they going to be more effective as a company when hiring, but you're going to be able to create an opportunity that makes a lot of sense for the employer and the employee. And so I think, like this is actually like the key takeaway for folks right Tuning in, is you have to be so dialed into that ideal candidate profile that you can create engagement, retention programs that really appeal to that specific type of profile that you're bringing on to your team. So I think that that's you know. I really like that. I mean that makes sense as to why it's working and why you have a really low attrition rate in my opinion, but that's probably a big driver of that. 

 

Erick Gydesen: 15:54

Oh, yeah, absolutely. 

 

James Mackey: 15:55

Yeah for sure, I just love kind of riffing on lessons learned. What are some of the biggest lessons, or, the biggest things you've learned over the past few years, while you're growing this company at a rapid pace? 

 

Erick Gydesen: 16:24

Wow, there's a lot to dive into here. I think early on we're just trying to figure out our identity, and you're trying to do that in the time where the organization is a Wild West. So early on we realized that we needed to be surrounded by people that were really high in innovation, and we still are like that today. If we don't have high levels of innovation within the organization as just a characteristic, people need to want that. There are a lot of people out there that are fantastic team members that don't love innovation. They are much more process-oriented. I don't want to make any changes to anything. Let's not disrupt things. Let's the status quo is working for us. Let's stay put.

 

So early on, what happened is we had actually really great people that were hired, but their innovation and their ability to their risk tolerance, if you will, towards changing things were just lower. So that was a light bulb moment for us. It's like these people are fantastic. Unfortunately, where we're at right now, we're a small company. Our processes are not very dialed in yet. I can't give them the structure that they're looking for at this stage of the company, and so it's a light bulb moment in the beginning that when we are in kind of a Wild West moment for those that are listening, or maybe in a startup environment I would assess, for that I would find people that are a little bit more risk-tolerant. I'm sure. Naturally, intuitively, we understand this. However, it's really easy to say, oh, we need someone that's in administration, they're going to be really regimented, and what do you have? and you hire them and you're five people. That actually probably isn't your best decision because that person's going to have to deal with so much change. It's going to be really stressful for them, and so this is just one example.

 

One of the things that we figured out pretty early was we need to be around people that are going to be a little bit more innovative at the beginning. As that scales, you'll start to realize that you have deficiencies in different departments. You're looking at the top-line funnel. You have your town acquisition and recruiting. Then for us, we look at where our marketing is going, where our sales are going, and there are different departments and sales for us. From there, we're looking at a contract to close that client relationship with our home sellers, and then from there, it's project management, design, and construction. So there are all these different departments that will stack up in this funnel of our business, and so look at the value chain within your organization of how it flows from the department.

 

The next thing that we realize is that when you start to grow, you're going to get impacted in at least one of those areas as you're growing. Oftentimes there might be three of them at the same time, and the more that you can start to plan for that impact and higher in advance of that impact, the more successful you're going to be. Otherwise, you're going to get stuck in these moments or these plateaus where the systems are working, the people are good, you know, your customer acquisition costs are there, but then you're not growing and you're just and everyone's in this kind of frenzy. The reason that's happening is that one or more of your departments are getting impacted. Because we're not hiring in advance. People are beyond that 85, 90% capacity that they should be at on a day-to-day basis. I mean, if you get people past that percentage and you're adding more and more and more, you get stuck and you start to plateau. So that was the second aha moment for us was OK, we know that there are different characteristics throughout this process. Let's hire for those characteristics. The next thing is when we're growing, how can we start to forecast which departments can be impacted, and so we are pretty clear about that now in our organization, which allows us to get through, you know, the next six to 12 months of forecasting who we need to hire and what seats and what that position looks like. 

 

James Mackey: 20:08

So I suppose a lot of that conversation comes down to the overall company's objectives, right? Absolutely The strategic objectives of the organization, your North Star metrics that you're trying to build toward, and then thinking about how the culture traits need to evolve right Within, I suppose, specific departments as well. 

 

Erick Gydesen: 20:32

Yeah, no, absolutely. The vision is what's going to initiate and spark. It's going to be that catalyst for where we go right. And then it's that strategic breakdown of how we're going to do it, who's going to do it when we're going to do it, and what's going to be our secret sauce along the way that's going to allow us to have those levels of success that we're looking for. And then from there, it's a matter of implementing what those requirements would be, and I think that's difficult to do as you're growing an organization. There are so many different priorities, and it's one of those things where it's like you could have a brand new hire in an apartment that's been impacted and you're like, yes, they're going to solve this. But then you don't take a second to step back and be like wait, they actually are going to still have too much on their plate. We need to be hiring more than this, right? And then, once they hire this position in, let's say, we hired a recruiter on our team once that happens, well, what's going to happen next is then we're going to have all these people joining the organization. Who's going to be onboarding these people, right? What's our leadership going to look like? And then it's OK. Lead generation and marketing We've got to ramp this up too. Do we have enough people to then do that right? And so it's this domino effect that if you can get in front of it, you can keep those dominos upright and it'll go over much smoother. 

 

James Mackey: 21:50

Yeah, it's one of the things I've talked to a lot of chief operators about too. It's just getting back to anticipating future needs And they've said one of the challenges too is that the culture is going to evolve, your needs are going to evolve And sometimes the culture is going to evolve unintentionally. You hire a bunch of people and you realize, oh, this is a little different, it's a different vibe, a different culture than maybe what we had when we were half the size. So I think that it's also that's another reason to be very intentional about what you're building is that if you're not and, for instance, you're just going purely off skill set right Then, or experience right, relevancy of environments that people come from you might end up developing a culture that doesn't actually make sense for your business or that is ideal, yeah, and I think it's a mistake. 

 

Erick Gydesen: 22:43

We were victims of this mistake And we learned relatively quickly. But culture will change as you scale and hire. What happens is you won't be able to make every decision yourself as a business leader or a hiring manager. There are going to be times, in a certain amount of scale, where you might not be in every interview process. I try to be, but it's just not possible with schedules and how large organizations can get, and eventually, you will probably make a bad hire, and it's not that they're bad people or it's they're not skilled, it's just the alignment isn't there. And far too often I think a big mistake and it's something that happens to us when you have someone. That scary thing is when you have a good performer like they're really good at their role, but then they're not a culture fit, and then you allow them to exist within the organization. What will end up happening is, yeah, their production might be decent on paper, but unfortunately, they're probably bringing down the production of another handful of people that they associate with every day. It's actually costing your business a ton of money, and so sometimes you hire the wrong person and it's not the right culture fit, not the right alignment. They could be amazing in a different culture, but you have to cut it off, otherwise, it's going to bleed over and start to affect other people in the organization. 

 

James Mackey: 23:54

Right. I mean, in some cases that's definitely a case where they could be a really good person, but they're just not the right fit culturally. Other times it's like sometimes you're going to hire somebody who interviewed really well and they're just incredibly negative in the drain on the team. And sometimes previous employers are not. They don't feel comfortable providing references And somebody can just say, oh, it's against company policy, my prior employer, I can't get a reference. It's easy enough to say that And then you end up hiring somebody. That's just like messaging colleagues all day just complaining or just being kind of a negative drain. And the other thing that's really challenging about that type of situation is, you know, other top performers are not going to want to deal with that shit. No, they're, you know, they, they, they don't want to see that type of problem be rewarded within an organization, and so like. Again, there's, even if the performance is decent, so to speak, it has been my experience that I guess maybe in sales I've seen it a couple of times where somebody's like really, really good, but toxic. But I think in most cases, like most toxic people, just typically are not necessarily the best. They might be like hitting a goal or something, but they're not really value creators because, like part of it, at a growth stage, the company is being able to collaborate and work with others. 

 

Erick Gydesen: 25:20

Yeah, absolutely Yeah, I think you're right. I think it does find itself in the sales departments more frequently than others. 

 

James Mackey: 25:27

Yeah. 

 

Erick Gydesen: 25:28

Um, I think it's a really important point and this might be common knowledge but when you're interviewing right, everyone's going to show up in their best self, like they're going to bring their best presentation of who they are, And it's really easy to get misled during an interview If you don't have additional dots behind it, really mapping who this person is at their core. So another reason why we love these behavioral assessments is you go to an interview. There's so much subjectivity out there with an interview. How do I feel about this candidate? It's one of the worst ways to make a decision If you don't have any additional data points because, remember, every single candidate for the most part, is going to give you their very best performance for that 30 minutes, that hour, that two hour period, And it's hard to it's hard to make those assessments. That's why you hire someone. You think they're great performance could even be good, but then the culture is just not a fit. So it'll happen. 

 

James Mackey: 26:23

Well, you know, I think that one of the issues is that a lot of executives, I don't know, maybe we've all done this once or twice, but sometimes we confuse experience and knowledge data essentially with intuition And or, even worse, sometimes we feel like our intuitions are more likely to to to be right. I think you know, experience backed with data is an effective way to make a decision, and sometimes you don't have the most robust reports and access to data, particularly in a smaller organization that's growing quickly, and you have to leverage your historical knowledge on what's worked, and sometimes you have to go with intuition. I'm not saying intuition is a bad thing, but you know there's been a lot of studies out there that you know people's intuition when they're focusing on that as a primary way to make decisions, is not quite as accurate as they think it is. I think there's probably like you know hindsight fallacy theory, right? Where we kind of like to focus on one thing but kind of ignore other situations or don't remember situations where we get it wrong. There's also another name for it. It's like some kind of bias or something where you just notice one type of outcome or you feel like every time like yeah, I hit, I hit. I always hit red lights like, or something like that. We're because you're a reticulated, reticulated activating system right? 

 

Erick Gydesen: 27:45

You start thinking about a specific car that you're going to buy. You see, on the road everywhere. And then there's this form of that the RAS coupled with recency bias right, so whatever yeah yeah, whatever was most recent is that becomes narrative, right, and we're so quick to do that and really I mean we're, we're ingrained like that, I believe, as a species, as part of our survival are you know if you go down this dark cave and it doesn't turn out well for somebody you know recently, biases don't go down dark caves, right, it's just, it's. I think it's kind of hardwired. It's tough when you start to separate and kind of move fast forward into today's world. Um, I think we're blinded by things like recency, bias, and things that are atop the mind. Um, to go back to your point on intuition, intuition is, is and it's, in my opinion, one of the most important things that a hiring manager, a team member, or a leader can have within their business. You know we talked a lot about data and assessments earlier, but it's really, it's that combination of these two things You have to. You have to have both. I know this is going to allow for the best decision-making. You do have to trust your gut too. I think the point that we are trying to convey is if you can figure out a way to make it so it's not just your gut, or at least it's multiple people's gut, you're going to have a better outcome in the future. But that intuition is still so, so, so important. If you don't feel right about something, something's just not sitting right. There's usually a reason for it. You just might not be able to describe it to yourself. Yeah, I would deal with it. 

 

James Mackey: 29:17

I think it just depends too on the competency of the individual, like if you're a very seasoned executive that has been exposed to a lot of inductive reasoning and data and you've seen things play out over and over again so you can identify trends. I think that that's different versus you know, sometimes people have life experiences that work out or don't work out And, as a result, they can create biases and something could not feel right because they went down this one path and something bad happened. But it's not actually a causal relationship between going down that path and what happened, and so you create a false kind of you know reaction or a false association. And so it's. I think it's. It's like two if you're going to go with intuition. It's recognizing how really being careful and trying to recognize unconscious biases and really thinking about like well, why am I making this decision and why do I believe this? And I think, you know, one of the things, the philosophies or things that I try to remember most in life when I'm making decisions is, you know, in order to prove, to prove myself right. I should let myself try to prove myself wrong, right, like. It's like going through that model of like, okay, do I believe this or do I know this? Is this the truth or is this a belief?

 

The truth requires evidence, right, and trying to go through that motion, and to me that is intuition, that's like that's wisdom, right, I love the word. Like wisdom, right, it's like seeking the truth, seeking knowledge, and I think you know we kind of this is kind of zooming out a lot, but I think we also live kind of like in a society that we've actually kind of forgotten what truth is Like. I think people, you know, like us, everybody has their own truth. It's like, well, no, like the truth is based on, you know, the correspondence theory of truth is based on how the reality of the world actually is And if what's said actually aligns with that, which is basically, you know, having a true like, you know, using inductive reasoning, doing testing, having data, having evidence, versus a belief which is not necessarily based on evidence. And I think it's yeah, it's like intuition is important.

 

And then just backing up that intuition, like, okay, is there a way that I can find evidence for this? Or if I can't put my finger on it, let me slow down and figure it out. You know how it is, but I will say that, like, the issue that I've seen sometimes is that some people they get to like a certain level of success and they're like it's like almost blind faith or like you know what I mean Like they just get to a certain level where it's like this is going to work out And maybe like an example of this I don't know, maybe he'll figure it out, but like Elon Musk decision when it comes to like Twitter, like also like something like that where it's just like blind faith. I know what to do And who knows, I mean, who knows. Maybe the media is wrong and he did all the right things. I don't know, it wouldn't be the first time the media screws up, so I don't know, but it's just interesting to me. 

 

Erick Gydesen: 31:59

It's an interesting thing to think through, right, Yeah, I think in that scenario, when you have indicators of success that are happening over and over and over, and also failures that you've been able to learn from, I think the confidence level increases. And then you realize that at a certain point, there's just going to be inherent risk anywhere that you drive the ship that's going to innovate, and, so it is fascinating. I think that you almost need to have a little bit of blind faith in certain things, which is the scary part, that's the risk-taking part of it, right, if we do, for certain that we're going to be successful, well, there's probably a bunch of other people that would already have done it And the innovation probably isn't there. 

 

James Mackey: 32:36

Yeah, it's kind of an obnoxious problem of being a human right, because you want to be rational, you want to hopefully move toward some level of wisdom throughout life. But then it's like thinking about starting a business. There's like what to really have success? I know they say around 90% or 10% of businesses make it. But come on, actual successful scale businesses that are creating value at scale. It's got to be less than 1%. Oh yeah, way less way less. Yeah, so you have to have like that again, like that blind faith, And because if you look at, like the odds per se, it's really, it's really not that great. And I think that that's like the one, like the true benefit of intuition, I suppose, as long as you're aware of, like you know, potentially false associations and false what you think are causal relationships that actually aren't, is the benefit. The flip side of it is it allows you to make decisions quickly. 

 

Erick Gydesen: 33:32

It does, it does. 

 

James Mackey: 33:34

I mean, it's been proven. There's been a lot of studies that talk about the speed at which you make decisions is going to allow you to learn a lot faster. And you can correct the course and test, but as opposed to going very slowly and basically stagnating and you're not going to learn. 

 

Erick Gydesen: 33:49

So no, it's so true, the amount of decisions that you can make, even if they are sometimes wrong, like one of the biggest problems I think is actually indecision right, it's. It's, let's say, you have a let's put it in recruiting context, you have a bunch of talent acquisition in this pipeline that's growing, and then you're trying to hire for a specific role and it's relatively specialized And you have four candidates you're not quite sure which one to go with. The challenge is, when you get in those modes it's really easy to move into indecisions because you just don't know And that indecision slows down all the next hires, it slows down people's confidence in joining the organization, it creates a lot of risk and it's this weird balance of getting as much as we possibly can information wise from this recruiting process. But then also you have to make a decision at some point And as a leader, what becomes very tough is making enough of these decisions fast enough that have a good hit rate, And that's I mean that's why I think leadership roles and executive level roles are so difficult because you have so many of them. They matter and they're not always right. You know that's part of the game. 

 

James Mackey: 34:51

Part of the game is to make decisions quickly and correct them quickly. The other factor in decision-making is how high leverage is this decision So there's nuance to that. 

 

Erick Gydesen: 35:27

It's the expected value of a decision, right? If you're hiring a new leader within an organization, you do need to take that time, And I think a good leader understands that too. But if you're hiring for other types of roles, maybe it's an entry-level type position, If you can build a framework that allows you to make decisions faster And it's not sucking like day one first interview. There's still a process. You know. For us it'd still be. You know there are six steps of that process. However, once we've gone through it, that decision should be relatively clear, cut and just move with it, And if you're wrong you can adjust course. So it's expected value, It's, it's exactly right. How valuable is a decision if we get it right and what's the downside if we get it wrong and what's the probability of outcomes along that spectrum? 

 

James Mackey: 36:13

That's what it comes down to. Yeah, I think it all comes down to like, again, situational, very situational, when it comes to decision-making. I would love to look up if there's any kind of paper on psychology philosophy around the correlation between intuition and wisdom Because, like wisdom, I find it's more kind of like this experience factor, which intuition is obviously correlated with. But it'd be kind of interesting to dive deeper into that. Maybe that's just me kind of nerd out in personal interest but I think it's pretty cool stuff. 

 

Erick Gydesen: 36:42

Yeah, let me know. If you find anything, I'd be excited to hear about it. 

 

James Mackey: 36:44

Yeah, we'll see. Well, hey look, I think, just as a final topic for today, I was really impressed to hear the amount of your employee base that is brought in through referrals. So from the perspective of a high-growth company, currently a little bit over a hundred employees, I'd love to learn from you how you're building out your referral program, the lessons learned, and how you make it so effective. I think it's like over half of your hires are referred in. Is that something? 

 

Erick Gydesen: 37:09

like that. Yeah, we fluctuate between 65 and 70% of our hires. 

 

James Mackey: 37:15

How did you pull that off? 

 

Erick Gydesen: 37:17

Yeah, good question. It wasn't the original design of what we were trying to do. That's just how it's kind of shaped out. But I think it starts with having a great culture, creating an environment where people can succeed, because that's going to, it's going to sprout an environment of winners. When people are winning, other people notice. You can't help it. If someone's doing really well within a field, they start developing this level of expertise, they have a certain culture and vibe around them, it's going to be contagious. That's where it starts. If your people aren't happy, if you don't have a program that's really advancing other people's careers and making it about them, you're not going to have that level of enthusiasm. You're not going to get to this figure. Anything else that we talk about hereafter is not going to matter. It starts with that. It's designing the organization to have that culture and have that runway where people can see their vision within the vision of your business. You can get that part. That's a really hard part If you can start to get that forming. it doesn't have to be perfect, but if you can start to get that forming, then you can start thinking about the next steps.

 

The next steps in that are and this is how we arrived at it when we were going through a roster analysis. we're going down all the team members and we're looking at performance. we started to realize some correlations where it's like huh, this is interesting, this person was referred to by this person, this person referred to by this person. We were looking at performance and there was a correlation there with people that were referred by. Good people were inherently more successful within the metrics that we were quantifying. That wasn't foolproof 100% of the time, but there was a correlation there. We said, huh, this is interesting. A lot of our top performers have these correlations. They came from this specific group of team members. Then what we did was say, well, how do we increase the volume of that?

 

How can we make this more of a norm for us in our recruiting funnel? What we did was remember when we started off, just adding incentives. Super simple, adding incentives. Hey, we're hiring for this position. Who do you know that would be an amazing fit for a culture and would have the skill sets potentially to grow into this role? Who do you know? Throw some incentives behind it? Because the people were already. They would die hard for the company. They were doing well themselves. This was a pretty easy payment for them to bring in referrals to the business. However, at scale, that becomes harder and harder to do. If you have a company with five people, yeah, it's pretty easy to find a couple of people to fill slots. When you start to get over 100 people within an organization, you have to be a little bit more systematic about it. This might start at your company size of even 25 or 35 or 40. But where we're at today, what do we do? Do we call it the force referral method? It's actually taken from Mark Roberge over at HubSpot. He has an amazing book on it. 

 

James Mackey: 40:10

What role is he in the company? 

 

Erick Gydesen: 40:12

He was their VP of sales and did amazing. He wrote a book Sales Acceleration Formula. I think it's perhaps the best book for scaling a sales organization that I've read. I don't think anything is quite on that level. Maybe there is, I just haven't read it then. But he has a book and he has a method. It's something that we were kind of doing, but once we saw it on paper, we're like, yes, this is actually it. He turned that coin into the force referral method. Essentially, what we do is we have the recruiter that's in-house with us, or you can partner with an organization like you guys. As an example, to do this is going through your top performers and asking them hey, who do you know that could be interested in joining an organization like ours? That could be a top performer who comes to mind. Get them thinking about it. They'll bring a couple of people in And the next step is then to have them open up their social profiles. Their LinkedIn, their Facebook, their Instagram, their TikTox, whatever it be, and sit down with them and say who is this person? What do they do? Do you think they could be a good cultural fit for the organization? What about skill set, performance, And going down this list?

 

What happened is people's social accounts. They might have a couple of hundred, they might have thousands, they might have 100,000. There's somewhere in this range. But if you sit down and identify the top 15 to 30 people per performance in the organization, consistently, what you'll realize is there's amazing talent out there that they're connected to. If they can bridge that gap in relationships and hey, our companies, you have your recruiter reach out to them. Hey, James, this is Eric. We have a common friend with an organization that happens to work with us named John. He said you're really sharp. We do X, y, and Z. I've heard nothing but amazing things. How are you? We're looking to grow this organization and you were recommended. I don't know if there's now a time or not, but I wanted to at least introduce myself and see how things are going. Starting those conversations.

 

What happens is you'll build this long-term funnel of people that usually are not ready today. However, something will happen. Someone else gets promoted, the company downsizes, and they are asked to move and relocate to keep their role. There's all these things that happen and these people will come back around. If you proactively go out and dive into the social profiles, which is just a tool for allowing people to jog memories and see how they're related to these different people.

 

Start having these conversations, seeing what's motivating interest in people. You will find pain points over time, just like how we acquire homes for sale. You build these relationships over time. When there's enough pain for people to go on and sell properties, that's the way we come in. They're able to purchase them. It's the same kind of philosophy. We just do this consistently and sit down with top performers in the organization and other contributing team members. We can't even get through all of them. There are people on our team that we'd love to sit and go through and we'd like to have time, but we'll start these conversations. What will happen is you'll start getting a ton of high-quality candidates that will come to your business to go through the interview process. You'll be really, really happy with it. 

 

James Mackey: 43:29

Well, it's incredible. It's a lot of success. You all should be very proud of that status but one of the highest stats. I think too, it's not just about the percentage, It's the outcome in terms of being able to hire great people and the fact that you've been able to get that referral network to the scale it's at and really maintain a really high quality of hire. That's really special Kudos to you. I think it's really impressive. 

 

Erick Gydesen: 43:53

Thank you. Thank you, it's a team effort. for sure. There are a lot of great team members that make it happen. 

 

James Mackey: 43:58

For sure man. Look, Eric. Thank you so much for coming to the show. This was very valuable. I know our growth stage leaders tuning in are going to be able to have some takeaways here that guide talent strategy. Thank you for contributing to the community today. 

 

Erick Gydesen: 44:12

Yeah, Thanks so much for having me and we really appreciate all the things that you guys do for us. You guys have always done such an amazing job for us. Really appreciate it. Thanks for having me on. 

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James Mackey: 44:20

Thank you, I appreciate you saying that. For everybody tuning in. Thank you so much for joining us and we will see you next time. Take care.

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