It's the toughest — and most important — challenge in business today. Lessons from Netscape, Cisco, and Yahoo! on how to find the right people and get them up to speed — fast.
Jim Barksdale, CEO of Netscape Communications, is standing before 50 new recruits at an orientation session. He's a congenial guy with a wry sense of humor. He's old enough to be the father of many people in the room, which is precisely what he doesn't want to be.
First he asks a question: "What's the purpose of this business?
"To make money," replies one new employee.
"Wrong!" Barksdale snaps. "Our purpose is to create and keep customers. Somehow each of you has to be a part of that purpose."
Next he sets goals: Netscape wants to land 200 new corporate accounts by the end of the quarter, to deliver its software on time all the time, and to double revenues every year.
Then he does some attitude adjustment: "We are not a family at Netscape," he insists. "That would put a lot of pressure on me. It would mean I'm the dad." Think of Netscape as a basketball team, he suggests, opportunistic on offense, tenacious on defense. "Then I can be the coach."
The coach runs through a set of hand signals, the last one being fists punched skyward. Then he leads a group cheer: "NETSCAPE! EVERYWHERE! TEAM! FIGHT!"
What's happening today on the Netscape campus in Mountain View, California happens every day in fast-growing companies around the country. The scarcest commodity in business is not customers or technology capital. It's people. More and more companies simply can't recruit great people fast enough. This talent shortage is their biggest obstacle to growth; solving it is their biggest strategic priority.
Barksdale's company focuses relentlessly on acquiring talent. Netscape has distributed more product (at last count, 60 million copies of its Web browser) and generated more revenue than any software startup in history. Which means it has to keep adding people at a ferocious pace. Netscape was founded in February 1994 with 2 employees. A year later it had 350 employees. It now has more than 2,000 employees. Margie Mader, who runs recruiting and staffing, is clear: "Hiring is a strategic initiative here. Every person is involved in the process."
Netscape is not alone. Cisco Systems, the fast-growing network-equipment manufacturer based in San Jose, California hires as many as 1,200 people every three months — but still has hundreds of open slots. All told, there are 18,000 unfilled positions in Silicon Valley today. High-tech companies in Austin, Texas expect to add 15,000 people this year. Last year Boeing hired a mind-boggling 20,000 employees, sometimes as many as 500 people in a single week.
Call it power staffing. If you want to keep growing you have to keep hiring. The real challenge isn't finding people. It's finding the right people and turning them into topflight contributors — fast. First there's recruiting. Most great people already have great jobs. Why should they work for you? Then there's selection. How do you pick the right people without compromising your standards? And don't forget the learning curve. What good is adding new members to your team if they don't know how you play the game?
A handful of fast-growing companies, including well-known innovators like Netscape, Cisco, and Yahoo!, are as rigorous about sourcing, selecting, and shaping new people as they are about designing new products and conquering new markets. Their experiences, and the tools they've developed to keep moving faster, can help you create your own techniques for power staffing.
Build the Buzz
first the bad news: fast-growing companies are chronically short of talent. Now the good news: fast-growing companies are in a unique position to attract the most and the best candidates — if they leverage their success to build a buzz. Put simply, the best way to find great people is to encourage them to find you.
Consider Netscape. Sure, the company is adding people at a fever pitch. But even more people have Netscape fever. The company receives as many as 6,000 résumés and interviews as many as 700 candidates per month. (That's 60 résumés for every person hired.) At Netscape the demand for talent creates its own supply.
This wave of interest is no accident. From the beginning, says CEO Barksdale, the company's basic recruiting strategy was "to get known." That is, to become the kind of place where great people want to work. That's easier for some companies than for others. Netscape is more than just a fast-growing software outfit. It's a cultural icon, the flagship company of the Web. Netscape recruiters are full of stories about people going to extraordinary lengths to get their attention. One hopeful wrapped his résumé around a package of cookies. Another arrived for his interview on a skateboard.
Not every company sits at the intersection of serious business and pop celebrity. But that doesn't mean they can't become talent magnets. Cisco is a case in point. The company is a competitive juggernaut, with revenues of more than $4 billion and a market value of more than $40 billion. But there's no chance that Cisco will ever capture the popular imagination the way Netscape has. So it uses guerrilla techniques to raise its profile. Cisco's build-the-buzz strategy centers on the primary market for its products: the Internet itself.
The company's Web site (http://www.cisco.com/jobs) has become a turbocharged recruiting tool. Looking for a job at Cisco? Search by keyword to match your skills with openings. You can also file a résumé or create one online using Cisco's résumé builder. Most important, the site will pair you up with a volunteer "friend" inside the company. Your new friend will teach you about Cisco, introduce you to the right people, and lead you through the hiring process.
But the real power of Cisco's Web site is not that it helps active job-seekers move more quickly. It's that it sells the company to people who are so happy in their current jobs that they've never thought about working at Cisco. "We actively target the passive job seeker," says Michael McNeal, director of corporate employment.
That's why the company advertises the site in places where its kind of people hang out. Cisco has linked to the Dilbert Web page (www. dilbert.com), the darling of disenfranchised programmers. Last winter, right before the Super Bowl between the Green Bay Packers and the New England Patriots, Cisco advertised on Boston's leading electronic city guide (www.boston.com). The site was registering 2.5 million hits per day, many from engineers and Net-savvy managers from Route 128. Cisco also buys space on sites like TravelQuest (www.travelquest.com), the reservation service. Software lets Cisco read the URLs of Web surfers, match them to outfits it likes to recruit from (such as competitors 3Com and Bay Networks), and then, and only then, paint a banner with a link to the company's jobs page.
Thanks to these and other savvy tactics, Cisco's jobs page records as many as 500,000 accesses per month. Cisco generates a stream of reports about who is visiting the site and fine-tunes its strategy accordingly. For example the company knows that most hits come from the Pacific time zone between 10 a.m. and 2 p.m. The conclusion? Lots of people are trolling for jobs on company time, always a nerve-racking pursuit. So Cisco is developing software to make life easier for stealthy job-seekers. It lets users click on pull-down menus, answer questions, and profile themselves in just 10 minutes. It even covers their backsides. If the boss walks by, users can hit a key that will activate a screen disguise — changing it to "Gift List for Boss and Workmates" or "Seven Successful Habits of a Great Employee."
Never Settle for Less
You're desperate to fill that slot in marketing. you're losing business. You finally have a decent candidate. He's not exactly what you're looking for, but somebody beats nobody, right? Wrong. A cardinal rule of power staffing is that you should never hire people you wouldn't hire if the people shortage weren't so severe.
Hiring fast doesn't mean you have to lower your standards. And refusing to settle doesn't mean you have to slow to a crawl. The secret is to decide up front the kinds of people you want to hire, identify mismatches quickly, and then develop techniques to evaluate the remaining candidates for the traits you need.
EMC, the red-hot manufacturer of enterprise storage products based in Hopkinton, Massachusetts, uses just this approach. Four years ago, when it was still a relatively manageable 700 people, the company realized that demand for its products was taking off. It was about to go on a growth (and hiring) tear. But top management wondered how the company could add literally thousands of new people without losing its identity — the cultural attributes that had made it such a success in the first place.
So a team of senior executives and HR specialists began to brainstorm: What characterized great EMC employees? Those sessions led to the EMC "Employee Success Profile," a detailed definition of who makes it at EMC. It is built around seven categories: technical competence, goal-orientation, a sense of urgency, accountability, external and internal customer responsiveness, cross-functional behavior, and integrity. "We've held fast to those attributes as the core nuggets" of hiring, says John Ganley, EMC's director of corporate staffing. That's why, he argues, EMC is still much the same company it was four years ago, even though it now has 5,100 employees.
Yahoo!, the Internet search firm in Santa Clara, California, is also in the middle of a growth tear. Incorporated in April 1995 by two Stanford University graduate students, Yahoo! went public one year later. Users view an average of 30 million pages per day, up from just 4 million in 1995.
No company can grow this fast without adding gobs of people. At the time of its IPO Yahoo! had 65 employees. It now has three times as many, with an average of 50 open slots at any time. Little wonder that senior managers spend 30% of their time finding, hiring, and keeping the "right" people. But who are the right people?
Jeff Mallett, Yahoo!'s senior vice president of business operations, says the company has identified the core attributes behind great Yahoo! people. He says the company will simply not add new people unless they make the grade on these four factors:
People Skills: "We assume that in a short period of time, any person we hire will be responsible for managing other people," Mallett says. "So we always look for good interpersonal skills."
Spheres of Influence: "The people we hire should have their own shortlists of great talent," Mallett says "Our own people's 'little black books' are our best form of recruiting."
Zoom in, Zoom out: "We need people who can get so tactical it hurts," Mallett says, "who can do the blocking and tackling to make a project happen. That's 'zooming in.' But these same people also have to 'zoom out,' to look at the big picture: How is this project going to affect the competitive landscape?
Passion for Life: "We want people who are passionate about their subject areas," Mallett says. "And it turns out that most people who have a passion for something specific — sports, arts and culture — also have a passion for life. It's not just about doing great things for the company, but also great things in life."
You don't have to be high-tech to be highly selective about the people you hire, or to devise highly refined techniques to evaluate candidates quickly. Five years ago, Christopher Shipp, director of training and development at Prudential Securities, spent nine months figuring out what kind of people made great financial advisers. He researched the company's 800 top performers and identified a dozen measurable criteria.
For the last three years, Prudential has used these 12 criteria to hire new financial advisers, including 1,000 people last year alone. Candidates take a written test for experience, endure a battery of structured interviews, write a financial plan, and visit Prudential up to four times. Roughly 10 candidates apply for every person hired. The investment per hire? Between $60,000 and $100,000, Shipp estimates, including evaluation expenses, first-year training, and draws against commission. "There are no shortcuts," he says.
But there can be big payoffs. By 1996, after three years on the job, the first class of advisers hired according to the 12 criteria had generated an average of $14.5 million of client assets each — comfortably above the company's best-case scenarios.
Get a Fast Start
it's hard for fast-growing companies to generate a pool of candidates big enough to satisfy their voracious appetites for talent. It's harder still to select the right people quickly. But there's one more challenge: to turn helpless newbies into productive contributors. Call the process what you will — orientation, indoctrination, basic training — it's a critical element of power staffing.
Beau Parnell, Cisco's director of human resource development, calls a new employee's first day "the most important eight hours in the world." His personal mission, he says, is to help Cisco achieve "the fastest time to productivity for new hires in the industry."
That requires work — and technology. Last year, employee surveys at Cisco showed that some new hires felt like lost baggage rather than the company's most precious asset. Their phones didn't work. They had computers but no software. They had software but no idea how to use it. Amazingly, in a company synonymous with the Internet, they weren't getting email addresses for two weeks.
Parnell briefed CEO John Chambers and got clearance to create Fast Start, a collection of employee-orientation initiatives. Today, computer software tracks the hiring process and alerts facilities teams just before a new recruit arrives. As a result, every new employee starts with a fully functional workspace and a full day of training in desktop tools (computers, telephones, voice mail).
But Fast Start doesn't just eliminate headaches. It opens people's eyes to life inside the company. Each new hire gets assigned a "buddy" (a peer in the company) who answers questions about how Cisco works. New employees take a two-day course called "Cisco Business Essentials," which covers company history, the networking market, and Cisco's business units. Two weeks after new hires start, their managers receive an automatically generated email reminding them to review departmental initiatives and personal goals.
Some companies turn orientation into a self-managed project. MEMC Electronic Materials in St. Peters, Missouri, the world's second-largest producer of silicon wafers, has been hiring as fast as it can over the last few years. It's been hard for MEMC to find great people. But it's been even harder to get them working effectively in one of the world's most technically demanding industries.
Operations Manager Mike Benton remembers how newly hired factory-floor managers used to learn what they needed to know: "We crammed it down their throats in two weeks." But as the company kept growing, it was not unusual to find coaches with a month of experience managing operators with less than a year of experience. "We had the blind leading the blind," says Benton.
So he began assigning The Paper. Today when new coaches arrive at MEMC, the last thing they do is start working. Instead they spend four weeks researching and writing a report that documents how the company handles all of the performance parameters for one step of the manufacturing process. Once they finish the paper, they tag along with a company veteran for several weeks. Only then do new hires assume management responsibility.
New engineers also spend two days immersed in the company's history and operations. They then receive a workbook filled with questions about every part of the company — from manufacturing to computer systems to purchasing to employee benefits. The engineers have three months to answer literally hundreds of questions.
Of course, the only way to complete the workbook is to talk to people all over the company. "It's designed to get people outside their department," says Don Otto, director of employee relations. New employees network like crazy to learn as much as they can.
Which may be the best way to get up to speed fast. Back at Netscape, after he's led the company cheer, CEO Barksdale explains his theory of the "virtuous circle" behind successful companies. Great people build great products, he tells the recruits. Great products generate big profits, which provide resources to attract more great people. "Once you get it going, it's a self-sustaining cycle," he says. "You no longer have to run the business. The business runs itself."
Bill Birchard (email@example.com) writes on business and technology from Amherst, New Hampshire.