From Jan Andriessen – henQ (@JanAndrssn)

As a VC, one of my main responsibilities is to facilitate portfolio companies in performing key hires and setting up a good hiring policy. In this and following posts, I will provide you with an overview of the most prevalent hiring improvement areas I see across the hiring cycle. I will begin with the first step in the hiring cycle: employee targeting. “Employee targeting” is the process of deciding what type of person you would like to hire. 
I believe that having a well-structured employee profile facilitates in hiring the right person as much as good customer targeting helps to close sales. Having a well-structured employee profile means that you have properly assessed your company’s needs. In addition, it means that you have thought about who might be interested in fulfilling your company’s needs (i.e. for which type of candidate the job opening signifies having a meaningful job that is the next step in his/her career). The two most common pitfalls in building an employee profile that I come across are listed below:
Having a candidate profile, but not a workable one
Like with customer targeting, few companies drill down until there is a workable target candidate profile that facilitates a relatively quick and successful search. Oftentimes profiles are so generic (e.g. “good analytical skills” or “customer focused”) that there is little benefit over having no profile at all. The end result of this will eventually be low employee performance, preceded by a time-consuming and confusing hiring process, because you simply don’t really know whom you want to hire.
To avoid the above, three key questions need to be answered in an objective way:

  • What KPI’s will this person be responsible for when we hire him/her and at what level should these KPI’s be at the end of the year? (E.g. for a VP Sales this could be an end of year target of €200k MRR+, as well as a maximum annual churn of 10%);
  • Which competencies are needed to achieve these KPI’s, given the level they are at now? (E.g. Being able to hire good sales/customer employees to expand sales capacity, being able to get these employees up to 100% or higher productivity, and being able to maintain employee performance);
  • Given the compensation I can offer, what type of person would have the required competencies? (E.g. A person who has successfully hired, on-boarded and managed sales employees before, and has relevant experience with the same type of product, sales cycle and DMU).

Answer these and make sure they are measurable (e.g. for a VP Sales the KPI in the first question should normally be a specific revenue growth number, not “significant growth of the sales organization”). Do so and you’ll know where to look for candidates and how to recognize the right candidate when he/she is in front of.
Looking for ‘Mr. Perfect’ (in case of making an employee profile for senior/executive hires)
Just as Mr. Darcy is only to be found in novels and movies, it is a fictional idea that someone with a Steve Jobs-equivalent profile will ever come work for your company. The very best entrepreneurially-oriented people will normally not work at a relatively small, unknown, already existing company. 
From the outsider’s perspective of a VC it seems common sense that for most vacancies you need to settle for a less than perfect candidate. It appears to simply be demand vs. supply. I do believe, however, there are two logical reasons why many founders still look for Mr. Perfect:

  • There is a gap between the perceived value of the employment opportunity for the founder vs. the candidate. Many founders have a strong vision of the future. This usually is a grand picture in which their company plays a glorious role, making the open position an absolutely unique opportunity to the applicant. The applicant him/herself simply sees an opportunity for personal development (learning opportunities based on current vacancy) and sustenance of lifestyle (based on current compensation package). Not being the owner of the underlying vision, the candidate has a strongly discounted picture of the company’s bright future. This, in my view, is why a job often seems more attractive to a founder than a candidate and why founders think they can get Mr. Perfect.
  • Additionally, it requires a lot of judgment to assess what the key requirements are to get the job done. Hence, it becomes tempting to just look for someone who is good at (almost) everything to avoid mistakes in prioritizing among competencies.

However understandable the above might be, looking for Mr. Perfect can be quite destructive. Most studies show that usually only a few criteria predict success in a certain role. Looking for someone who is good at many things you usually run into the following problems:

  • The pool of great C-level executives who fit this broad profile is very small (general rule: the broader the profile, the smaller the talent pool);
  • The number of great executives who are interested in working for startups is even smaller;
  • Even if you find an interested executive, the chances of him/her being interested after he/she hears what compensation you can offer is minimal;
  • If you do find someone who will work for you, you run the risk of not properly qualifying that person because there are so many criteria to assess that you assess none of them really well.

In other words: if you don’t narrow down your employee profile to a few criteria, things will become a mess.
Instead of Mr. Perfect, try to go for Mr. (or Mrs.Perfectly Suits What I Need. This is a humbling but worthwhile exercise. Mr. or Mrs. Perfectly Suits What I Need is not good at many things. In many cases, this person is only good at a few aspects of running an organization. This is why they are interested in the vacancy. And, if you made a proper employee profile, it is just enough to take your company to the next level!