Typical hiring techniques deliver worse results than simply flipping a coin. The success rate of new hires within 18 months is less than half (46%). The resulting soft and hard costs of a hiring mistake to your organization can add up to some 15 times the candidate’s salary for a mid- to senior-level role. Multiply the losses accumulated through each mis-hire across your entire organization and you see how hiring becomes a multi-million-dollar responsibility.
But instead of accepting these expensive mis-hires as the cost of doing business, you can adopt a better approach. And, at the same time, you’ll remedy the three most common mistakes made when hiring — not clearly defining the role before you post a job description, allowing managers to go it alone when hiring, and applying an unstructured interview approach.
This better approach to hiring utilizes an essential tool, which I’ve dubbed a “Cipher,” and has driven a 90-percent success rate in evaluating how people will perform in their new roles.
A job Cipher is not to be confused with a job description. Job descriptions summarize the responsibilities and requirements of the job for potential candidates. They include information like schedule, education requirements, and pay, and contain a list of needs, wants, and wish list items of what the role may entail. But job descriptions almost always lack the most important element: the essential details of what truly must be accomplished in the role, and prioritization of those to aid in candidate selection. A job description serves in sharing basic elements about the role but isn’t useful for evaluating candidates.
The Cipher, by contrast, is a succinct internal document created for a specific position that explicitly lays out in a prioritized fashion how success will need to be achieved in the role you’re looking to fill. It ensures internal alignment regarding what you’re hiring for and what you need this person to do.
Once you break a job down into those key elements, you can take a far more strategic approach to hiring your team. For example, Billy Beane, the Oakland A’s General Manager of “Moneyball” fame, applied data analytics to predict a player’s performance on specific elements of the role. This was in stark contrast to what conventional wisdom suggested: scouts would size up a player and use their traditional “rules of thumb” to determine whether to draft the player, such as attitude, size, or even how attractive their girlfriend was. Billy’s use of analytics paid off when his team, the Oakland A’s, made history by winning 20 consecutive games in American League baseball.
It’s crucial to develop the Cipher for what you need over what you want, and to do so before you’re influenced by candidates in the pipeline. Too often hiring processes begin with putting the recent job description online and looking to see what candidates that attracts. Over time, and after many unnecessary interviews, the hiring manager finally finds someone who “feels right” for the role. If they even try to create some sort of scorecard at this point, they are inevitably biased by what they believe their chosen candidate can do, rather than by a clean assessment of what is most needed in the role.
Developing a Cipher involves distilling the position into four components: Charge (the one sentence summarization of the role); Outcome (the specific and measurable impact the person will have on the organization); Deliverables (the 5-7 accountabilities required to achieve most of the outcome); and Efforts (how each Deliverable will be achieved). Together, the components spell the easy-to-remember acronym: CODE.
As you design your job Cipher, here’s what to consider for each CODE component:
- C is for Charge: The Charge is a qualitative statement that reflects the essence of the role and establishes a shared language for prioritizing the job’s key aspects for everyone involved in the hiring process. It’s comprised of one sentence that outlines succinctly the impact you want this individual to have on the company. Ask yourself, “What is this role’s non-negotiable, job-relevant, yet unique attribute? Specificity counts. Include the most important interpersonal trait you’re looking for in a new team member. Then define the desired impact this person will make that speaks to the essence of what they’ll be doing — improving production; building something new; etc. End the sentence by including the state or growth phase of the company. For example, “A scrappy Director of Sales to re-energize the sales force and institute process rigor for a fast-growing company.”
- O is for Outcome: Ideally, the Outcome you create will be a single sentence that successfully covers the specific impact this person will have on the organization, along with a few bullets to provide clarification. An Outcome’s four distinct parts include timeframe; the key metric to be changed; by how much the metric will change; and any other critical requirements — such as a further element that may significantly impact how success is achieved. For example, “Drive revenue from $20 million to $35 million in three years within our core business plus adding $5 million from new product sales.”
- D is for Deliverable: The Deliverable addresses the tactical aspect of what must be accomplished. It comprises the business objective (the “what”), team management (the “who”), and company culture (the “how”). Returning to the Director of Sales example, it could read: “Directly train, mentor, and ensure the quality of sales approaches throughout the territory.”
- E is for Effort: Effort outlines specific actions and behaviors needed to complete the Deliverable successfully. They define how success is measured, specify the most critical details, and identify what’s unique about the role in the company. For example, for the Deliverable: “Manage our outside contractors to deliver marketing collateral,” an Effort can specify: “Manage 8 to 10 independent contractors and three agencies.” Prioritize Efforts so that you have five or less per Deliverable.
Creating and applying a Cipher to your hiring process — and later your review process — allows you to know exactly what success looks like and how it will be achieved. Building specificity helps you determine the best candidate for the job and make the right data-driven choice. Afterall, how will you find the right person if you don’t know what you’re actually looking for?
