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© 2000 Selection Strategies, Inc. All Rights Reserved.

Welcome to Issue Number 3 of The Dossier.

Since our last issue, things in the US economy have improved somewhat, following several interest rate cuts by the Federal Reserve Bank and more likely to follow. Individual corporate forecasts have been mixed. Hardware vendors like Sun Microsystems have been adjusting expectations downward, but applications vendors like Oracle Corporation are hitting earnings targets and remain bullish in the near term.

So what does this mean to you as a corporate talent scout? That's what we'll be exploring in this issue.

Before we get into that, we at Selection Strategies would like to say hello to Ms. Ruth Tan, Editor of the the Human Resources Journal for Butterworths Asia in Singapore. Ruth will be reprinting our eZine content in her publication from time to time. Thanks, Ruth. We're looking forward to meeting your audience.

Now, back to business. This issue includes two articles.

Thanks for visiting; Don't forget to check back here for Issue #3 in June!

Playing the Game to Win:
Adjusting Your Recruiting Plan to Economic Conditions

Cyclical downturns like the one we're in right now
offer some provocative options for finding great performers...

The past two years have been very interesting ones for us. As the post-Y2K economy slips and slides along, we have experienced a change in the recruiting environment that paralleled the overall malaise of the IT industry. We followed many of our former big company contacts into the world of start-up corporations, and our active client list became overweighted with young companies rocketing toward their initial public offerings.

Our start-up clients, Blue Martini Software, Cybrant Corporation and others, were smart enough to identify and create real products to answer real market needs. Blue Martini's Customer Interaction System® remains the acknowledged masterpiece of customer personalization software. Cybrant's Business Velocity® and Commerce Velocity® are unique guided decision making products for online purchasers, with unprecedented speed of implementation.

In other words, we didn't have any sock puppets or DrKoop.coms on our roster. There are some things even a recruiter won't do. Well, this recruiter, anyway.

Our client companies will survive and prosper, and will most likely do so on their own terms. But a receding tide grounds all boats, and as their retained recruiter, the last two years were as much a rollercoaster ride for us as for them.

The short-term trend has shifted from big tech companies' inability to compete with dot-coms for talent, to the dot-com collapse and the emergence of the current mini-buyer's market for large-cap techs. And with it, we learned a few important lessons for recruiting.

Advertisers will tell you that, in a world full of change, human nature stays constant. If our experience is anything to go by, they're right. Let's explore how recent trends in information technology are shaping the marketplace for talent

Lesson Number One: Exploit Corporate Arrogance

Large- and mid-cap information technology companies had a rough time finding sales talent in the last part of the 1990's. It was a five punch combination for them.

First, overreaction to the Y2K "problem" caused many customers to curb spending.

Then, the overwhelming penetration of enterprise software into large-cap companies caused saturation. Now enterprise software vendors had to focus on mid-cap companies for the next phase of their expansion.

Next, enterprise software vendors learned a hard lesson. Software sales cycles for mid-cap prospects weren't really shorter or easier than those for large-cap customers. But the typical deal size was much lower. Margins suffered. At this point, some ERP market leaders began to falter. Not all would recover.

Then, customers began to question the indefinite implementation cycles for enterprise software and the elusive return on investment against promises made by their software vendors. It became apparent that, though software was necessary to streamline business processes, the rewards for adoption were hard to define in bottom line dollars. More and more, companies requested cost savings estimates from vendors during the evaluation phase; if a purchase couldn't be justified in terms of measurable efficiencies or staff redundancy, the purchase didn't happen.

And finally, as if all of this wasn't enough, the Internet boom changed everything again. Suddenly, stable companies with real profits were less attractive than new companies with vision, venture capital and heavy stock options. Nowhere was this more true than in apps software sales. Top guns from the NASDAQ 100 abandoned stable compensation plans and perceived stagnation for the promise of a fortune from a provocative niche player in five years or less.

This irritated many big tech sales managers and recruiters, who had grown accustomed to choosing from a slate of motivated, talented saleseople who thought a job at their company would be the pinnacle of their sales careers. The youthfulness of the industry also meant that many of the executives, managers and staff in these companies were "failure virgins," people who'd never lived through a significant business downturn before.

After a couple of years of walking their own career tightropes, these managers and recruiters often became first relieved and later vindictive when the dot-com collapse hit full speed.

Have you recently had a great candidate languish because a recruiter or hiring manager couldn't be bothered to schedule an interview? How about a client who will only accept candidates from a direct competitor, no matter how impressive the sales performance of the candidates you present? Or perhaps a broad-based reluctance to interview former employees, irrespective of their performance before leaving the company?

You're seeing examples of the kind of corporate arrogance we're talking about. Having been the ugly stepsister for a few years, some hiring managers and in-house recruiters now want to sit back and cherry pick from only those candidates that meet the narrowest of criteria. Direct competitors, for example, or some arbitrary number of years of experience. In other words, they only want to look at those candidates that they are least likely to see. In the meantime, sales jobs go unfilled, prospects go unvisited, quotas go unmet, and the net effect is that the income statement looks very much like it did before the big tech companies regained their advantage, often at great cost..

It's the dark side of esprit de corps. Emotion trumps business.

This can actually become comedic. What can you say to a manager who only wants to interview candidates who are blowing out their quota at a direct competitor whose compensation plan is virtually identical? Why in the world would someone like that want to take a giant step sideways into another company?

So what should you do about all this?

First, if you're an agency recruiter, don't waste your time and your prime candidates on companies like these. Check back in a year. By then, desperation will probably restore sanity.

Second, if you're part of a company like this, clean up your act, grow up and be businesslike in your recruiting activities. You're probably losing the talent war to your competitors, and you may not be noticing it.

Third, if you're a competitor, use the inefficiency of others to your advantage. Talk to your competitive intelligence people. Work your personal network. When you interview, ask your best candidates who else they're talking to, and what their perception is of those companies' attitudes in the hiring process. When you spot this kind of corporate arrogance in your competitors, position yourself against it and sell hard.

Leave those companies who are riding a wave of schadenfreude alone with their smugness. Keep waging the talent war by our rules, and you'll win.

Lesson Number Two: Be Prepared to Move Fast

In last quarter's article, The Soul of a New Recruiting Machine, we provided a checklist of basic skills and assumptions that drive the success of great recruiters. Our second lesson reprises two of those skills: knowing your industry and being prepared to interview without a job requisition.

You may remember that last fall, eCRM software vendor Vignette talked up major expansion plans in the trade press less than a month before a massive layoff. What was to be learned from this? First, that their expansion plans meant that they weren't letting dead wood go; the tyranny of numbers was forcing them to do something they didn't want to do. Second, layoffs often wound the survivors as well. Hunting within the company's roster might have been as lucrative as scanning the cut list. And it very likely was, for companies that weren't afraid to source, interview and hire out of cycle.

If you're quick, there will probably be a few feasts coming up as the tech shakeout continues.

Look at your competitor's cash statements. Use their staffing levels to make projections about run rate versus cash on hand. Anticpate layoffs and launch when the moment's right. If you are keying on direct competitors, this is the right way to go about it.

Lesson Number Three: Check Your Assumptions Before Rejecting a Candidate

We'll be dealing with the specific problem of candidate experience as a primary selection criterion in the article that follows. For now, the important thing to remember is that we've just come through a stock market boom (and bust) with few historical precedents. It'll probably be years before the NASDAQ index hits 5,000 again. Plan your future recruiting efforts with this fact in mind.

How do you do that? One way is to modify your assumptions about job turbulence. The historical attitude toward short tenures at companies for salespeople is to assume that they left one step ahead of the posse. That they weren't making quota, or that they burned through their entire Rolodex and had nothing in the pipeline for the next sales year. Well, you could be right. Or your candidate could be a victim of history.

Many of the folks who ventured into the dot-com world were primo risk takers, willing to bet their skill against a king's ransom. Be careful about punishing them for this. Carefully examine their pre-1998 history for greater stability and success. If you have doubts, probe carefully during the qualification phase. If you still have doubts, don't hire. But don't deprive your compnay of a great prospect simply because you're applying evaluation rules that are now subject to the influence of a specific historical anomaly.

Lesson Number Four: Sell the Right Thing to the Right Person at the Right Time

One of our Ten Principles of World-Class Recruiting is, "There are no universal incentives." What compels a person, even a person with a strong cash motivation, to accept your offer varies from individual to individual. In fact, if the profit motive is a constant, as it tends to be among salespeople, real leverage is often gained from the other terms of the deal.

Dump your canned sales message. Listen carefully to your candidates during interviews. Use your powers of discernment to identify their buying agenda.

What do dot-com refugees want? Well, for starters, the shell-shocked set may well want the security they were willing to trade away in the '90's. That security may be expressed as a function of your company's current industry position and vision of the future, a return to the kinds of products and services that made their career, or it may be the reassurance provided by friends at the salesperson's former company.

You can sell a bright future through favorable reviews of your company or products by industry influencers like Gartner, Meta Group, Forrester, Yankee Group, et al. You can influence candidate choices by favorably positioning your company and culture against your competitors. You can sell strength and stability versus dot-coms.

And within the boundaries of ethics and honesty, always spin. Play to your strengths and leverage good news. If your market valuation is down, sell culture and opportunity. If your market value is up, sell performance, culture and opportunity. Compare and contrast your environment and jobs available against your competition or your prospect's current situation. And never apologize for problems that are industry-endemic, like, say, a market sector crash.

Above all, don't assume facts not in evidence. Like any good salesperson, ask what's important to your prospects and craft your sales message accordingly. And if you decide not to hire an individual, do it for sound business reasons, not to make yourself feel important.

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Good recruiting is a blend of art and science, and as French physiologist Claude Bernard once observed, "Art is I; science is we." Obviously, as you work to overcome any biases you may have, you will also want to integrate your sales team into the candidate evaluation process as always. As you work through this, keep an eye out for signs of the same counterproductive attitudes we've disscussed in this article. You don't want to lose strong prospects because one or two members of the team give off inappropriate signals. Work to make sure that "we" supports your goals.

The lessons we've covered here aren't intended to supplant principles we've previously introduced. We simply wanted to remind you of the relative uniqueness of recent business history, and to point out a few specific observations we've made over the past two years. We hope you find them useful.

If you think we've missed something important, or want to ask a question about the information in this handout, you can reach me here or at 877-389-1250.

 

The Experience Trap: Getting Past
the Resume and Adding Value to Your Company

Author Michael Kami once said "For every complex
problem, there is a simple answer - and it is wrong."
Speaking of which, say hello to the cardinal sin of sales recruiting.

Pop Quiz Time, everybody!

You're recruiting for a pre-IPO Sales Force Automation software company. Your product line is well regarded, your annual revenues are at $200 million, and you're looking for some regional account executives.

There are three resumes on your desk.

Candidate A is a recent college graduate, a man with three years experience selling eCRM software to clicks-and-mortar clients, primarily retail. He's been at 200% of quota each year and was referred to you by a reputable third-party recruiting agency.

Candidate B is a twelve year sales veteran who began in mainframe financial applications, and moved to the market leader in HRMS software in 1992. He made his quota selling the mainframe finance product, did well over 200% of quota at the HRMS vendor through the mid-1990s, and has been within spitting distance of quota since then.

Candidate C has a ten year history of software sales with mid-range ERP vendors. Over half of his career has been with a software publisher, selling IBM AS400-based solutions. She averaged about 200% of quota at that vendor, and has been at or over quota for the remainder of her career.

O.K. Based on what I've given you, pick one answer below:

Well, if you read the title of this article, it wasn't much of a quiz. But we needed to establish a few experience profiles to illustrate why the reliance on experience is so dangerous.

Reliance upon the experience section of resumes as a primary screening tool is problematic, because it doesn't address many vital questions of candidate qualification. Resumes are the classic screening tool. Ironically, in a tight marketplace for talent, companies are often deluged with resumes from the wrong candidates. To manage the flood, resume databases and applicant tracking systems are often used to warehouse those resumes until a keyword search is initiated for specific job skills or experience.

Given this method of handling inbound resumes, the first problem to emerge is that the applicants that know the most about the system are those most likely to get interviews. It's up to the skill of the recruiter to separate those who know the job from those who know job hunting. Quite often these groups are not the same. In fact, great prospects are often bad at career searches, prefering to focus their time and energy on other things. Like becoming great prospects.

And that introduces the problem of validating experience. Think again about our three hypothetical candidates. Each is based in part on the backgrounds of real salespeople.

Would you reject Candidate A because of his limited software sales experience? Or should you be looking deeper into his backgound and work history? Was he a software implementation consultant prior to going into direct sales? Is his company notoriously noncompetitive against other vendors? If so, how does he manage to do so well? How does he manage sales cycles? What are his innate sales competencies?

How about Candidate B? He did his best work selling for a market leader half a decade ago, and less well since. What was the competitive landscape like during his best years? Did he have to sell or was he just an order taker for a product in high demand? Were his best sales years a function of membership in strong sales teams? What was he actually responsible for doing in the sales cycle? Was he the closer? What about his years selling mainframe apps? Did he sell for a company like old IBM, where the policy was to set readily achievable quotas as part of the salesperson's professional development? What's the basis for his decline in the late 1990s? Is he just a victim of the factors we described in the article above? These are some of the issues you'd want to examine in the qualification phase.

And Candidate C? Selling 200% of her number in AS400 solutions in a marketplace transitioning to client-server applications comes across as a powerful endorsement of her selling skills. But how much of her number was maintenance and services? Was she selling into established accounts or developing a new customer base for her company? Is she sufficiently up to date technically to continue to excel as the marketplace shifts to web-enabled and peer-to-peer operating models?

We could flog this horse until we get burgers, but our intent was simply to point out that experience alone determines very little. A salesman touting fifteen years of experience might actually have one year of experience repeated fifteen times.

We advise our clients to give a candidate's innate sales competencies and interpersonal chemistry greater weight than their basic experience, and to drill down into the experience of a candidate to help discover their innate sales competencies.

Of course, this is all common sense, and any recruiter worth their salary does this kind of in-depth validation as part of their normal screening procedure.

There is one other question you should ask yourself honestly. If we hadn't had this time together, and the resumes for Candidate's A, B and C crossed your desk, what would you have done?