Warning: You're the Problem with Your Hiring Process

Here’s a slightly unusual approach to investing. Investor Adoption is when an investor takes a more active and advisory role in the company, often “adopted” into the leadership team. Sitting down with serial entrepreneur and investor Robert Davis, we identified potential attractors for a hands-on investor to your organization. If you’re looking for someone to come in and hit your flatlining company with a defibrillator, consider these characteristics.


Contrary to many angel investors, these investors seek out chaos. They see problems, and they also can observe the organization’s potential to soar. These investors are drawn in by your issues, which are prime for the fixing. Often, these individuals have years of experience dealing with every kind of chaos imaginable. Thanks to their tried and true processes for dealing with their own successes and failures, they can transform your company’s issues into positives.


In Davis’ case, a particularly significant red flag is a company’s culture. The culture is the foundation of any startup, and if your culture is flawed to begin with, the structural damage threatens company success. Not only that, if your company culture is stagnant or unprosperous, your entire company is affected by that flatline. Where does culture damage stem from? A lack of clarity in vision and mission.


An adopted investor can provide great insight into defining your company’s vision. They understand, through experience, it is your role as CEO to identify the vision and have the company execute the mission. When you dictate a goal vision and then skew towards something else, you steer our entire company off course. A CEO’s responsibility is to create a vision, develop it with the team, and execute it as a company.


KPIs are king


Aside from vision/mission issues, investors take an interest in the key performance indicators (KPI) of your company. And not just numerical indicators; emotional, too. Each employee is continually growing and creates benchmarks for themselves in their own careers. If company KPIs and employee KPIs aren’t aligned, the company is getting a false start.


For example, you can hire someone to for an operations management role. This person has a great resume, wonderful experiences, and they love doing it. But you don’t know their personal trajectory -- they might wanna go into real estate! If you don’t pick up on those personal goals, the working relationship may not last long.


A quick sidebar: this is the recruiter’s job to screen for these incompatibilities. Only a recruiter can ask these questions because they are not actually hiring the interviewee. There are sneaky workarounds for questions like this, such as “If you could design your next job, what would the workload be like?” But personal questions about their career goals can be risky and lead to compliance issues. Especially in California come 2018.

CEOs make or break hiring processes

Another interesting twist that comes with the “Investor Adoption” phenomenon. Investors arrive to fix hiring issues that hinder success or damage culture strength. And often, the real problem at the root of your company’s growth is you.


CEOs get in their own way. Especially founder-CEOs, these new entrepreneurs often develop hiring processes that ruin their company. Unfortunately, the company has to follow their lead...because they’re in charge. Many CEOs make two essential hiring mistakes off the bat:


  1. They use their HR department to hire people. HR individuals are most times NOT recruiters. Unfairly, people expect them not only to know all compliance laws but also how to find the best talent. Also, this hands-off approach leads to potential issues with your job descriptions. Instead of having a clear vision of the role, the candidate only sees a checklist of qualifications. If they “fit,” and either don’t get hired or don’t work out in the role, your company’s neck is on the chopping block. Overall, it’s difficult to outline the precise credentials and personality of a person on paper. A poor HR person isn’t quite equipped to do that digging.


  1. The CEO tells their HR department to hire the people they want. Instead, they should employ for what the company needs. New entrepreneurs love people they can engage and connect with. They don’t realize they need to hire people who will challenge them and make them uncomfortable. This is what drives the company’s growth and executes your vision. It is essential.


Entrepreneurs like to hire yes men in the beginning. It could be an ego thing, or it could just be a desire to drive your precise vision and not allow others to have control. It's not fair to the company to hire only people the CEO likes. Furthermore, you’re doing your business an injustice by teaching them this is a correct hiring. It perpetuates a snowball of trouble that will eventually stagnate everything you’ve built.


Executives should always try to hire people smarter than them. It’s scary because those people could oust you out of a job. But if you’re starting a company, you should want to build yourself out of a job. Trust the process. The company itself will survive and thrive.


Rick Girard is the Managing Director and Founder of Stride Search, an engaged talent search firm. While not running a School for Gifted Mutants, he hosts Hire Power and creates valuable and tactical content for entrepreneurs to utilize to successfully build an outstanding team.

Robert Davis grew up here in HB , started in Aerospace, to a snowboard manufacturing , Thermal Snowboards. Thermal snowboards made products for companies like 5150 & Joyride. The company was acquired in 1995 by RIDE, a publicly traded Company and then obtained by k2.  At that point, Robert was the VP of Operations.  In 1997 Robert left and started Avid Ink. He effectively built the company from one employee to over 250 and $24 mil in revenue.  This all from a 25k loan from his family! He successfully exited the company in 2015.

Today,  He is Founder and CEO of both Y7 Collective and his newly acquired company, Communities for Cause, a mobile app that works with local merchants and allows the merchants to give money to specific non profits chosen by the user. He is also Member of Tech Coast Angels, Orange County &  OCTANe's Launch Pad Panel.

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