Hidden Value: A 3-Part Approach to Hiring High-Potential Employees

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The renowned French economist, Jean-Baptiste Say, once described an entrepreneur as someone who redirects economic resources from lower-yield endeavors to higher-yield ones, essentially expanding the notion of entrepreneurship beyond its literal translation as “one who undertakes” to emphasize value creation.

For founders bootstrapping their ventures, the quest to maximize value with limited resources, especially when it comes to hiring, can be daunting. The allure of hiring seasoned C-level executives with impressive resumes and extensive LinkedIn profiles may be strong, but it’s often financially out of reach for smaller businesses. To overcome this hurdle, value-driven entrepreneurs must develop the skill of identifying talented individuals on the cusp of their potential blossoming.

These high-potential employees, often referred to as HIPOs, may not boast extensive CVs, making it challenging to assess their potential. Enter a three-part method developed by Chad Rubin, co-founder of Skubana, who successfully grew his company to $5 million in revenue with a team of HIPOs before selling it to 3PL Central.

Rubin criticized the conventional hiring process as “broken,” questioning how one can truly evaluate a candidate’s potential in a mere 45-minute interview. His innovative alternative comprises three key steps:

  1. Conceal a Hidden Treasure – Many young job applicants cast a wide net, applying for every available position. Rubin, however, sought individuals who displayed attention to detail and a genuine interest in his business and the specific role. To identify such candidates, he cleverly embedded an obscure request within each job posting. For example, he asked applicants to include their favorite ’90s band in their cover letter. Rubin’s aim was not to compile a music playlist but to discern who had meticulously read the entire job posting.
  2. Pattern Recognition – Recognizing that traditional interviews often fall short in assessing a candidate’s potential, Rubin turned to pattern recognition assessments to gauge their intellectual capabilities. He discovered an online puzzle that required candidates to identify patterns within a series of images, providing a reliable measure of their cognitive potential.
  3. Assess the Fit – Once satisfied with a candidate’s cognitive abilities, Rubin shifted his focus to evaluating how well they would integrate with his team. Rather than relying solely on standard interviews, he employed a Culture Index psychometric test to assess psychological attributes beyond IQ, enabling him to gauge their compatibility with the company’s culture.

Another valuable psychometric assessment to consider is the Kolbe A Index, which measures individuals’ instinctual approaches to action. Here’s a practical example of how to leverage a Kolbe score when hiring a manager responsible for daily operations, considering attributes rated on a scale from 1 to 10:

  • Fact Finder: 6-8 Evaluating how someone gathers and shares information, aim for someone who strikes a balance between thorough information gathering and avoiding analysis paralysis.
  • Follow Thru: 5-8 This category focuses on how candidates organize and design. Look for someone with a penchant for initiating systems, structure, and organization, scoring relatively high here.
  • Quick Start: 4-6 Assess how a candidate deals with risk and uncertainty, seeking a balance of risk aversion. Be cautious of scores too low (e.g., 1), as they may not align with an entrepreneurial company’s ethos.
  • Implementor: 3-7 This category delves into how candidates handle tangible aspects and spaces. Ideally, find someone in the middle who can maintain operations effectively and construct tangible solutions when needed.

This distinctive three-step hiring strategy, combined with effective assessment tests, will empower you to consistently recruit high-potential employees, even at the entry level, and unlock concealed value for your organization.