Dr John Sullivan JOHNS@SFSU.EDU HIRING INNOVATORS AND GAMECHANGERS Tools and Approaches to Hire From “Outside the Box” Best Practice Institute November 29, 2007 Dr. John Sullivan Professor, Author and Advisor to Management www.DrJohnSullivan.com Dr John Sullivan JOHNS@SFSU.EDU

Why innovation so important? Topics for today Why innovation so important? 6

HR isn’t meeting executive expectations The #1 people related issue of senior executives is? creating a high-performance culture… because of the business need for “a relentless focus on innovation, productivity, growth, and customer service” 79% rate it as #1 in a Deloitte/Economist Study of HR, 2007

There is a shift… from productivity to innovation Productive people install wires faster, with fewer errors Innovative people eliminate wires 8

Are innovators worth the effort? Topics for today Are innovators worth the effort? 9

Name the most innovative firms Google Apple IBM HP Microsoft Dell Nintendo

Innovative firms are more productive Average $160,000 IBM $260,102 HP $592,600 Microsoft $699,016 Dell $870,245 Google $1,056,000 Apple $1,169,594 Nintendo $2,500,000 ($440,000) It takes 10X more employees at IBM… to produce the same revenue as Nintendo

Better measures of workforce productivity! Good Revenue per employee – Good because the data is public and easy to calculate Profit per employee - $ of profit per employee (Dow Chemical $141,000 - $181,000) Better 3. Dollar of “Labor” cost per dollar of revenue – Better because not all firms pay employees the same (And some don’t count “other” labor) Best 4. Dollar of “Labor” cost per dollar of profit – Best because revenue isn’t the same as profit

Is it worth it to seek out an innovator? One top-notch engineer is worth "300 times or more… than the average" (Google) “would rather lose an entire incoming class of engineering graduates than one exceptional technologist” Alan Eustace, VP of Engineering, Google

most firm’s talent management processes… Is it true that… most firm’s talent management processes… routinely “reject” innovators?

Innovators are often overlooked or rejected Would your ATS reject this innovators application? R e j e c t e d Because he had a criminal record? 15

Innovators are often overlooked or rejected Would your ATS reject this innovators application? "This is the project that's going to remold Apple and 10 years from now, it's going to be a music business, not a computer business“ (Tony Fadell in 2001) R e j e c t e d Tony’s idea was rejected by numerous firms And…he had a major error in his projections 16

Innovators are often rejected Would your interview process reject these innovators? R e j e c t e d Larry and Serge Bad credit, idea rejected 10X and both are dropouts 17

Innovators are often rejected out of hand Would your reject these tech innovators? A l l w o u l d b e R e j e c t e d Gates Ellison Jobs Dell Zuckerberg What do they have in common? 18

What does an innovator look like? Topics for today What does an innovator look like? 19

Do you know how innovators differ from producers? Name your top producer and now… name your top innovator How do they differ? >

Innovators see things as… half empty or all empty Toyota – Presumption of imperfection Intel – Paranoia (Ex. Marathon behind the crowd) Google - “Maintain a healthy disregard for the impossible” 21 21

Innovators differ from producers Productive Innovator Are respected Are often dismissed (laughed at) On time & works late Thinks 24/7 Fixes broken processes Prevents breakdowns Likes things as they are Are impatient < 5% improvement target > 25% improvement target Makes others work harder Makes others re-think >

Innovators differ from producers Productive Innovator Is constantly asking why do we do it this way?” Asks a few questions Make a good effort Innovators are relentless Are inward focused Compares against #1… And then… aims ahead of it Any questions?

Shifting to recruiting approaches Topics for today Shifting to recruiting approaches 24

Features that attract innovators Bold or WOW actions are required Topics for today Features that attract innovators Bold or WOW actions are required 25

A strategy can help you attract “Maintain a healthy disregard for the impossible” Larry Page (Google Co-founder) 26

Attracting innovators Features that attract innovators Internal contests (MGM Grand) Pick/ bid on a project opportunity (Whirlpool) External contests > 27

Looking for talent through contests Used by Google, Yahoo, Sun, Intel and Microsoft 28

Looking for talent that never become employees First Prize - US$95,000, Nick Archibald, Managing Director, representing Fractal-Graphics Ltd.

Google - Android $10 million contest Online contests Google - Android $10 million contest 30

Free time attracts innovators Offers 20% time “The important thing is that it really let’s you say ‘No’ to your manager … From an employees perspective, under the rule.... “Nobody can tell you that you can’t experiment” Larry Page (Google Co-founder)

Attracting “gamechangers” Results Only Work Environment in Minnesota Pick your hours Pick where you work No in-person meetings required

Attract innovators with events that say... you are different! “Pajama day” at Google 33

Attract “brilliant minds” at public events 34

Attracting math innovators with a billboard

WOW website content can help attract innovators Our Dog Policy “Google's respect and affection for our canine friends is an integral facet of our corporate culture. We have nothing against cats, per se, but we're a dog company, so as a general rule we feel cats visiting our campus would be fairly stressed out”

How do you find/ source innovators? (Here are 8 innovative approaches to find innovators)

Sourcing innovators Referrals -- The # 1 way to source innovators is through proactive employee referrals Referrals work because innovators know other innovators Proactively approach current innovators and diverse thinkers… and ask them to find others >

#1 most effective tool - Referrals Referrals produced the highest volume Referrals produce the highest quality hire also Referrals vs. Ads (Restaurant) Referrals also have brand value

Benchmark firms and referral results (50+ %) Intel (71%) SG Construction (70%) Quicken Loans (68%) Best practice award winner Covenant Health (64%) Cisco Systems (62%) “Friends” began the 2nd gen. FirstMerit Bank (56%) The Turner Construction Corporation (56%) Booz Allen (52%) Best practice award winner Northrop Grumman Space Technologies (52%) Symantec (51%) The MITRE Corporation (50%) HSBC Bank (50%)

Pro-active referrals are superior Proactively seeking out targeted employees is clearly a superior approach Here are the 3 most effective proactive tools - Reference referrals - Give me 5 - Ask new hires

Pro-active referrals – Try reference referrals 1. Reference referrals for innovators Identify top performing/innovator hires from last yr Call the references that said accurate things Thank them Ask them “do you anyone else as good?” Ask them to be a future reference source Hire the references themselves

Proactive referrals – Give me 5 Uses “give me 5” proactive referrals

Pro-active referrals are superior 2. Give me 5 – Proactively approach top people Best manager you ever had Best team leader Best idea person or innovator/ out of the box thinker Best person that "ran into" burning buildings Best problem solver Best customer service person Best student in college that was so smart Best mentor Best technical skilled person Best international talent Best sales person that beats you Best replacement for "you" when you’re promoted

Pro-active referrals – Ask new hires 3. Ask new hires during orientation On their first day, ask new hires from "target" companies (or all firms)… "who else is good there?” They should also be asked “who looks good but isn’t” And ask them for… innovators, managers, and "up and comers"?

Some other referral finding tools Note: Be careful of the 78% of all referrals that are “a stranger approached me” referrals

Referral tools Ask top applicants during the interview Ask them to identify top performers to show their industry knowledge Be sure and invite candidates from benchmark firms in… for interviews

Referral tools Name only referrals Reward your employees and recruiters for capturing the names of top performers (as opposed to just rewarding them for actual resume referrals). Continually develop a "Who's Who" list within your industry (Cisco) Call when your database gets a “duplicate” referral

Referral tools Ask employees who attend outside training/ education to make referrals Ask attendees to identify top performers in.. Certification programs Degree programs Teach the class

Sourcing innovators The # 2 best way to source innovators Contests and awards Hold on-line contests Seek out award winners … An example >

Contests find the names of the very best

Sourcing innovators The # 3 best way to find innovators Professional events - Ask employees that attend to seek out innovators Technology events - Web 2.0, bloggers events, robot competitions, open source projects Calculated risk taking – Rock climbing clubs, mountain climbing groups and poker groups Innovative and future oriented - inventors clubs, improv comedians, jazz musicians, entrepreneurs club, Star Trek conventions, “future” and space groups

Sourcing innovators The # 4 best way to find innovators Boomerangs (Ex-employees) Keep in touch with top performers that left the company and re-recruit them (McKinsey, Deloitte, E & Y) Also ask them for referrals

Sourcing innovators The # 5 best way to find innovators Utilize new media – Because “they” use… Facebook MySpace Podcasts Blogs and RSS feeds Videos - Moving pictures vs. 1000 words >

Video’s sell innovators Videos tell convincing stories Use YouTube Recruiting (An inside look at Google) (Has over 500,000 views) 55

Innovators in a virtual world Bain, HP, IBM, e-bay, Verizon & Microsoft use SecondLife and “avatars” to assess and recruit Hyro hired 30 in 2 months in 2007

The US Army recruits within a video game J&J, Deloitte, British Navy & MITRE (Job of honor) have used games

The # 6 best way to find innovators Sourcing innovators The # 6 best way to find innovators Utilize green recruiting – because those on the edge have been “green”/ sustainable for years http://www.graduates.toyotajobs.com/html/about_vision.asp

Sourcing innovators The # 7 best way to find innovators Market your commitment to innovation Change the job description and recruitment materials and ads to include innovation Add examples of innovation to your web site WOW them because the Web info validates what they have already heard >

Web information attracts innovators (Google) Web content attracts Web information attracts innovators (Google) “Thinking beyond the norm is expected, no matter what position you happen to hold “Innovation is our bloodline. Even the best technology can be improved. We see endless opportunity to create even more relevant, more useful, and faster products for our users” 60

Sourcing innovators The # 8 best way to find innovators Look in other disciplines (Parallel benchmarking) Look outside your industry/ major SW Air turn around speed EDS math/ music Hallmark – Musicians and poets (Lyrics) - Google – I estimate that 20% of hires come from liberal arts schools (India) >

How do you identify innovators during the resume screening process?

Resume screening Screening   Look for crazy resumes -- Innovative individuals may offer anything from poems and DVD’s, to hard copy or even web portfolios Designate someone to “champion” applications from potential innovators Periodically "test" the system with outside the box resumes

Look for these key words Innovation Created New Idea Creative Resume screening - ATS Look for these key words   Innovation Created New Idea Creative Imaginative Inquisitive Novel Patents and copyrights Advance Quantum leap Inflection point Insight Groundbreaking Changed the DNA Discovery Award-winning Breakthrough 64

How do you identify innovators during the interview process?

Be careful/ don’t over react Interviews Be careful/ don’t over react When presented with a problem during interviews… innovators and game changers are likely to… infer that your current approach is ”dated” or even say it’s silly 66

Give them real problems Assessment Give them real problems Interviewers at Google and Microsoft give interviewees real problems Toyota puts them on an actual assembly team Give them their “1st month’s” problems 67

IT’S TIME TO THINK OUTSIDE Innovators think differently IT’S TIME TO THINK OUTSIDE Inside the box = 99% Outside the box approaches = 1% Look for individuals that provide solutions that stand out from the 99% 68

Drop “fit” as an assessment criteria Fit doesn’t mean that someone can’t do the job it’s a subjective assessment of whether they “fit” the department or firm If you want innovation, look for people that actually do not fit perfectly! 69

Other steps

Screening Improve the interview The interview process must be "tolerant" and inclusive (i.e. expect some craziness) The interview must allow applicants to show their innovation/ outside the box thinking Include innovative employees to excite candidates and to more accurately assess Innovative ideas should be captured

Improve the candidate experience Other action steps Improve the candidate experience Most hiring processes are just plain ugly Many judge the innovativeness of your screening process as an indication of your company's actual state of innovation (and might drop out) 72

That see “empty glasses” everywhere Lessons to be learned To identify innovators… look for people That see “empty glasses” everywhere That offer solutions that vary from everyone else’s That aim ahead of where the best are now

Did I make you think? How about some questions (or e-mail me at johns@sfsu.edu) Hundreds of articles on all aspects of HR by Dr. Sullivan can be found at… www.drjohnsullivan.com 74