French economist Jean-Baptiste Say characterized an entrepreneur as one who “shifts economic resources out of an area of lower productivity and into an area of higher productivity and greater yield.” This expands the term’s literal translation from the French for “one who undertakes” to include the concept of value creation.
Enterprising founders epitomize the principle of creating more value with less resources, particularly when hiring. While it may be tempting to try and hire C-level executives with extensive resumes and impressive LinkedIn profiles, smaller businesses usually cannot afford such seasoned professionals. To combat this, value creators need to develop a knack for hiring talented people about to blossom.
High Potential Employees, or HIPOs, might have thin resumes—but spotting their burgeoning talent allows you to create significant value that others overlook. This is challenging to do well since most HIPOs have limited credentials for you to evaluate.
Here’s a three-part process for spotting HIPOs, developed by Skubana co-founder Chad Rubin, who built his company to $5 million in revenue with the help of a team of HIPOs before deciding to sell it to 3PL Central. Rubin criticized the traditional hiring process as “broken.” How can you evaluate a candidate’s potential in just a 45-minute meeting? Rubin’s alternative solution comes in a three-part approach:
1. Hide a Golden Egg
Many young candidates apply for any (and every) job they come across, but Rubin sought detail-oriented applicants who took the time to understand his business and the specific role. He embedded an obscure request within each job posting to identify those who had read it in full. For instance, he asked candidates to include the name of their favorite ’90s band in their cover letter. Rubin’s intention wasn’t to compile a new playlist; he wanted to see who had read the entire posting.
2. Pattern Recognition
Aware that traditional interviews wouldn’t suffice to gauge a candidate’s potential, Rubin turned to pattern recognition assessments to evaluate their intelligence. He discovered an online puzzle that required candidates to recognize patterns in a set of images, and he found this to be a reliable measure of their intellectual potential.
3. Measure the Fit
Once satisfied with their cognitive abilities, Rubin aimed to gauge how well a candidate would mesh with his team. Instead of relying on a conventional interview, he used a Culture Index psychometric test to assess psychological attributes beyond IQ, thereby measuring their fit within the company culture.
Another psychometric assessment you can leverage is the Kolbe A Index. It measures the ways people instinctively take action and is a great barometer to use when evaluating the value that new employees will bring to your business.
Let’s walk through a concrete example of how you can use a Kolbe score to assist your hiring process. If you need a manager who will run the daily operations of your business, here’s what to look for on the four attributes Kolbe measures, on a scale from 1 to 10:
This attribute measures how someone gathers and shares information. For someone running the day-to-day operations of your business, look for the sweet spot of someone who gathers a lot of info before taking action, without succumbing to analysis paralysis. Here are some questions that might help you assess that skill:
- Can you describe a situation in your previous role where you had to gather and share a significant amount of information before making a decision or taking action? How did you ensure you had the necessary data, and how did it impact the outcome?
- Give an example of a project where you had to balance between conducting thorough research and avoiding analysis paralysis. How did you manage this balance, and what was the result?
- In a day-to-day operational role, how would you approach the process of gathering information and sharing it with your team to make informed decisions efficiently?
This category focuses on how candidates organize and design. You want someone who initiates systems, structure, and organization, so he/she should score relatively high here. Questions you might pose to assess follow through are:
- Tell me about a time when you were responsible for organizing and designing a complex project or system. How did you go about initiating the necessary structure and organization? What challenges did you face, and how did you overcome them?
- Describe a situation where you had to implement processes or systems to improve efficiency in your previous role. What was your approach, and what impact did it have on the organization’s operations?
- In a role that requires attention to detail and organization, how do you ensure that you maintain a structured and systematic approach to your work, especially when faced with tight deadlines?
This one’s about how a candidate deals with risk and uncertainty. Look for someone with a healthy dose of risk aversion. Watch out though, because if they score too low, say a 1, they might not be a fit for an entrepreneurial company.
- Can you provide an example of a project where you had to make decisions in an environment of uncertainty and risk? How did you assess and manage the risks involved, and what were the results?
- Describe a situation where you needed to adapt quickly to changing circumstances or pivot your approach to meet unexpected challenges. How did you handle this, and what did you learn from the experience?
- In an entrepreneurial setting, how do you strike a balance between taking calculated risks and maintaining stability? Can you provide an example from your past experience where this balance was crucial?
This last characteristic covers how a candidate handle space and tangibles. Ideally, you’ll find someone in the middle who is able to keep things working the way they should, and construct practical solutions when needed. Consider posing these questions in the interview:
- Give an example of a project where you had to manage physical resources or oversee the implementation of a tangible solution. How did you approach this task, and what challenges did you encounter during the process?
- In a role that requires hands-on problem-solving and the ability to construct practical solutions, how do you ensure that you meet the practical needs of the organization? Can you share an instance where your implementation skills had a significant impact?
- Describe your approach to maintaining and optimizing physical systems or processes. How do you ensure that everything works as it should, and how do you handle unexpected issues that arise?
This unique three-part hiring strategy, paired with these effective assessment tests, will empower you to consistently recruit high-potential employees—even when they’re entry-level—and unlock hidden value for your organization.