52. Chris Mursau, Topgrading Hiring For Excellence, Interview Strategy, And The New PIP

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Chris Mursau can spot an A-player from miles away! Chris is the President of Topgrading, a market-leading company that helps organizations find A-players and hold onto them. He’s spent his career tackling the big intake questions and he shares that expertise with us.

Today, we discuss how to motivate and retain high performers, what you should and shouldn’t do in an exit interview and whether those personality profile tests are worth your time. Plus, we hear the eye-opening financial ramifications and cost savings relating to hiring wrong, or right!

Transcript

Chris Dreyer

We’ve heard the phrase time and time again, “I only hire A players” and while that might be true for some businesses, it’s notoriously tricky to really know. The hiring process has spawned a million blog posts that attempt to answer – successfully or otherwise – the questions we all have. What exactly does an A-player look like? And how the heck are you supposed to know for sure during an interview? luckily today’s guest is more than equipped to drop some truth bombs on us.

Chris Mursau

I’m sure all of the listeners can come up with one example where they hired someone, and probably multiple examples where they hired someone, who was really technically sound and really good at the job, but a jerk or maybe a real jerk. And, it’s detrimental.

Chris Dreyer

Today, we meet Chris Mursau, President of Topgrading, a market-leading company that helps organizations find A-players and hold onto them. We discuss how to motivate and retain high performers, what you should and shouldn’t do in an exit interview, and whether those personality profile tests are worth your time. That’s coming up on The Rankings Podcast, the show where founders, entrepreneurs, and elite personal injury attorneys share their inspiring stories about what they did to get to the top and what keeps them there. I’m Chris Dreyer, stay with us.
Topgrading has carved out a place of its own in the often confusing world of employee intake and it all makes total sense when you consider Chris Mursau’s background of business meets psychology.

Chris Mursau

Initially, going into psychology, I thought, hey, maybe I’d like to be a psychologist. And, the thought of two things: one, going on for four years to get a Ph.D. or right away and that was minor. The other was doing therapy and listening to other people’s problems all day. That prospect became a little bit less attractive the more I got to really know about it. And, so I, yeah, I really can’t tell you where the thought about, let’s maybe combine psychology and business came from, but somewhere in there. So actually I have a minor in business, in undergrad and that believe it or not connected to what I’ve been doing for the past 20 years. The guy who created Topgrading and had been doing it for a long time and had written several books on it up to that point. Brad Smart was a family friend and I read his book in college and thought, alright, this is really interesting. I didn’t even really know that kind of thing existed – figuring out who is the right person to put in an open position. Read the book and then, I thought maybe I’ll do this a little bit later. Believe it or not, sold cell phones for about a year and then decided to get an MBA and start an actual career.

Chris Dreyer

Nice. So, you already answered my question – on LinkedIn, it shows you went from BOOM you got your MBA and then the next thing you know, you’re the VP at Topgrading. So what happened in that year and how did you go straight to VP?

Chris Mursau

And now president! And the reason for going straight to VP was because, at that point, Topgrading was a pretty small company. It was largely me and Brad, we had a great assistant and then some other people that we passed work off to. So it was frankly in the early days, especially a little bit, or at least initially, to hide my youth. People would know about how old I was when you eventually talked with them and met with them but, we just figured it would help build a little credibility by being the vice president

Chris Dreyer

I wasn’t planning on going here but I think you’ve led me right to this next question. So many businesses are now doing the Gino Wickman traction thing, and Gino has the accountability chart and they really deemphasized titles. But just as you said, titles carry weight. If I put someone in sales, I’m not going to say a sales rep, it might say Director of Strategy or something … what’s your thoughts on that- the accountability and just the title itself and that credibility?

Chris Mursau

And so I’m somewhere in between, titles being extremely important and they’re not being important at all. I think it really lies somewhere in the middle because I’ve certainly seen inflated titles. When you mention someone as a sales rep, and in someone maybe titled sales executive, and you get them on the phone and you realize they’ve just been doing inside sales for a few months… You need to give them a little bit of thought and, I know we’ll probably at least at some point talk a bit about recruiting and for me, that’s where the titles really are important so that you’re attracting the right type of people and not the wrong type of people. So being thoughtful on those titles that you put on job postings, definitely. We talk to and work with our clients on that, thinking about what should that title be to attract the right level person.

Chris Dreyer

And I’m glad you just jumped right in there for the, with 20 years of experience and working with many businesses and evaluating their hiring processes and the success of a business, let’s jump right in and just focus on recruiting. So how much importance should a business place on the recruiting methods in terms of its overall business as a strategy?

Chris Mursau

If the leadership team or the leader of the business really believes that people are their most important resource or some phrasing of that idea. And I really do believe many if not most leaders do believe that it is extremely important to focus time on getting your hiring process right….as much time as you spend getting any other process in the business right. And on the flip side of that, as we are engaging with clients and with new companies and new firms, we see the opposite very often where hiring is a lot more of an afterthought than focused on as a strategic business process. And really for us, our overall goal at Topgrading to help our clients get the right people in the right jobs consistently, and part of that is getting hiring to be really focused on as a strategic business process, because it should be.

Chris Dreyer

I completely agree. And what comes to mind to me is, I’m a big NCAA college basketball fan, and every year their top players, their A-plus players go to the NBA. Imagine if you’re a business owner and your top players left you every single year and you didn’t have that setup! So what’s the potential cost of hiring the wrong?

Chris Mursau

In a word, astronomical, astronomical, and frankly, it really is astronomical. Whether your thinking about the cost of mishiring an entry-level person or an executive. Now the numbers are much bigger when you get to the executive level but it’s also expensive when we’re talking about your entry-level folks. Often your entry-level employees have the most contact with your clients or customers, in the entire company and so they’re the face of the company or the firm to your customers and clients. And so we need to really focus on that as well. What we’ve found, we’ve done research on this from top to bottom in an organization. And, in terms of making a hiring mistake at the lower level, we found that even let’s say cashiers in a grocery store, it costs about one time their annual compensation. So 1X their annual compensation when you get that wrong. And then moving up to the executive level, we found that on average, it’s about 24 times that person’s base salary. When you get the hiring decision wrong.

Chris Dreyer

That’s very extreme. I didn’t think it would have that big of an impact even from the bottom level. I can, I see it from the executives when they have a lot of direct reports and a lot of that thought leadership passes down. Let’s see, let’s talk about the tough situation, the business owners hired someone they’ve let these individuals kind of coast And they’ve got these C or D or whatever players. What’s your approach? Do you go through the PIP, the performance improvement plan or is it just, hey, they’re the wrong fit, see you later, let them free?

Chris Mursau

I’ll say it depends. And I’ll tell you what it depends on, at least from our perspective. I’ll say though, in terms of just overall, when you do fire someone or, help them move on to the next, next phase of their career. iI’s really important that it’s fair. And one thing that we do very unfairly when we hire someone new or move someone into a new position is we do let them coast and often we let them coast without really articulating what the expectations are. So they don’t really know, we’re not talking about those expectations, we’re not coaching them and giving them the support they might need to meet or exceed our expectations, and then, you know, what happens, you finally get frustrated enough and we bring a banker’s box in on Friday afternoon. And that is just, that’s completely unfair especially from our perspective. So what you ideally do is you do lay out those expectations and, we help our clients and our clients do create things called job scorecards where the performance that someone needs to deliver to be considered a high performer is clearly spelled out with very clear metrics. It’s very clear whether or not that person met or did not meet the performance expectations in an area. And just as importantly, we list the core values and, some firms have them, some firms don’t, but if you do, what are the core values? What does everyone need to exhibit to really be a good culture fit? And then there are, of course, a bunch of other behavioral competencies where someone needs to be excellent or at least okay to be effective in that role. So we put all of those things on the job scorecard and share that with that person say, here are your expectations. Ideally, we do that the first day they’re in that job so they know from the start, but if not we create the job scorecard and say, Hey, I should have done this a long time ago. Here are the expectations. Let’s talk them through. Let’s talk through where you might be meeting where you might be falling short. And that kind of acts as the basis of your PIP or your performance improvement plan, and then you talk about that consistently. After some time, one of a couple of things is going to happen. One, they’re going to be making progress. Two, they might say, hey, thanks a lot, wish you’d have done this a couple of years ago when I started, but I guess better late than never and they actually rise to the occasion. And then there are other times where you do certainly have the wrong person in the wrong job and you need to do something about it. It also depends on why they’re the wrong person, if they maybe don’t have the skill to do it, teach them, try it. And if they just can’t get there, give them a chance and give them some coaching. And then, yeah, think about giving them a fair severance when they do leave, because really it’s your fault, whoever you are, it’s your fault for making that hiring decision in the first place and offering them the job. I’ll say it in the other direction. if you have somebody doing something egregious make a decision that’s an obvious one. If somebody is doing something egregious, and if you have someone who is just not a good culture fit, maybe even toxic to the culture, you want to move on that person sooner rather than later, because they’re really doing damage and actually increasing the potential that you’ll lose other A players on the team.

Chris Dreyer

I think everything you just said there is gold and I’ll probably have to listen to that several times because there are just so many nuggets there. One of the things I love that you mentioned is the scorecard. It’s no longer “Chris the mean guy that doesn’t like me”. It’s, “here’s the objective data that says you’re not performing at the level that we need”. I think those decisions are easier.

Chris Mursau

Absolutely it makes it easier. Managing people might be easy for some, but it’s not easy for a lot of people. The job scorecard though does make managing others, especially managing performance and behaviors easier than it is without. Absolutely.

Chris Dreyer

So let’s switch over to the A-players in the broadest sense, tossing the softball up for this question. What is your definition of an A player?

Chris Mursau

So two components. One is they’re a high performer, so they deliver the results you expect a high performer to deliver. And the other part of the definition is that they fit your culture. So simply a high performer who fits the culture a little bit more technical, but believe it or not, an amorphous definition is someone who is in the top 10% of talent available for the pay. So for us, that actually for the pay piece, and if you want to put high performer for the pay, it’s really important because we’re not saying you have to pay at the top of the pay range for whatever that job is in the world or in the country. What we’re saying is to figure out what you can afford connected with your business goals and then get someone who is in the top 10% of talent available, willing to do the job for that amount of compensation.

Chris Dreyer

I love that. And then, one of the things I’ve heard and I wanted to just get your feedback on this, because I’m a little bit contrary and go against the common quotes that you’ve heard, but I kinda want to get your feedback on this. You’ve heard that all A-players always work for someone else. Or, when you’re hiring “don’t go to Indeed, don’t go to ZipRecruiter, the best players are already working for someone else”. Is that true? Is there some level of truth to that truth in that?

Chris Mursau

Chris, there’s certainly some level of truth to that. I’m not going to say it’s an absolute, but know, and now with COVID in a lot of cutbacks and some, industries like hospitality, having to cut to the bone and cut maybe far into the bone, meaning they’ve laid off a lot of A players. So in normal times, about 25% of the people who are in your talent pool available to do the job for that amount of pay, not saying they’re going to be a great fit, but they’re just willing to do the job that you have for them- about 25% are out looking for a new job at any given time. And, the other part of that though is somewhere between 60 and 80% of the people in that talent pool are willing to talk and listen about a new opportunity. And, yeah, so again, it’s not an absolute, but for us, as we’re screening candidates and interviewing candidates and looking at their backgrounds, being currently employed is certainly a green flag. In terms of whether or not someone might be an A player in their current role or not. And I’m not sure if you are going here but I will – and that is you need a way to get connected with those passive candidates. And what we’ve actually seen recently is there are in a lot of areas, where there’s a higher volume of people applying to job ads- whether it’s indeed or ZipRecruiter or companies career pages, especially the job boards though – but in that increased number of applicants, there’s a smaller percentage of people who are even qualified. So a lot of layoffs have happened. There’s a lot of people on the market but a lot of those people are sending their resumes or applying automatically based on some keywords in the job ads. And so it’s especially important now to have a way to connect with those passive candidates because A-players as well – and this is a bit of my educated guess on this, we don’t have any direct research – but I’m guessing that, people, A players who are currently employed and whose firm or company seems somewhat stable, might not be looking as much as they would have been maybe last January. They’re like, hey, I’ve got something that’s at least decent going on, the future looks pretty stable, I’m going to stay here. Even if they don’t like their job or, they’re maybe working a lot harder than they would like to, 80 or 90 or a hundred hours a week versus the 60 that they prefer to be working. They might be sitting tight and I think they are sitting tight right now versus out there looking and hoping that you have a newer, better opportunity for them.

Chris Dreyer

And I would completely agree with that, especially with the kind of uncertainty for many industries right now, even legal, most of our audience being personal injury attorneys when there are a lot fewer cars on the road, so there are a lot fewer auto accidents and, that just impacts everyone, in regards to that niche and that industry: let’s say you have a mid-management to maybe even a little bit more responsibility and you’re going through this process of trying to recruit an A player. And you’re just struggling to find one What’s should you do for that level of importance, is it just hold out until you get the A-player? Is it trying to groom the B player to become the A player? What’s your advice on some of these roles that require a lot more responsibility for the organization?

Chris Mursau

I apologize because a lot of my answers start with it depends… but it depends on the stage of the firm. I was talking to a startup this morning, they have two employees and they are looking to hire to potentially be the most important people in the company for the next several years. So those two people, those two new hires cannot be developmental candidates. They need to walk in the door being 97% competent and able to do the job. There might be a little bit that they have to learn, but in terms of the core of the job, they have to be able to do extremely well the day they walk in the door. So that’s one situation, another situation I was actually talking to that same, that same client, about another company. And this company has been on the best places to work lists like national lists for over 20 years. They have a wonderful developmental culture and they were looking to hire a new regional vice president. And this new regional vice president was going to have one of the longterm regional vice presidents, as a mentor, like a day or two a week. And so in that instance, they could hire a bit more of a developmental candidate because they had a leadership development and a really good mentor who was going to be focusing on this person going forward. So you need to be thoughtful about those variables. What do you need? What is your capacity as a coach and a mentor and a developer of people, and what resources do you have? And the fewer resources you have, the less time you have to coach and mentor the closer to perfect your candidate really needs to be. But one thing you said, really importantly, Chris, there are a lot of positions, right now, even where candidates for those roles are in extremely high demand. And so getting creative about the types of people that you bring in or how you get people into that role, especially mid-manager. I know it’s not a quick answer, but thinking about, let’s get people when they’re earlier in their career and hire them into a lower-level position and groom them for those mid-manager positions. It’s certainly something worth putting some time and effort into that as well.

Chris Dreyer

I was going to ask this to you, but I’ve always heard, hire for attitude over aptitude, but I think in your first example, maybe it’s the aptitude you’re looking for first.

Chris Mursau

I’m sure all of the listeners can come up with one example where they hired someone, and probably multiple examples where they hired someone, who was really technically sound, really good at the job, bit a jerk or maybe a real jerk in whatever way that’s being described. And it’s detrimental, it’s really difficult to get the return on those technical skills when all of the noise of a culture misfit is, covering that up and such. It will be extremely important for those two hires and then that startup to be really technically sound and also be a good culture fit for where they are. When your firm is at different stages your definition of an A player maybe a little bit different. And so where you were going with would we maybe accept someone who wasn’t a perfect culture fit, maybe just an okay culture fit if they had great skills and had grown businesses before and got them off the ground? Absolutely. We would consider that as long as they’re not extremely weak culturally to the point where they might be toxic.

Chris Dreyer

I think that’s a great point. And so let’s go to Topgrading. in what ways does Topgrading support, let’s say personal injury law firms who want to hire top talent?

Chris Mursau

We do that in several different ways – generally, in two big buckets, either one, we can actually help assess candidates for key roles doing really good job scorecards and then doing, we call them Topgrading interviews – that’s really the magic of the Topgrading process is a chronological and in-depth and structured interview that we do with the finalist candidates. Anyone has ever heard anything about Topgrading, so often it’s connected with a three or four hour interview and someone who is either going to maybe come in as a partner or be on a partner track, a little later in their career so they’re on a partner track and maybe very quickly going to get there, expecting to get there quickly it very well may be worth it there. It may be a great return on investment there because we’re really good insurance against making a hiring mistake. We do this for clients, our recommendations are about 90% accurate. When we say hire someone about 90% of the time, they turn out to be the A-player that everyone was expecting. Even us, experts, we don’t get it right 100% of the time because we’re still talking about people and there are a lot of variables there to get, but we can really reduce the risk there. And then, especially for, positions, a little lower in the firm, maybe your first-year associates and paralegals and such, we can teach you how to use our methods and use our software. And if you’re posting jobs, we have a neat little piece of software that helps screen those applicants down to those who are really qualified for the job. So you can focus on just the highest quality applicants, and we can teach you how to do that. So we have training, we tend to do a little bit of consulting and help get that hiring process and then maybe create a couple of job scorecards with you do some coaching interviews. And, we have clients, we actually have a bunch, 50 or so, case studies at this point where, with our help at the front often, and for smaller companies, just by getting some training and using the software, they’ve been able to achieve an 85% hiring success rate. That’s our punchline. And our goal really with Topgrading is to, 85% of the time, get an A-player into an open position.

Chris Dreyer

Absolutely. I love all that. And one other question, everyone talks about retrospectives and postmortems and all these things to continuously improve. This is one that we haven’t implemented and I wanted to get your opinion on this is the employee exit interview when they’re leaving. I’ve always – myself being an owner- and maybe it’s because I didn’t have the scorecard metrics for everything and I haven’t done it as well as obviously the Topgrading system. But, what are your thoughts on those employee exit interviews?

Chris Mursau

I’d recommend trying to do them when you lose someone and I would say especially when the person who was leaving is an A-player and you’re really disappointed that they’re leaving. Talk with them and figure out why. And, it might be a very, very good reason. It’s a better opportunity or, my spouse is moving and I need to go, I need to go with her. And, it could also be like, you know what, man, I thought I was going to have some advancement opportunities, I’ve been doing the same thing for five years and I’ve been bored for too. And the thing is, you have a higher probability of getting some good data. When your not A players leave, you never quite sure what mindset they’re in, whether they’re, they might just be looking to stick it to you or, looking at it through a little bit different lens than what might be accurate.

Chris Dreyer

That’s great advice there. So Chris answer, as we’re finishing up here, we got a three for three quickfire round, just questions in three minutes here. So the first question, what is your top search engine optimization tip, total curveball.

Chris Mursau

Oh, Chris. Unfortunately, you’re talking to the wrong guy. I know we’re doing it. I know we’re doing it. There are people for that, we do have a team, I know it’s going on and I apologize. I can’t even answer the question. I know what SEO is, but as far as tips. I’m the wrong guy to ask!

Chris Dreyer

But I think your answer was great: hire the right people, delegate and elevate. Okay, so next one. You’ll like this one. So which entrepreneur do you admire the most?

Chris Mursau

Which entrepreneur ..there are so many, there are so many, I’m going to give you a few. I know! I’m going to give you a guy who I admire for a couple of reasons, because he’s resilient and because he also knew how to put a team together. We never worked with Apple, but the way Steve Jobs developed products was directly in line with our philosophy. And we actually use a quote in presentations and it’s something to the effect of a small team of A-players will run circles around a big team of B and Cs. And we find it. We preach that to our clients.

Chris Dreyer

I love it. I love it. excellent answer. So the final question here. What’s the next thing on your bucket list?

Chris Mursau

Next thing on the bucket list …not that original, but I am really eager to get out to the mountains and ski this winter. And just crossing fingers that were absolutely we’re going to be able to, to do it. I missed it last year. Everything got shut down a little bit too quickly. And, so I am, I’m eager to get some fresh mountain there.

Chris Dreyer

Chris is an innovator in the world of intake. Some of the statistics that he shared about the financial ramifications and cost savings relating to hiring are truly eye-opening and I would recommend anyone interested to dive -n deep and to check out the Topgrading website where you’ll find a calculator that tells you exactly the cost of hiring wrong. It’s scary stuff.
You’ve been listening to The Rankings Podcast, I’m Chris Dreyer. A big thanks to Chris Mursau for joining us and you’ll find more information on our conversation in the show notes. And we want to hear from you, what’s your hack for verifying an A-player during interviews? Drop us a review and let us know. Thanks for joining us. We’ll see you next time.

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