This article originally appeared in Echoing Green.
Over the past five years, I have traveled the country talking with top-performing social entrepreneurs to learn about the secrets of successfully scaling an organization, as well as the leading causes of failure. When I asked over 250 nonprofit leaders to describe their biggest mistake, by far the most prevalent answer was hiring the wrong people. In interview after interview, they told me they’d had no clue how to make hiring decisions.
The costs are staggering. Research shows that the average cost of a single bad hire for a nonprofit is tens of thousands of dollars.
As business management guru Jim Collins wrote in "Good to Great", the first step in organizational success is “getting the right people on the bus.” But how? The successful leaders I interviewed shared these five vital lessons they learned:
1. Map out a multi-year hiring strategy.
Use your strategic growth plan to carefully consider your personnel needs not only in the present, or the next six months, but for several years to come. This gives you lead time to identify superior talent and assure you have the right skills at the right time.
2. Hire senior leadership early.
The organizations I studied that scaled the fastest hired senior leadership personnel, such as a chief financial officer or director of technology, at an earlier stage of growth than most other organizations. Too many leaders think this is putting the cart before the horse, when, in fact, this frees up a leader’s time to focus more on fundraising and strategic planning, and that propels faster growth.
3. Test skills in action.
Rather than relying only on interviewing, ask candidates to produce some work, such as a proposal for a fundraising strategy, or to make a presentation to your management team, which allows you not only to evaluate the actual quality of their work, but to tap the expertise of your team in making the decision.
4. Ask a key "culture add" question.
A good fit involves not only skills but whether a candidate will thrive within your culture. Take the time to define the underpinning values that make your organization tick. It is a good exercise to understand your culture, and when it comes time to hire, you can see what a candidate brings that can add to and continue to shape your organization. Many leaders I interviewed told me they always ask a particular question that helps them evaluate what their candidates value. For example, Kiva, the crowdfunding platform for global microenterprises, asks every employee “how many bad days a year do you have,” to sort through candidates who tend to be optimistic. Kiva has a very positive work environment, so they want employees who show up to work happy.
5. Fire quickly.
Mistakes are inevitable. You must recognize them and correct for them with alacrity. This is a hard truth for many nonprofit leaders, who tend to think of their staff as family. But keep in mind that when people are not performing well, they are usually relieved to move on, and poor performers put an undue burden on the rest of your team, who must compensate for their shortfalls. Quick action makes the outcome less painful for everyone.
Great organizations are comprised of great teams. The more astute a hirer you become, the more remarkable team you will build, and a great team can exceed even your greatest ambitions.