Make sure your people have character and are capable. The person who is capable but doesn’t have good character is generally destructive, because he or she has the cleverness to do you harm and will certainly erode the culture. In my opinion, most organizations overvalue the abilities piece and undervalue the character piece because of a shortsighted focus on getting the job done. In doing so, they lose the power of the great relationships that will take them through both good and bad times. Don’t get me wrong, I’m not saying that you should compromise capabilities for character. The person with good character and poor abilities also creates problems. While likeable, he or she won’t get the job done and is painfully difficult to fire because doing so feels like shooting the loyal dog you can’t afford to keep anymore, but he must go. Ultimately, what you need in the people you work with are excellent character and excellent capabilities, which is why it’s so hard to find great people.
Don’t hire people just to fit the first job they will do; hire people you want to share your life with. Turnover is costly and inefficient because of the time it takes for people to get to know each other and the organization. Both the people you work with and the company itself will evolve in ways you can’t anticipate. So hire the kind of people you want to share a long-term mission with. You will always have uses for great people.
Look for people who have lots of great questions. Smart people are the ones who ask the most thoughtful questions, as opposed to thinking they have all the answers. Great questions are a much better indicator of future success than great answers.
Show candidates your warts. Show your job prospects the real picture, especially the bad stuff. Also show them the principles in action, including the most difficult aspects. That way you will stress-test their willingness to endure the real challenges.
Play jazz with people with whom you are compatible but who will also challenge you. You need people who share your tastes and style but who can also push and challenge each other. The best teams, whether in music, in sports, or in business, do all those things at the same time.
When considering compensation, provide both stability and opportunity. Pay people enough so that they’re not under financial stress, but not so much that they become fat and happy. You want your people to be motivated to perform so they can realize their dreams. You don’t want people to accept a job for the security of making a lot more money, you want them to come for the opportunity to earn it through hard and creative work.
Pay for the person, not the job. Look at what people in comparable jobs with comparable experience and credentials make, add some small premium over that, and build in bonuses or other incentives so they will be motivated to knock the cover off the ball. Never pay based on the job title alone.
Have performance metrics tied at least loosely to compensation. While you will never fully capture all the aspects that make for a great work relationship in metrics, you should be able to establish many of them. Tying performance metrics to compensation will help crystallize your understanding of your deal with people, provide good ongoing feedback, and influence how the person behaves on an ongoing basis.
Pay north of fair. By being generous or at least a little north of fair with others I have enhanced both our work and our relationships and most people have responded in kind. As a result, we have gained something even more special than money in the form of mutual caring, respect, and commitment.
Focus more on making the pie bigger than on exactly how to slice it so that you or anyone else gets the biggest piece. The best negotiations are the ones with someone in which I say, “You should take more,” and they argue back, “No you should take more!” People who operate this way with each other make the relationship better and the pie bigger, and both benefit in the long run.