Why Performance Beats Pedigree with Lou Adler

Most companies say trust matters, but when they run interviews, they only evaluate skills and polish. They focus on what candidates have rather than how they operate. And when you hire that way, you get predictably unpredictable results.

Lou Adler has spent over 50 years studying the difference between people who elevate an organization and the people leaders end up managing around. He's examined thousands of hires across roles, industries, and eras, and he keeps seeing the same 12 behavioral traits in every top performer. Those traits might also be the strongest predictors of trust on a team.

This is episode 100, and we're giving you a practical roadmap for hiring people who make the company better the moment they walk in the door.

What You'll Learn

Why recruiting feels broken:

• AI didn't break recruiting, it exposed it
• The system is optimizing funnels while ignoring clarity
• We're recruiting for static experience in a dynamic environment
• The best candidates aren't in funnels at all

The fundamental shift in how to hire:

• Why a job description listing skills is stupid
• How to define work as performance objectives, not person requirements
• The difference between screening for credentials vs. outcomes
• Why doing the wrong thing faster is still stupid

Lou's performance-based hiring method:

• Start with what a person needs to do, not who they need to be
• Define 4-5 key performance objectives (KPOs) for every role
• Test for excitement about the work, not excitement about getting the job
• Solve for motivation (the N factor) alongside ability

The 12 universal traits of top performers:

• Being proactive, seeing the big picture, understanding and influencing people
• Why ownership beyond boundaries predicts success
• How to assess traits that matter more than technical skills
• The importance of volunteering for things over your head

The hiring formula for success:

• Ability to do the work + Fit factors = Success
• Fit drives motivation (raised to the power of N)
• How to dig 5-6 layers deep into accomplishments
• Why you need evidence, not opinions, before making an offer

Key Quotes

"A job is stuff that people do. What you've defined is a person doing a job. Let's forget the person and let's define the work."

"Doing the wrong thing faster is stupid. If you're producing bad widgets, stop producing bad widgets. But in HR, we say, do you have any more bad candidates I can interview?"

"HR should throw away the existing hiring process and build it from scratch. They wouldn't do anything they're doing now."

"The ability to do the work is actually the easiest part to measure. Understanding performance o

Transcript

Do not approve a requisition unless it’s written with a series of performance objectives. And the question starts, what does this person need to do to be considered successful? Have a minimum of four or five performance objectives, KPOs, key performance objectives, that define the task, the action, the result, and some metric of success.

Hey there, senior leader, and welcome to the Talent Sherpa Podcast, where senior leaders come to think and rethink how human capital really works. And I want to welcome everyone to episode 100. I’m your host, Jackson Lynch, and I’m joined today by Scott Morris, former CHRO, former pilot, spiritual guru, and the founder of Propulsion AI.

And today we’re going to get into something that sits right at the heart of execution, culture, and leadership credibility. We are talking about trust, and specifically how to hire for it.

Now, most companies say that trust matters, but when they run interviews, they only evaluate skills and polish. They focus on what candidates have rather than how they operate. And when you hire that way, you get predictably unpredictable results.

Our guest today has spent over 50 years studying the difference between people who elevate an organization and the people leaders end up managing around. His name is Lou Adler. He needs no introduction, but he has examined thousands of hires across roles, industries, and eras, and he keeps seeing the same 12 behavioral traits in every top performer. And the wild part is this: those traits might also be the strongest predictors of trust on a team.

So settle in, because this conversation is going to give you a practical roadmap for hiring people who make the company better the moment they walk in the door.

You know, I still can’t believe that Lou agreed to come on with us. Lou started me in recruiting. His methodologies have shaped everything that I’ve done. I’m really excited to have this conversation.

But before we dive in, do us a favor. If you’re enjoying this pod and the content that we create, please hit the subscribe button right now. Leave us a comment, or drop us a quick review on your preferred platform. That’s not only how we keep the pod sharp, it’s how we grow it. It’s how you help share it with others.

And check out the CHRO Chronicles. They are now available at mytalentsherpa.com. It’s a weekly newsletter written by CHROs for CHROs, and it arrives weekly in your inbox. I think I’m right on this, there’s been a really overwhelming response so far. So if you’re ready to level up your impact, you can do it, only 30 bucks a month.

Now, let’s dive into the state of play here, Scott. Recruiting feels like it’s broken in many companies, many that I’ve been a part of, and some leaders don’t even realize it yet. As a recent candidate in the market, I can attest that it feels that way for folks looking for their best fit.

On the surface, things look fine. Roles are posted, candidates apply, AI screens resumes faster than humans ever could. Time to fill looks acceptable, if that’s a good measure for you. Dashboards are green, the machinery is running. But underneath, the system is misaligned with how work and workers actually operate now.

And that’s because there’s been a redistribution of the work. We’ve entered an agentic workforce era. High performers don’t wait anymore to be processed. They evaluate employers the same way employers are evaluating them, and they move laterally. They build portfolios, they consult, they functionalize, they learn continuously. They are not looking for permission. They’re looking for leverage, meaning, and momentum.

And a lot of recruiting systems, I think it’s the honest truth, are still built for compliance. They’re not built for choice.

Yeah, and AI didn’t break recruiting, it exposed it. When AI is layered into weak role definitions, shallow intake conversations, backward-looking job descriptions, all it does is accelerate bad decisions. Faster screening of the wrong criteria does not improve outcomes, it just multiplies error.

That is the real fracture point, for certain. Most companies are still recruiting for a static experience in a dynamic environment. They are searching for keywords, which gets blamed a lot on artificial intelligence. It’s not. Same technology we’ve had for a lot of years.

But screening for keywords isn’t addressing the fact that the work is changing faster than resumes can capture. The systems we have are optimizing funnels while ignoring clarity. And I honestly think they are confusing efficiency with effectiveness.

And meanwhile, the best candidates are not in funnels at all because they are completely managing around the system.

So today we’re going to take a really hard look at the state of recruiting with our guest, Lou Adler. Lou has been one of the most influential voices in modern recruiting because he challenged how hiring actually works, and then he rebuilt it around performance.

He doesn’t really need an introduction, but we’re giving him one anyway. He began as an engineer and a manager, not as an HR academic. And since that’s my background, I’m excited to talk to another of a very, very limited group.

Lou, I just want to say how happy we are to have you join us today.

Great, thank you. Excited to be here and challenge the thinking of the HR industry in general, and maybe globally in particular.

Lou, your performance-based hiring is a method that starts with outcomes, not credentials. And instead of screening for skills and pedigree, it defines what success looks like.

You absolutely launched me into thinking differently about recruiting. And I should have looked it up before we got in here. When did you start performance-based hiring?

I would say performance-based hiring started with my first search assignment in 1978. And the day before I became a recruiter, I was running a factory with 300 people in it. And I just didn’t like the corporate politics.

I actually gave my notice six months earlier and said, I’ll turn around the factory, I want my bonus, and I’m leaving. And they tried to keep me, but I left anyway. I just didn’t like the corporate politics.

And my first search assignment was for plant manager. And quite frankly, it seemed obvious. The president of the company, whom I knew, had a company building automotive products. He said, I’m looking for a plant manager. And I said, okay, what are you looking for?

And he gave me a job description, 10 years of this, five years of that, have to have an engineering degree, all the typical stuff. And not being an HR person, I said, that’s stupid. This is not a job description. A job is stuff that people do. What you’ve defined is a person doing a job. Let’s forget the person and let’s define the work.

And he said, wow, that’s kind of odd. I said, doesn’t seem odd to me. And he said, I’ve got to have someone turn around a factory.

He said, fine, let’s walk through the factory. We spent two hours, found six or seven things to turn around, and I said, I’ll find somebody who can do that work. Don’t tell me, I said, I will not compromise on the work. I don’t know if the person needs five years or twenty years. I don’t know if the person needs to be outgoing or not. All I do know is the person has to turn around a factory, and he probably turned around a similar factory in the past. I’ll find a person who could do that.

I have never used a job description since then that lists skills. I always say, what does a person need to do? And I’ve probably done it 3,000 times since then.

I did it the other day with people building models for large-scale construction projects. What do they do that makes them successful? It’s not the skills, it’s what they do with their skills, their attitude, and all that stuff. So that’s how I started.

You built on that with your book, Hire With Your Head, which is now the standard reading for leaders who want to hire with fewer regrets.

And the bottom line for me, learning from you over these years, is that excellence is predictable, trust follows behavior, and hiring improves when leaders stop guessing what good looks like and start defining it.

All of these are topics that Jackson and I have talked about in our first hundred episodes, and that’s why we’re so excited to have you here.

I’m happy to be here. But I will say, the practicality of it sounds logical. What does a person need to do? But to figure out if a person has done that, and to get a hiring manager to find that, that’s where the rubber hits the road.

It sounds easy and logical, but it’s hard to implement. If you’re in a hurry to hire somebody, people say, no, as long as he’s got 10 years of this, and I’ll know him when I see him. That’s the reality. Implementing the methodology is where the challenge is.

I think AI can do a better job than it had been, but that’s still a challenge. I, as a recruiter, could do it because I controlled the process and my income was on it. And I took it more seriously than hiring managers, which I find interesting. They just want to get the job filled and they’ll live with the consequences.

So I think there’s a lot that goes between the idea and the implementation and success. And I think that’s really a key issue that needs to be addressed.

You heard us talk about recruiting being broken. Is it broken as a system, or are we trying to run a 20th-century hiring system in an agentic, AI-accelerated labor market?

Yeah, I think HR doesn’t actually know what AI is and what agentic is. I think it’s what AI can do for you, not the fact that it’s agentic. Who cares?

And I think Jackson said it at the opening, doing the wrong thing faster is stupid.

I have a background in manufacturing. If you’re producing bad widgets, any factory person would say, stop producing bad widgets. But in HR, we don’t do that. You say, do you have any more bad candidates I can interview? Do you have any more? Let’s do that faster.

So my mind is, HR should throw away the existing hiring process and build it from scratch. They wouldn’t do anything they’re doing now. They wouldn’t post boring jobs, they wouldn’t build skills-based job descriptions, they wouldn’t listen to every leader and follow the leader like little minions going after everybody else.

They would say, let’s redesign the system.

So I just wrote an article over the weekend called Kanban for Hiring. Kanban is a pull-through system. And you look at how good people get hired.

I place a lot of good people, and the only way I place them is I got to know them before I ever placed them. I spent time building deep networks.

And then I said, okay, I know someone, I’ve known them for two to three years. I think they could handle this job. So when I presented them, I wanted my client to spend a lot of time with the candidate to get to know them.

So number one, you have to know the job. You have to know the person. You have to understand what’s driving that person, what’s driving that company.

And I think that’s where AI can do that now. What I just described is very labor intensive. You can do 90% of that with AI.

It’s redesigning the entire system, getting to know the job and getting to know the person and getting to know the situation and bringing it all together. That, to me, is how AI should be used.

Yeah, and even as we pull back from that a little bit, one of the conversations I have regularly with the CHROs I coach and companies that I’ve supported is, what are our ramp-up expectations?

Do you expect a person in this role to be able to hit the ground running in six weeks or six months? The answer changes the depth with which you’re trying to hire. It changes how you think about compensation. It changes how you think about the onboarding experience. And it probably should change how quickly you make a change once you realize you made an error.

If I’m hiring someone with a six-week ramp-up, I’m going to lean into someone who has done this before at scale. If I’m looking for someone who I can grow over a couple-year period into that role, then the specific experiences are less important, but the learning agility and the ability to apply learnings become even more important.

In your experience, how important is the definition of role clarity in step one in the chain of events? And how do you help us and our listeners think about doing that more effectively? Because to your point, it sounds easy, it’s really important, but it’s pretty hard to achieve at scale.

Well, I think your point is exactly right about experience.

I remember I was presenting to CEOs and somebody said, well, how much experience does a person need to have for this job? I said, I don’t know. You’ve got to tell me what the work is, and then I’ll tell you how much experience.

It doesn’t matter, they have to have enough experience to do the work. A dumb person needs lots, a smart person needs less.

I tend to have this New York approach, as you can probably tell pretty quickly. I grew up in the Bronx, and I actually got kicked out of the Bronx, so that’ll tell you how bad I was. If you get kicked out of the Bronx, you gotta be pretty wild.

So go back to your point about ramp-up. If someone’s got to come in and turn around a factory right away, they better have great experience doing that. On the other hand, if they can learn and develop, they have a learning curve.

But they have to have enough experience to do the work, would be my summary.

I wanted to see if we could pick your brain on the single truth about recruiting. You opened something up that’s so simple, and yet most companies don’t do it.

Is there a single truth about recruiting that is so obvious, and yet we don’t do it?

Yeah, I’d say there’s two.

Let’s assume one person is the client and the other is the candidate. I would say, never do this before you make an offer, irrespective of anything else.

I’m making an offer to a candidate, and I say, are you aware of the, forget the money for a minute. We’re going to make you an offer. Forget it. It’ll be a competitive offer, but forget it.

Why do you want this job? Why does this job represent a career move?

And if you can’t explain the work you’re doing, who you’re doing it with, why our company makes success possible, the resources you’re going to get, how you’re going to plan it, why it’s successful, and why it’s intrinsically motivating to you, I wouldn’t make the offer, because that’s going to be problematic.

Conversely, I’m going to ask the hiring manager, you want to hire this candidate, why? Is the candidate aware of the performance expectations of this job, and if so, why do you think this person is qualified to do that work?

So the single point of truth is job clarity.

If the candidate doesn’t know it, and it’s not just knowing the performance objectives, it’s, what’s the plan? What are the resources? How much time do I have? Who are the people on the team? How much flexibility do I have to build the team and make it happen?

If the candidate doesn’t know that, it’s random luck if they’ll be good or not.

Sometimes the situation is bad. Even though you know it’s bad, you can’t deal with it.

All of those variables are hard to measure in an interview. The ability to do the work is actually the easiest part to measure. Understanding performance objectives is pretty easy. But putting all that together takes time.

So I don’t know if it’s a single point of truth, but it’s clarity around the real role and the circumstances.

But the way you test it is, why do you want this job? Forget the money, why do you want it? And if you can’t describe it clearly, you’re rolling the dice.

One of the things that facilitates that is if you’re focused on outcomes rather than tasks, it’s a lot easier to hear the answer the candidate gives and match it to what drives the outcomes we need.

One of the things I think is still true today, there seems to be this push and pull. Even CHROs that want to lean into what the three of us are talking about, the lawyers are still sitting on the side saying, you’ve got to be able to document your intent, you’ve got to be able to hire for the job right in front of you.

My view is we’ve got to be thinking, we’re going to hire them into a job today, but are they going to be able to pivot into the job we don’t know we’re going to give them in the future?

If that is a good train of thought, how do you advise human capital leaders to strike the balance between what you’ve got to hire for today and the capabilities you want to hire for tomorrow?

Let’s think about the root cause of what you just said. The root cause of that problem is because HR people are compliance driven and risk averse. So they use the excuse of a lawyer.

I am not compliance driven or risk averse.

In the early 90s, CEOs were asking, is performance-based hiring legally compliant? So I talked to the number one labor attorney in the United States and had him read my book. The guy’s name is David Goldstein at Littler Mendelson. If HR folks know Littler Mendelson, you know they’re the number one labor firm in the United States.

I said, is performance-based hiring legally compliant? He said it’s not only legally compliant, it’s far better than what HR people do.

A skills-based job description is subjective. Where’s the proof that a person needs 10 years experience? There’s no proof. You didn’t do a study. You get a smart person in five years, they can do that work.

But if the work is build a system to accomplish task A, B, and C, he said, of course that’s defensible. And I could defend that much easier than I can defend 10 years’ experience.

But you have to focus on wanting to do something, not wanting to not do something, which is what HR people do. Oh, I got to protect the status quo. I can’t take risk.

So their general nature is risk averse. And when you’re risk averse, you look for things to prove you’re right. When you’re risk oriented, you say, no, I’m going to look for things to prove I’m right.

And I did that, and I proved it right. I got this white paper. I had to pay $10,000 for this white paper and for him to read my book to justify it. And I can give everybody a copy of the white paper, but it proves my point.

Then I said, what about not having people apply? He said, what do you mean? I said, I don’t want people to apply, I want people to submit an accomplishment related to the job. He said, oh yeah, it’s legal. It’s called the two-step. You can make the process anything you want. You don’t have to follow the leader.

So back to your point. If you’re risk averse, you will look for things to prevent you from going forward. You’ve got to start thinking risk oriented.

And that’s probably the biggest stumbling block. You’ve got HR people who are risk averse, and they’re not going to take full advantage of AI. They’re going to follow the leader, don’t make mistakes, don’t get challenged, be compliance focused.

If you have that mentality, you will miss an opportunity, an awesome opportunity, of using AI to fundamentally change how hiring is done across the world.

It’s the difference between playing to win and playing not to lose.

I think that’s better said. I’ll steal that from you.

It’s okay. I stole it from somebody else.

Yeah, well good. Then I’ll say I stole it from Scott, who stole it from somebody really insightful.

I was at a conference about two weeks ago speaking about the difference between AI as augmentation versus replacement. I took the machine side, I lost because all the judges were human, so I think that wasn’t fair.

But the group right after me got into a deep conversation about AI ethics, and it was all about risk aversion. None of it was talking about effectiveness.

In the HR teams that I’ve led, it’s been effective, efficient, defensible, in that order. You have to have all three. But if you solve it in any other order, you will never get to effective. That’s got to be where we start.

I can think about it. It makes sense to me.

One of the things you’ve talked about in how we hire better is the article you shared with me on the 12 universal traits. I’d love your insight. How did you conclude these were the right ones, and how do they help people be more aggressive in getting the right answer versus avoiding the wrong one?

Let me just say the 12 universal traits are being proactive, seeing the big picture, understanding people, influencing people. It relates to those kinds of traits. They’re so important, I can’t call them soft skills. They’re these interpersonal traits, communication skills. That’s why I call them universal traits of success.

I’m working with a company that supports large-scale construction projects, big data centers, big buildings, skyscrapers. They use VDC modelers, virtual design construction modelers. They build the whole building in 3D models.

We’re supporting them with these Kanban for hiring ideas. They’ve got like 35 or 40 job descriptions on their career page. They’re terrible. Every job looks exactly the same except for one line. So I said, how does anybody know what the job is? They said, oh, it’s clear. No, it’s not clear.

So I said, let’s do something totally different. We’ll create a group site for all these modelers. It doesn’t matter your level. You go there and you rank yourself on these six factors that drive success. That’s what we did, and we’re starting to see candidates from that.

Around Thanksgiving, we’re training them. I said, I don’t want to just interview the people, I want you to interview the people. A couple managers went through the training, and I said, I’m going to watch you interview these candidates.

I wasn’t interviewing, but I remember one manager, really good guy, Jesse. I said, Jesse, you’re on the line now. You better not screw this interview up. I said this before the candidate got there. So he’s all nervous.

So I’m listening and feeding him some questions, but more observing. And that’s when I realized, when you’re not interviewing, you really learn a lot. Jesse was asking good questions, but I was really learning the answer because I wasn’t thinking about what to ask next.

And I realized this guy was fairly good technically, but remarkable for how he said, when I don’t know this, I do that. When I couldn’t figure it out, I learned how to go get the information.

I did this three or four times and said, holy, it really is these non-things. It was also the fact that I wasn’t doing the interview, I was listening.

And then it came clear because I’ve interviewed thousands of people. I said, wow, these are the same things that an executive would have, or a VP sales, or director of operations would have. This guy was two to three years in, a techie, but I’m hearing these things. That’s when I wrote the article.

It doesn’t matter, the job is unimportant. You can figure out technical skills with a test, but it’s these other things that take time to figure out.

Now this was a good candidate. Was he good for that job? As I listened, I said, no, he was too light for that job. But then we talked after. Yeah, he’s too light, but he’s perfect for this job.

So you’re finding good people. Normally you would reject him. Number one, you wouldn’t even know he’s a good person because he was too light for the job. And they created a job for him. He’s been there a month and a half and doing great because of these traits.

Think about that situation. Great person, light on technical, strong in these other areas, the company created a job for him. If I wasn’t doing this nurturing process, they would never have seen him.

So all these pieces put together are redesigning a hiring system based on how good people get hired.

When you know people, you do that intuitively. When you don’t know people, you’re dealing with strangers.

So I think, let’s understand how good people are hired and build a system around that.

But HR will say, no, I’m risk averse, I don’t want to do that, can’t do it, the law won’t let us. No, get a better lawyer. If your lawyer tells you not to do it, get another lawyer. That’s my judgment.

Lou, can we double click on one of these? You write that ownership beyond boundaries is one of the greatest predictors of success. Can you talk about why?

Let me go back a little bit. I started as an engineer. I then got an MBA. The biggest piece of advice I ever had was from an old boss. He said, volunteer for things that were over your head. And I said, why? He said, because if you screw it up, nobody’s going to care because they wouldn’t expect you to be successful anyway. But if you are successful, and even the fact you volunteer, it gives you credit for being proactive.

When I first did this, I was nervous. But after a while, you learn that these things you don’t know aren’t that hard. You screw up a little bit.

But if you volunteered, people expect you to screw it up, so they support you. Then you gain confidence by doing that. It’s stair steps. Each step is five or ten percent. You take a couple five or ten percent steps each year, you’re 30 or 40 percent better than you were.

But if you’re not willing to take those steps, you never get there.

So I always ask people, where did you stretch yourself? Where did you take on challenges above yourself? I look for that trait in high achievers, and it’s always there.

The problems don’t stay in their lane, the people need to get out of their lanes too.

Right. And you’ve got HR willing to play it safe.

I was on stage at a conference three or four months ago, and the question came, what do we need to be doing differently to drive the function forward? My answer was, we need to spend less time worrying about experience and more time learning about learning agility.

You could tell there were two groups. There was the group that got it, and there was the group that thought I called their baby ugly.

But in reality, if you’re thinking about experience, what you’re really solving for is, can I solve yesterday’s problems? That doesn’t necessarily translate into, can I solve tomorrow’s problems, right?

Yeah, I would say so.

But the way I would get at it might be different. By me asking, tell me about an accomplishment you took on that was over your head. How did you get that accomplishment? Did you volunteer or did someone choose you?

What skills did you use? What skills did you learn? How did you apply those skills?

I’m combining the willingness to take on something over your head with how you learned and how you achieved the objective.

It’s not just learning agility as a trait. It’s, did you accomplish something with that learning agility?

Then I look at the trend of accomplishments over time. I see accomplishments increasing. And then I start looking at it and I see these universal traits pop up.

I keep wanting to go back to the story about my first engineering job at Boeing. I show up on day one and my boss shows up two hours late and says, we don’t know why we hired you, we’re in layoff mode.

And the only way I can keep my job is to volunteer for stuff I didn’t know. They said, hey, we need someone with strong Excel background because we need to come up with a skills inventory for shifting about 30,000 people across divisions. Does anyone know how to model in Excel?

And I said, I do. I had never used Excel before in my life. But I believed I’d used Quattro Pro enough. I’d been an accountant as an undergraduate. I figured I could get in there and play with stuff.

I kept doing that. Next thing you know, I was the modeling guy. It kept me from two layers of layoffs. I ended up winning a 777 award for the work and got to meet one of several Boeing executives that later got moved out for bad behavior. But at least in the moment it worked well.

That very thing that I saw in myself, I have always looked for in other people because it’s the way you can predict how adaptable they’re going to be.

Yeah, I think you hit it. That’s exactly correct.

So how does this method help us dive deeper? Your interviewing approach talks about going five or six layers down. What normal people in HR do is they’ll ask the same series of questions, spend 30 minutes, review it based upon an activity-based job description, and at the very end they’ll use thumbs up or thumbs down like a Delphi oracle.

Your approach takes all of that and puts it on the side. Why do you think your method reveals behaviors more effectively than the conventional way?

Let me start somewhere in the middle of all of this.

Over the years, I developed a scorecard called the Quality of Hire Talent Scorecard. I’m an engineer, mathematics background. I love that.

Early on, one of my clients said, Lou, I like your performance-based approach. If you give us a year guarantee, I’ll give you all our business.

I said, a year guarantee, I can’t do that. He said, come on. Think about all the people you’ve placed, how many of them last a year? It was very few. He said, give us a guarantee.

So I did it. And I realized, when you’re looking to make sure the hire is successful over the course of a year, you look for different things.

I wasn’t looking at stuff to hire the person, I was looking at stuff for them to be successful over the year.

After years, we tracked placements. We made about 980 placements, and only 75 didn’t make it the full year. About 8%. Most of them didn’t make it because they didn’t like the hiring manager. Same as me. I loved the work, I just didn’t like the manager.

After doing this, we studied what it takes to be there for a year. Then we created the hiring formula for success. It’s written in the second book.

The hiring formula says, the ability to do the work, in relationship to fit, drives success. Fit drives motivation. Because motivation is so important, we raise it to the power of N.

Ability is easy to figure out. Ability is hard and soft skills. Motivation and fit factors are hard.

Do I want to do this work? Do I want to work with that manager? Do I want to work in that culture? Do the circumstances map to what I can do?

If you can solve for N, N is the secret sauce.

So the interview is solving for N, which is the fit factors. Is the candidate motivated to do that work in this environment with that manager, with that set of resources, with that team, with our culture, with our politics, with our pace?

Our interview questions dig into accomplishments related to the work, but I’m always thinking, what was the fit like? What were the circumstances like? What was your manager like? Did they support you? What was the pace? Did you have the resources? Where did you get motivated?

Then at the end, we take the scorecard and solve for N. Tell us why this candidate is intrinsically motivated to do the work. Not just competent. Why motivated?

So we divide and conquer. You focus on technical. You focus on team. You focus on environment. But we dig into accomplishments collectively, bring evidence back, and decide if we should go forward.

When you can get managers in a room and share evidence, the light goes on. We spend more time with fewer people.

And because we’re hiring people we’ve been nurturing for three to six months, we can do it. That’s what I call Kanban for hiring.

It can be done now with AI. The AI does the lifting. It redesigns your whole workflow system.

That’s awesome, because I’ve always wondered why we hire people, and it’s the only time we look at a cash flow that may be going out 100 to 500 thousand dollars a year for ideally 10 years, and we assess it based on whether we like the person and whether they can do a job we have poorly defined.

So for everyone listening, what Lou just said is how we ought to be thinking about redesigning the entire process.

So with that, this is the part of the pod where we get really practical. Lou, what are the three plays that a CHRO should run starting next week that would create the biggest lift in recruiting impact?

I’m going to give you two, because I just told it to the president of a company the other day.

She said, how do we implement performance-based hiring at my company? And I said, two things you have to do.

Do not approve a requisition unless it’s written with a series of performance objectives. And the question starts, what does this person need to do to be considered successful?

Have a minimum of four or five performance objectives, KPOs, key performance objectives, that define the task, the action, the result, and some metric of success.

Do not approve a single requisition until that is done.

Number two, do not let the hiring team hire anybody or approve a hire unless they complete the Quality of Hire Talent Scorecard, which defines the hiring formula for success.

Ability to do the work, hard and soft skills, and the fit factor, and everybody agrees to N. Collectively have the hiring team provide evidence that this candidate meets that criteria.

You do those two things, you will be successful. People will start saying, well, how do you do this? Well, you have to teach them.

But say, until you learn how to do it, you’re not going to get your requisition approved. And until the team comes together and shares evidence, you’re not going to do the hire.

You get those two bookends, they’ll figure it out. They’re smart people. If they can’t figure it out, they should get other people who will, but they will figure it out.

We have tools and training to do that, but if they do that, you’re in the game.

You’ve got to bookend the process with the right criteria, not just put band-aids on a bad process and expect it to be successful.

You can figure out the third one for yourself.

Well, I think it’s about taking the time necessary to invest in making the right decision.

We will spend hours and have lots of reviews if we’re going to spend a million dollars on a piece of capital equipment. Then we will spend half an hour having an impromptu discussion with limited steps to make a similar-sized investment in a person.

The difference is a person has much more variability. It is a walking independent variable.

If you’re buying a piece of capital equipment, you have a pretty good understanding of upper and lower control limits. So I would add that as my third.

Just to give you some background, my first management job was manager of capital budgeting at a big automotive facility in Michigan. I had to implement a total capital budgeting system for a multi-billion-dollar operation that didn’t have one.

So, yes, this is like capital investment. You’ve got to treat it as an investment, not as an expense.

It is. And your talk earlier about moving people into the role that fits them, not necessarily the one you’re looking for, that’s part of portfolio human capital allocation, which we’ve talked about.

That’s exactly right.

All right, senior leaders. This is where we talk about your talent church summary. Or as Scott always says, hiring for tomorrow is always harder than hiring for yesterday because tomorrow isn’t here yet. Take it away, Scott.

I literally have never said that one, but I think I will.

I also don’t know how I follow a summary on the heels of what the two of you just said and have it mean anything.

Earlier in the pod, Lou was talking about getting kicked out of the Bronx. I just want to point out the thing everybody missed long before Survivor got voted off the island.

Here’s my summary. Salary is an investment. And we’ve got to think about it in terms of an investment.

When you’re going to hire somebody, we need to understand what are the outcomes they need to produce, what are the abilities that are going to let them produce those outcomes, how have they demonstrated those abilities in the past, and why.

The fit factor. Are they motivated to do the work? Are they excited about solving the problems you’ve defined? And do they have the ability to move beyond just those particular problems?

So it’s not the typical summary we do here, but I think on the heels of your comments, that’s the best I can do on a summary. Lou, what did I miss?

No, I think you hit it.

Let me just say, how do you do what you just said? The idea is, are they intrinsically excited about that job?

I don’t care if someone’s excited to come into the interview. I couldn’t care less. They don’t know the job. How can you be excited if you don’t know the job? That’s phony excitement.

On the other hand, when I ask, forget the money, why do you want this job, and I hear that excitement because I’m going to build a team to do A, B, and C, and they’re going to do it this way, and I want to work here, that means you truly are excited to do it.

And I ask the hiring manager, why is this person competent and motivated, and they describe the exact same thing, then I know you’ve made the right hiring decision.

That’s how you encapsulate it all before you make the offer because it all comes together there.

If you can’t hear that excitement and don’t see it, and it’s excitement to do the work, not excitement to get the job, then you’re rolling the dice.

I think you hit it a grand slam, hit it out of the ballpark.

That’s outstanding. And my key takeaway is every hire is in fact a capital allocation decision, and we need to treat it that way.

So thank you so much to everyone that’s listening and tuning into the Talent Sherpa Podcast. This is where senior leaders come to rethink how human capital really works.

They say you should never meet your heroes, but I can tell you I got a chance to meet one of mine today, and it has been an absolute joy.

Thank you so much, Lou, for those conversations.

Where can our listeners follow your work?

I would go to performance-based hiring.com and you can track with me or find me.

You could go to LinkedIn, and I don’t think I have any space for connections. LinkedIn limits the number of connections you have, but I certainly have four or five newsletters on LinkedIn.

The most important one, and I think this is going to be groundbreaking, is Kanban for Hiring. It’s going to change the nature of hiring. Eliminate job postings, eliminate boring interviews, build a relationship-based hiring system where you actually hire people based on what Scott and Jackson just said.

That is, in my mind, the future of hiring. And you can tell I’m pretty excited about it.

But I would say, don’t hire any candidates who aren’t as excited as I am if you’re hiring for any kind of job. If you don’t, they’re going to probably be problematic or who knows, average performers.

Thank you very much, guys, for inviting me. It was great fun.

Absolutely. And a quick shout out to one of our favorite listeners. Hello, Katie from Dallas. It was great talking to you today. Thank you for being a part of the Talent Sherpa community.

I said at the top of the episode, I’ll say it again. If you guys like the episode, if you like the Talent Sherpa Podcast, do us a favor, hit the like button. Better yet, subscribe. That helps share the pod with others.

Leave us a review on your favorite platform, whether that is Apple Podcasts, Spotify, or YouTube.

Lou, I never thought when I first read Performance-Based Hiring that I would have the opportunity to talk to you about these concepts. You absolutely made a difference in my career and the way that I think about work.

If you are a CHRO and you’re wondering where to start your AI journey, don’t forget to go over to Propulsion AI, www.getpropulsionai
. We are transforming how smart companies turn hiring insights into powerful outcomes, in large part because we are bringing AI to bear on the concepts that we talked about today.

Yeah, and if you’re an emerging or a brand new CHRO ready to accelerate your impact, I’d love to work with you. We have two individual coaching slots that just opened up. So please head on over to mytalentsherpa.com. We have the resources there to help you navigate, elevate, and deliver results from day one.

Quick shout out to our sponsor, Dripify. You can supercharge your LinkedIn growth by going to try.dripify.com/talentsherpa. The /talentsherpa is pretty important. It lets them know that you came through us. Both Scott and I use Dripify. Check it out.

And again, appreciate having you here today, Lou. And until next time, everybody, keep raising the bar, keep sharpening your system view, and keep on climbing.