Hiring for Fit Gets You to IPO, but Over Time, Hiring for Potential Wins

I was DMing Wharton Professor Adam Grant before he even finished delivering the talk describing different startup hiring models and their correlation to success or failure.

“Adam, what was the research you were referring to?” I was almost afraid to look at his reply, like Indy averting his eyes when the ark is opened. This is too much for us to know! The actual research about whether culture fit hiring impacts success or not!

indiana ark

Adam pointed me to this research study, Organizational Blueprints for Success in High-Tech Start-Ups [pdf], by two Stanford professors, which tracked 200 companies. They categorized the 200 by their employment blueprint – what were the criteria they used for hiring. Screen Shot 2015-11-26 at 5.05.00 PMAttachment is what binds the employees to the organization. Selection is the primary judgment criteria for how employees are hired. Coordination/Control covers how work is managed, decisions are made.

“Commitment” is what might be commonly referred to as the culture fit model and it dramatically outperformed others with regards to whether a startup failed or not.Screen Shot 2015-11-26 at 5.02.58 PMBut since the goal of a startup isn’t to “not fail,” but rather to succeed, here’s the correlation between these org models and IPO.Screen Shot 2015-11-26 at 5.03.13 PMCommitment for the win!

BUT what happens post IPO? Of the companies that go public from each org model, what happens once they’ve “succeeded?”Screen Shot 2015-11-26 at 5.03.21 PMWhoa, Commitment starts to seriously lag and Star outperforms (Star means hiring for sheer potential of employee).

What happens? Well, Commitment starts to calcify into stability and group think – this is who we are and the way we do things. But Star continues to bring in fresh blood able to step up and create new disruptive ideas, reinvigorate old product lines and basically maintain the attractiveness of the company for best and brightest.

The paper describes how changing blueprint midstream is actually quite difficult, but I wonder if the exceptional companies are able to navigate these switches, or if they’re just outperformers who stay consistent with an HR blueprint.

Thanks to my grad school classmate Ed Batista for discussing this paper with me too!

One thought on “Hiring for Fit Gets You to IPO, but Over Time, Hiring for Potential Wins

  1. Pingback: Should You Hire for Fit or for Potential? | Org Hacking

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