I’ve signed the term sheet for 4 GWh of lithium-ion cell offtake and sighed. I fired my CCO about half a year earlier and didn’t yet get a replacement. So I had to do all the work of negotiating and securing my biggest sales deal. I now had some time to sort out the long conflict between my engineering and financial planning teams and fly to those important negotiations with a regional governor about the perspective site for our factory. I needed support from my team, but I was only getting a trickle. There was no one else to blame but myself.
Succeeding in $1B+ business can only be done with a solid team. As a founder/CEO, I was ultimately responsible for picking the right people and making sure they worked as a team. In a couple of other projects, where I had success in hiring, my time was divided between three things. First, developing, monitoring, and adjusting strategy. Second, keeping my superiors informed and happy. Third, managing the team, so that they all get the resources and information they need, they are motivated and focused.
The were only two cases when I needed to delve into details. First, at one-on-one meetings, where we would go over specific projects, contracts, or situations. Second, preparing for board meetings or some specific committee meetings. Other times the team worked like a clock, dealing with anything thrown in their way. But this time it was different, and here is why.
Industry and work type mismatch
I was hiring people to build the first Russian lithium-ion cell gigafactory. Anything that has been done for the first time, automatically implies that no one has done it before. Well, at least in Russia there were no people who built a gigafactory before or had secured any major lithium-ion cell deal. So I had to choose people from other industries.
For my CCO I was looking into electrical equipment business development and sales. Naturally, I started talking with people whose backgrounds were in GE, Siemens, Schneider Electric, etc. I’ve ended up hiring a guy from GE, with a solid track of electrical equipment sales. That was a mistake.
Sales of big electrical equipment, like gas-fired turbines, or 500 KW transformers look good on the CV and are probably good if you are hiring a new sales manager from GE for your Siemens office. What I did not consider at that moment, was that most of my clients are most likely to come from the automotive business, and only a few would be from the energy business.
I got a CCO capable of selling big and expensive pieces of equipment to big energy companies, while I needed someone who knew all the automotive procurement officers and design engineers, capable of selling thousands of the same units. This was an industry/work type/product mismatch, that ultimately failed me.
Not following through with references
The last part of my hiring process was to call 5 people, who previously worked with the candidate and ask them for references. This was the most tedious part for me, and I was usually satisfied with two to three calls. That proved insufficient. For both of my key hires - my CCO and CE (Chief Engineer), getting at least five references would have made a huge difference. Here is why.
The reason why I hired that particular CE, was that he built three electrical assembly factories in his career. What I didn’t realize then, is that building a huge electro-chemical manufacturing plant is different, and the responsibility of the CE is much higher, so he has to be good at taking ownership of the project and handling responsibility.
I could’ve found out the true relation to responsibility by the candidate if I had interviewed several people who worked with him. I skipped that part and hired the guy. But when things got tough, he started shifting responsibility to other team members, blaming anyone but himself for any real or imaginary problems. The tougher it got, the fiercer became the resistance to take any responsibility.
When deciding to hire a CCO I called three people who worked with him before. Speaking to one of them, I asked what was it like to work with this person, and got a cryptic reply that I should try myself and see. This should’ve been a red flag for me, but two other references came up positive, so I’ve ignored it. To my peril, as it turned out.
Rushing it
I was in a hurry. I had tons of reports to make and do some real work alongside, while I had zero employees. I wanted to get people hired ASAP. I knew that they would need at least 2-3 months of learning about the business, understanding the company’s culture, and getting to know their colleagues. It would be six months from now, that I would have a semblance of a working team.
When I looked at my CE list of candidates, I realized that at that moment only one was available. For the CCO there were three available candidates, but only one was scoring on the most criteria. I had doubts. There was a nagging thought in my head that I needed to start again, find more candidates, and make sure that I had a choice of at least three top candidates. But I rushed and made an offer to the ones available.
Have I taken two to three additional months to search and interview candidates, I would have likely found at least one or two more for each position. This would allow me to compare the candidates who are closely matched and would allow me to evaluate all candidates deeper. A side bonus from taking more time to search and interview would be having a list of top-notch candidates, that I could pull in quickly, should my first pick be the wrong one.
Working on the mistakes
I didn’t get a chance for another hiring round. I’ve quit the project and moved out of the country. But I kept coming back to this episode and thinking what could be done differently. In the meantime, I’ve also interviewed several startups and scaleups on their practices of hiring key people. Here is what I’ve synthesized:
Take time to think about the type of product and the type of customer you are going to serve. Then find a person, who sold similar products to the customers you are going to approach.
Take time to call at least five people who worked with your candidate before. Ask them hard questions about the candidate, like how he works with subordinates, how he handles responsibility, does he takes ownership of failures, does he gossips about other colleagues, and so on.
Take time to find more candidates. Don’t rush. If you rush your hiring process you are 99% likely to repeat it later, and that will be the time when your project is in full swing, when changing the team is a very tough option.
I’ve found this out the hard way. It pays to invest time and effort in finding and interviewing candidates, sorting and ranking them, and getting references from their former bosses, co-workers, and subordinates. So take your time hiring your team. They’ll make or break your project. Share your experience of hiring people in the comments, I’d love to know!