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Patrick Weeks: Underwriting Human Capital (#147) · Icons of DC Area Real Estate

• 0:00
  Speaker A: Foreign.
• 0:09
  Speaker B: Hi, I'm John Ko and welcome to icons of D.C. area real estate, a one on one interview show featuring the backgrounds, career trajectories and insights of the top luminaries in the Washington D.C. area Real estate market. The purpose of the show was to explore their journeys, how they got started, the pivotal moments that shaped their careers and the lessons they've learned along the way. We also dive into their current work, industry trends and some fascinating behind the scenes stories that bring unique perspective to our industry. Commercial Real Estate welcome to another episode of Icons of DCRE Real Estate. In commercial real estate, we obsess over data, scrutinizing cap rates, absorption and comps with mathematical precision. Yet when it comes to our most critical investment, our human capital, many leaders abandon analytics at the conference room door and rely entirely on gut feel or hiring people who remind them of themselves. Today we're joined by Patrick Patty Weeks to help us change that. Patrick's diverse career spans from leading US market Marine Corps advisor teams in Afghanistan to navigating Big Four consulting in New York to launching the Washington D.C. market for the tech enabled hospitality unicorn Sonder. He is currently the Vice President of Operations for Tribuna's Health and the co author of the upcoming book New Science of Hiring. In this episode, Patrick dismantles traditional intuition based hiring and explains how to replace it with rigorous research backed strategies. We discussed the statistical difference between rule following and actual hustle in brokerage roles, the staggering ROI of integrity testing for property management teams, and why our industry's golden rule, Time Kills Deals applies just as much to losing top talent and as it does to closing a property deal. If you want to start underwriting your people with the same scientific discipline you apply to your real estate assets, this conversation is for you. Let's dive in.
• 2:31
  Speaker A: So Patrick Patty Weeks, welcome to icons at D.C. area real estate. Thank you for joining me today.
• 2:37
  Speaker C: Thrilled to be here. Good to see you again John.
• 2:39
  Speaker A: It's been a while. Thank you so much. What are you now focused on since stepping away from Sonder DC operation? How are you spending your time professionally and intellectually and what problems are most interesting to you at this stage?
• 2:58
  Speaker C: Sure, and thanks for having me. So right now, you know, for my day job I'm Vice President of Operations for Tribunis Health, which is a 50 person boutique healthcare consulting group and you know, very similar to a lot of other roles I've had focusing on kind of operations, leadership and the transferable skills there. So I tend to bounce around a little bit between industries, but the Roles really rhyme, generally speaking. And then, you know, part of why we're talking today is outside of work. I've been basically obsessed with how to do hiring well and how to do predictive interviewing and what is the actual science and research back techniques for hiring well and building a good team, building a good culture. So for honestly, more than the last probably five years, I've gotten so obsessed with this that it's essentially resulted in me surveying all the scientific research and literature I could find on the topic. And we'll be publishing a book here this spring, boiling it all down, called the New Science of Hiring, which is kind of aimed at taking all that information and packaging it up practically for your business hiring manager, recruiter, startup hiring manager so they can take it and put it into practice.
• 4:17
  Speaker A: So you're now writing, advising and coaching leaders on hiring and team design. Why does talent selection feel like the highest leverage problem to work right now on now, especially across capital intensive industries like real estate for instance?
• 4:35
  Speaker C: That's a good question. Although I would think that if you ask pretty much any leader across kind of real estate businesses, you know, what's the most important part of your business or your what you're doing, they would say it's the people. And it's almost trite nowadays to say I think people first, people are what make us good. And you know, it is true. Everything is downstream from all the decisions made, the capital allocations, processes, built, branding, someone's doing it. You know, AI isn't really running whole companies yet. But one thing that got me basically started going down this path years ago, kind of pebble in my shoe was when I was in my MBA studies, one of our professors kind of broke down this whole strategy for multiple hours and taught us this class and at the end talked about a little bit of hiring or people development strategy. And I was just blown away by his insights and structure he had. And then he made an offhanded comment, you guys will just end up doing whatever Google and Amazon does. And back in my day we just copied whatever IBM did. And it's like a record scratch moment for me because IBM can't imagine going into my boss's office and being like, I got this great process from IBM, let's just copy it. Absolutely. What we would do with Google and Amazon though, I thought maybe I'm gonna stick to my grandpa's company. And so it led to this moment where I was thinking, wait, all these other things that I'm learning in these classes, finance, economics, accounting, there's kind of A science to it. When you think about the activity of hiring, interviewing, onboarding employees, it's the lifeblood of every business. But where's the science of it? Why aren't I learning that? And that was really the question that sent me down this rabbit hole of trying to figure out, is there even a science to hiring? And obviously there's some art as well. You can instinctively realize that. But that's what sent me down the path of, huh. Different organizations do this, different ways are. Have we proven some ways are good, some ways are not as good. And that's.
• 6:54
  Speaker A: Well, there's. Years later, there is a whole science of human relations and HR departments and personnel. And then now, you know, I, I use Gallup strength finder to estimate, you know, what people's strengths are, which is statistical. And they have a lot of data.
• 7:13
  Speaker C: So.
• 7:14
  Speaker A: And I'm in the career coaching business as well.
• 7:17
  Speaker C: Right.
• 7:18
  Speaker A: Which I've advised people. So I look at, you know, as much data as I can find about people before I sit down with them so that they can think about their career plans and what they're doing. But I try to get lots of different perspectives on that. And so your science, what you're creating, will be very interesting and hopefully helpful to my career going with my coaching practice going forward.
• 7:43
  Speaker C: I'm hoping.
• 7:44
  Speaker A: I haven't read the book yet, but I'm eager to do that when, when it comes out. So before we get into the. All those details.
• 7:53
  Speaker C: Yeah.
• 7:53
  Speaker A: Let's step back now and look at your origin story, if we could, and where you grew up. Fatty. And your parents and what their influences were and, you know, what you did as a youngster.
• 8:08
  Speaker C: Absolutely. I actually was born here in D.C. but ended up growing up in the Midwest in Wisconsin at a younger brother, older sister, you know, a great kind of middle class lifestyle, very active in the community, in the church and local sports and things like that. But actually, I would say it was so, so positive and comfortable and almost vanilla that I actually yearned for more kind of adventure and more risk coming out of that. And so like my brother as well, we went to college and then after that both joined the military.
• 8:44
  Speaker A: Where'd you go into undergrad?
• 8:46
  Speaker C: Small school out in Western Pennsylvania, near Cleveland, where a lot of our family is from, called Grove City College and majored in business, economics and finance. A little bit of a emphasis on entrepreneurship, which even, you know, back then was kind of bubbling to the surface and always found myself pretty high agency in high school. Started a business teaching baseball lessons to younger kids or never like worked the McDonald's job or anything and learned how to create websites back in the 90s, which was actually impressive.
• 9:20
  Speaker A: Did you compete in baseball and did you, did you play?
• 9:23
  Speaker C: Yeah, and I wasn't necessarily that great, but I loved it and took lessons and whatnot in high school and played and turned right around and monetized those lessons and had a good little stable throughout the summer of younger kids that I put on the next in camp, school and things. And then again found kind of an entrepreneurial opportunity in college. As a freshman I was in an all male dorm and there's a lot of 18 year old guys who have never been away from home and one problem they face is how to literally do their own laundry. And so I started a little laundry business my dorm and would run laundry, wash and do the drawing, set timers, kind of keep track of it and do my studying as I kind of minded all that. And it was a pretty much 100 pure upside business because they were required to provide the quarters for the machines and the deterrent.
• 10:13
  Speaker A: There you go.
• 10:14
  Speaker C: Best margin of any business I ever ran. That's how I kind of got my walking around money at college.
• 10:21
  Speaker A: Did you do that just for a year or what?
• 10:24
  Speaker C: For a year or two, yeah. And then, you know, got into other things as well and found finance kind of drawing me, but also the economics because it helps me kind of understand what's going on behind the picture here. What's, what's actually driving the decisions and how do you translate options and opportunities and strategies into something a little bit more quantifiable or how do you kind of score it? That's not necessarily a through line. I really connected to the recent project here today, but always with that kind of curiosity of what explains what's going on here.
• 11:00
  Speaker A: So what drove you towards the military out of college? Just out of curiosity, why did you go that route as opposed to going into the professional realm?
• 11:09
  Speaker C: So in multiple reasons probably like everybody who makes such a big commitment, I had gotten a pretty coveted internship on Wall street in my junior year and they took one student from our finance department and was able to, you know, live in New York. And it was just exciting. Was at the World Financial center across the street from the World Trade center and watched that get rebuilt all summer out my window and pretty much was miserable. I just remember sitting in this gray cubicle at 21 years old, just full of energy, wishing I could just get out and go run around or go somewhere else or see something or be active or compete in sports. Things like that my favorite part of the summer was when I was on the corporate softball team and got to go out with the guys and play softball in Central park with a lot of very competitive financiers. And there's a little bit of the team mascot as a young guy. And I was attracted to the military and particularly the Marine Corps just because of the adventure. Like I was saying, you know, almost the opposite of kind of a quiet Midwest childhood. I really wanted that rite of passage as well, although I'm not sure I would have been able to kind of exactly put my finger on it, but kind of that test of the boot camp and all. And of course, you know, patriotism, whatnot played a role in that. I was 14 at 9 11, and I won't discount that. But the immediate day to day draw of the military and the Marine Corps in particular, was a chance to really push myself hard, be part of kind of a elite group that esprit de corps. And, you know, I grew up watching Band of Brothers and ended up serving with one deployment in Afghanistan in a small group of 20 marines who we were on what's called an advisor team. So we lived with Afghan military advising, supporting them outside the wire, as you say. Did 125 convoys.
• 13:09
  Speaker A: Wow.
• 13:10
  Speaker C: Just, you know, it was an absolute real life adventure.
• 13:13
  Speaker A: Were you in OCS or did you just.
• 13:15
  Speaker C: Yes, I went through. Yeah, I went through OCS through Quantico.
• 13:18
  Speaker A: Okay.
• 13:19
  Speaker C: To go in. And moved around a couple different spots throughout my military service.
• 13:24
  Speaker A: So right out of college you did ocs.
• 13:26
  Speaker C: Exactly. After I graduated.
• 13:28
  Speaker A: Got it. It's interesting. My son was a naval ROTC UVA, so he spent 10 years in the military himself. So he was a helicopter pilot for the Navy, so.
• 13:44
  Speaker C: Very good. Yeah, yeah. Yes. You know, a little bit about.
• 13:47
  Speaker A: I saw it firsthand. I actually went on a Tiger cruise with him on the. On the Pacific Ocean. So that was kind of cool, I have to say.
• 13:57
  Speaker C: Yeah. Memorable. Yeah, absolutely.
• 13:58
  Speaker A: It was. It was very special. So I got to see the inside of military life, and the Marines is a whole different game than the na. Than the Navy is. Even though you're part of the Navy, but you're probably not on the water very much. You're mostly on the land, right?
• 14:14
  Speaker C: Not these days. Yeah.
• 14:16
  Speaker A: Yeah.
• 14:16
  Speaker C: A little bit more of an extreme culture, a little bit more of a insular culture. But it was. It was a great experience. Very formative experience and absolute. So much leadership training and leadership culture. And, you know, for me, as a young guy, just trying to figure out adulthood A lot of learning the hard way. That is good for me.
• 14:38
  Speaker A: So did you learn about leadership and team building and, you know, that kind of thing there, at least at that level?
• 14:46
  Speaker C: Yeah, absolutely. I mean, I think that's the major emphasis just of culture of, you know, OCS and beyond and expectations of what it takes to be a Marine officer. And it's a little bit different from the private sector in that there's less hiring and firing, although there are similar functions of selection and assigning to teams and things like that that do occur. It's a little bit more of make do with what you have.
• 15:10
  Speaker A: What about evaluation? How did that help as far as evaluating people and their competence and under pressure?
• 15:18
  Speaker C: Yeah, I mean, there's. I think there's a constant, ongoing mandate for any military leader to understand your people. You know, this kind of ties back to strength finders, like you were saying, of how do you see what they're capable of, where their growth areas are, where the strengths are, and how to utilize them across the team. I did connect some with kind of the recruiting aspect of the Marine Corps, and that's. That's absolute. That's actually a very, I would say, highly mature recruiting function. Not necessarily the most technologically advanced, but I think they get the combination, right, of screening and selling at the same time. You know, there's both. There's the. Does a candidate want the job and can they do the job? And I think sometimes on the civilian side, with kind of the post and pray approach, we can tend to take a little bit too much for granted that they're coming to you, and it's just your job to kind of screen, but it's your job to sell the whole time and inspire and give them a good experience along the way.
• 16:26
  Speaker A: So how did that experience influence your later views on potential versus pedigree
• 16:34
  Speaker C: in the military? It's pretty interesting because there's such a leveling that occurs in ocs. I actually had a bunk mate who is a Harvard and Yale grad, and he's currently a congressman. And I remember punching him up when it was his turn to stand firewatch because he slept so heavy. Come on, man. We need to do this. Your turn. Get up here. And it didn't matter where he went, didn't matter. You know, nobody has a resume in the military. It's what you can do, how you show up, what skills you have, your attitude. Yep. And it's interesting, you know, I remember them talk just essentially beating the individual identities out of us to start with at boot camp. And I remember them talking about race. They said, we don't want to hear anybody talk about he's white, he's black, he's something else. Either light green or dark green. We're all green first here in the Marine Corps. And it's like that's the last you're going to hear about that. So moving on and not saying some of that doesn't creep back in, but the organization of the Marine Corps and having experienced that, to me showed how, how strong an identity and culture that an organization can dictate and rally people to and how useful it is to have a cohesive culture versus just a collection of individuals. You know, there are also negatives of the military too. When I was deployed, I deployed right after my eldest son was born. And I came back on his first birthday. First weekend I was back, he turned one. And so, you know, I mean, it's just a real demanding level of service. Service is absolutely the right word. And also I would say, you know, give credit to the families because the families serve to and what they sacrifice.
• 18:20
  Speaker A: Many veterans struggle translating military leadership into civilian business. What carried over cleanly for you and what. Absolutely did not.
• 18:31
  Speaker C: I think some of the things that did come across were, you know, helpful character qualities, just the work ethic. You know, you could just, you just ratcheted up to a very high degree of kind of expectations and standards. You know, honestly, I don't know that this is necessarily the stereotype, but, you know, checking your ego at the door is maybe not something you see in every military aspect, but not having an ego when you need to learn things, I think is key for succeeding in the military. As you grow, as you get different assignments and different missions and things like that, it's probably the biggest transition is to go military to civilian. So, you know, not having an ego while going through that really set me up for success because I took a lot of advice. I took, you know, individual contributor roles. I really did a lot to try to learn and not assume I'm a. I'm an experienced trained leader, I'm here to be in charge. But it was very, very difficult. I was on top of a vehicle manning machine gun, convoying through Afghanistan and six months later on in a cubicle as a consultant for Ernst and Young back in New York City. That's a big difference. Spinning also geography of where our home was. Also last I knew I was not a parent. Now I am a parent of a one year old. So it was just a massive amount of change and transition. Very difficult, for sure. But also very exciting. And, you know, family was a big reason why I decided just to do one. One tour, one enlistment, and then go to the civilian world. Sure.
• 20:07
  Speaker A: So how you pursued an ex executive MBA at Darden while working and raising a family, how did that experience change how you think about decision making, trade offs and rigor?
• 20:22
  Speaker C: So I would say first off that before anyone commits to something like that, be clear on what you're getting into, because that was very difficult for me personally. And, you know, experiences vary, but having two young kids by that point working full time and going to school in the evenings and weekends was very challenging for me.
• 20:43
  Speaker A: Were you at Ernst and Young at that time?
• 20:46
  Speaker C: To start with. And then I was moving into the startup world at that point and. And luckily I was able to use kind of the GI bill to pay for most MBA and to help with that transition. So, you know, there's some real benefits there. And if any, you know, veterans are listening, I would recommend you look into the benefits that you have and, you know, don't leave them on the shelf because there are ways that, you know, our country takes care of their vets and gives them opportunities to help that transition. So just wanted to make a little commercial out there. I know, I want to say most veterans don't take advantage of, you know, educational and other benefits, and it's crazy. So that helps quite a bit. And then, you know, one thing I saw and lived myself is that there's not really a career ladder. I think my conclusion is more like a career jungle gym. There's a lot of different paths you can go. You can make directional changes, you can go pivot left and right. And I wasn't super happy in the first jobs I got out of the military, but each time I got a role or got a new job degree or new geography or plugged into a new network, it opened up a new suite of options for me. And I think of it less like a queer ladder, more like a lily pads. When you go to the next lily pad and just try to improve your situation, it opens up adjacent opportunities there, make another jump. It opens up new adjacent opportunities and not sitting and waiting for like the perfect opportunity, which might be a couple degrees removed from where you are. So for me, going through the uva, you know, moving to be near some kind of friends and family down here in the D.C. area and being willing just to, you know, kind of not settle, but keep seeing what opportunities were out there was really key for my career. And I do think I've gotten some Bad advice to the contrary from well meaning folks who may have spent 20 years in a career or something to just try to stick it out. But sometimes the grass really is greener and you know, it's so nice it takes a while to tack your ship along and figure out where your fit is. And I would encourage people not to settle and build up their skills because, you know, it's a complicated economy out there today. It's not 1950 anymore. You know, there's one local factory in town, so that's a big learning I took from that experience. Time of my life.
• 23:05
  Speaker A: Well, there's a loyalty factor too on both sides. In the 1950s, 60s into the 70s, there was more loyalty in corporate America than there is today, certainly by far. So you know, you saw a lot of people staying 30, 40 years with the same company. It's a very rare, unless it's an entrepreneurial situation that servants started something then. Yes, but, but that's about the only way you see that kind of tenure anymore is typically entrepreneurial situations or family businesses or whatever, so. Right.
• 23:40
  Speaker C: I couldn't agree more. Yeah. If you want to stay loyal to just one of these, you know, corporations, that's going to be a one way street these days, so caveat out to them. Yep.
• 23:50
  Speaker A: You said that business leaders often treat hiring like a blank sheet of paper, even though they obsess over analytics elsewhere. Why do firms rigorously underwrite real estate assets that do that and fail to underwrite human capital with the same discipline?
• 24:13
  Speaker C: I think there's a couple reasons. This is what I've absolutely seen myself, though I agree with your assessment. And one reason is that the negative consequences of a bad hiring process can be somewhat hidden. And a. What's called kind of a think a friendly learning environment is something where you get a lot of opportunities to make decisions, you get quick feedback on those decisions. You can imagine, you know, playing checkers, you could learn some strategies. Play checkers. If you play 100 games in a row really quick because as soon as you make moves within seconds you're learning a thousand mistake or not. When it comes to hiring, a lot of mistakes are losing out on candidates that don't get hired, don't get through your process, you'll never realize who you missed out on. And then even when you do make decisions and hire someone, you'll never actually know if that was the best person in your pipeline to hire because there's no AB testing that. And even when you do make hires and they stick around, they perform and they do good or bad. Really just think about that feedback loop. It could take a year or two to even figure out that something's not working out or not ideal. And so you're not really making decisions and getting. Taking action and getting feedback loose. Another is just that, I mean, it took me a lot of work to put this science together and pull all the research that's out there. I'm obsessed with this topic and I was learning stuff on year four of studying this topic. So I think there's just a real disconnect between the academic research community or those who do have best practices and the average business person or real estate industry person leader who may have heard a few things, who may have a few good techniques, also may have had a few bad habits that have snuck in as well. And then the last thing I'd say is there's some techniques that we can prove will improve your hiring outcomes. And even when you tell that people and train them and give them the opportunity, they just don't enjoy the interviews and conversations and process as much. And so they'll literally do actions that they know undermine the predictive validity or, you know, the quality of their interviewing just because they like to have fun conversations or they just want to shoot the shit with some candidates and go out and have a coffee, or they just don't want to do as much rigor. Or for example, you know, recruiters just have a lot of resumes to go through, feel kind of stress about it and rush through them, which drastically reduces the quality of those resume reviews. But I think part of it is just kind of those human factors. And it's hard. It's not like if your accountant messes up and and A is the wrong vendor, you'll never really know unless you're actually closely managing your recruiters and your hiring managers if they're not doing following the best tactics, because there's just not quite that tight feedback loop. So I think it's like this whole bundle of intersection of a lot of different reasons that it's left. I think most organizations using very subpar
• 27:27
  Speaker A: hiring techniques, well, human beings are complicated animals. And being able to get an assessment in a short time about a human's potential in a. Especially in. In career situations that have so many variables involved.
• 27:49
  Speaker C: Right. And.
• 27:50
  Speaker A: And let me just make a pitch about the real estate industry. And I've been in it for 46 years and I've seen a few things. I hazard a guess that there are very few industries that have more variables and complications that come at you that's unexpected than our industry. And primarily because of the cyclicality of it and the just unpredictability of capital markets, the construction costs, just all the factors that you have to deal with in our industry. And then personnel, of course, complicates it even further. Is that the right person to help you with that effort that you're trying to get done? And you're always looking at that, that's non stop. And that goes with consultants, people you're hiring outside your company as well as inside your company. So it's a very complex industry. And there's so many things that we just talked with the developer my last interview. I mean it's like directing a 300 piece orchestra. You know, you're expecting 300 people to be all on the same page to get something done. It's a complex animal. So, you know, I guess I'm trying to hone in on how you be able to quantify and make data out of the complexity that I just talked about.
• 29:20
  Speaker C: Yeah, real estate is a complex business. There's no solo real estate projects going on. It's such a combination of maximum complexity on the quantitative metric finance side and maximum complexity on the people side as well. It's definitely a tough one. The way I think about tackling real estate roles is trying to be as clear on what each role needs to accomplish for you and breaking it down into its constituent points. And then I think where people go a little bit wrong is that they try to focus on the past a little bit too much with each can of have. Even if they're thoughtful, even if they're nuanced, looking at maybe the five components of this role and have they really accomplished something in each five components in the past, that's a good place to start. That's not a bad place to start really. You're not buying someone's past, you're buying their future when you're hiring them. So if you can, like an investment. Like an investment. Right, exactly. The future is going to be different than the past. And so you can look at someone maybe early in their career on a steep trajectory, rapidly learning a skill or an aptitude in a certain area versus someone who's very accomplished, who might on paper today look a little bit stronger, but doesn't quite have that trajectory. You know, the data which the research shows that it might be a better decision to go with a young person who is demonstrating rapidly accelerating potential than someone who actually is accomplished in those areas. And so having that more future orientation along with kind of real clarity of what you need is a good place to start headwise.
• 31:01
  Speaker A: Let me shift back to your career.
• 31:03
  Speaker C: Sure.
• 31:03
  Speaker A: You joined Sonder to launch its DC market when it was still early. What convinced you that a tech enabled hospitality model could work in a tightly regulated relationship driven real estate market like Washington D.C.
• 31:21
  Speaker C: i'm not going to look back and pretend like I had some deep insights or something, but it definitely sparked my curiosity and my interest. So Sonder, for those who don't know, was kind of like a Airbnb meets hotel concept. Renting out mostly apartment style accommodations to the short term rental market and fairly uniquely managing all the operations across a citywide network of buildings out of the same team, which is very different from like a hotel model for example, where some of the operations can be centralized across the city. And I believe one of the early taglines was actually the deconstructed hotel. So I thought it was a pretty good bet for my career, thought it could work here because they actually had a couple of years of profitable experience when the operations were very immature, very new in other cities. And it operated at that arbitrage dynamic between kind of the paying some of the costs of what's traditionally looked at as long term rental properties that had more of a residential feel, even if they were zoned and built to short term residential properties and then renting them out at essentially hotel rates and beyond renting them out by night. I thought as a potential consumer looking at the product that it really fit a need that wasn't being serviced very well. You can imagine me at the time, two young children enjoying travel. A hotel room is about the worst form factor for someone who has a toddler and a baby. Yeah, and that pretty much left Airbnbs. But there wasn't really like a professional brand of Airbnbs where you've got customer support number to call, where they can make an exception and have a crib, where you know, the quality and cleanliness and standards of a professional brand will be there. So I think that's what it was aiming at. And there were other, a few other, you know, venture backed competitors at the time, also tackling market before 28. Yeah.
• 33:32
  Speaker A: What led you to Sounder in the first place?
• 33:36
  Speaker C: As I finished my MBA in spring of 2018, having kind of experienced what I experienced, I put all my professional branding into the combination of the three words startup and operations and leader in the Washington D.C. metro area. And you know, when it comes to like, you know, career path strategy, I think I experienced the outgrowth of what, you know, some people advise which is brand yourself very specifically. You won't be a good match for most jobs, for many jobs out there, but you'll be a great match for few jobs that are the ones that you're looking for.
• 34:13
  Speaker A: All you need is one.
• 34:15
  Speaker C: Absolutely, yes. One is plenty. And so I looked at that and a couple other similar roles in kind of scale ups and startups that were hiring in the area as I graduated. And I was blessed to take this role with Saunder and be the first hire locally launching the market. You know, it felt kind of like I was just making my own startup here and yeah, went from there.
• 34:42
  Speaker A: So scaling Sonder felt like a rocket ship. What broke first as you scaled? Systems, people, culture. And how did that shape your later thinking on hiring?
• 34:54
  Speaker C: Absolutely. So just to put some numbers to this, I joined right around the series B timeframe. First hire locally, number 200 employee worldwide and wrote it to 2000 employees. Three, four years later. Went from 12 markets to 45 markets. Wow. My own team went to 30 W2s and dozens of contractors. When you think about housekeepers from, you know, me and a laptop and we work to I think we had seven buildings, over 400 keys or kind of apartments. So grew extremely fast. When I think about kind of people, culture and processes, to me, I mean you could ask anyone who worked with us and joined the team, you know, the people and the culture were absolutely the focus. And I was extremely intentional about putting time, thought, energy, money into getting good people and building a strong culture when you got them here. And you know, I think early on in a startup like I've seen there and elsewhere, it's just all people based. I've heard a phrase recently which is if you don't have a system, you are the system. And as any business scales fast and grows fast, you just can't keep up. System wise, you need people who are able to act very proactively, high agency, high communication, high EQ and try to keep up with the building. And so let's say it was our processes that were just always being built and rebuilt as we went along.
• 36:31
  Speaker A: What was your lens for hiring at that point when you're ramping up? I mean, what were you looking for from the various team members, particularly for
• 36:42
  Speaker C: my managers, Very high agency and very low ego. People who are curious, takes initiative, you know, have that kind of hustle like they say. Since then I've learned that it's called proactive personality. You can actually test for it. I think that would be something, you know, a real estate organization should really think about adding to their interview pipeline. You can ask, you know, a four minute questionnaire that some fills out and they can tell you how proactive they are, how much initiative they're going to take. You might not want a creative accountant, but if someone's out there doing sales, doing business development, doing property management, want someone who's not going to be waiting to be told what to do. Proactive personality, I think is very key. And I looked for people who had a lot of drive and a little bit of a chip on their shoulder, wanted almost that wanted to prove something. Either had a leadership role that they coveted, a title, or they had a educational alma mater that they had to live up to, or just some story for why they had kind of a extra drive to prove themselves.
• 37:51
  Speaker A: So I know three of your employees. I'm going to bring up three names and I'll let you tell me what your view of each one of them were. My first experience was Michael Grind. He was the first gentleman I met. And then I met BELLA Later, Bella McCann and then Ashley I knew from our industry and she was in finance before. So that what that move really surprised
• 38:20
  Speaker C: me a little bit.
• 38:21
  Speaker A: So why she went to Saunder.
• 38:23
  Speaker C: And let's talk, yeah, let's talk about that hire because it was a very surprising hire to people around the organization, to our recruiting team. And this is all been shared publicly, so not treading on any toes here. In the past, you know, the kind of business development role or our real estate efforts had been usually done with people who had very similar business development or brokerage type backgrounds. But kind of like the technique I talked about earlier, breaking a job down into its constituent parts and skills. When I did that in a more granular way, in a more focused, kind of nuanced, thorough way, really, I saw that someone who came out of the banking industry financing real estate development had proven that they could go to developers and essentially in that case sell a commodity. Everyone's money is green. And for someone who's really looking to make a change and wanting to try something new like go to the startup world, I found that little chip on the shoulder there as well. And if there are any components that maybe that background didn't have covered, maybe had to learn about the business or something like that, I felt like it would be a cinch to train that and share that and partner through that process. And you know, I played a role in business development. It's really not my strength, but, you know, I could play a supporting role. And that turned out to be one of the best hires I've made surprised everyone except for me. And I'm not trying to sound egotistical, but it just made sense when you went deep enough into finding someone who has really demonstrated the skills and aptitude and desire and, you know, the recipe is a little different than just a cookie cutter coffee and found someone who did very well. And I also think, by the way, this is the approach that also opens up more of a lends into hiring all types of diversity, which is not just staying with the same cookie cutter, trying to fit the same type of candidate into the same type of role, but looking at how you could get what you need from that role from different ways. You know, hiring military to civilian, for example, you know, the candidate needs to bring certain things, but the employer can also bring certain things. And so if you have to train someone on something, you know, we've all learned lots in the past, it's not insurmountable to close a small gap with some training or skill investment or something like that and get someone who's really unique and can really make an impact.
• 40:57
  Speaker A: So your career spans multiple arenas, from Marines, Big Four Consulting at E& Y to tech startups and then into hospitality real estate with Sandra. Can you walk us through these transitions and share what guided your decisions at each pivot?
• 41:17
  Speaker C: Yeah, I think I've covered some of them. But, you know, the one kind of pivot we haven't talked as much about was leaving Big four consulting to join a startup. This was probably one of the career transitions I faced the most second guessing on from my network or family or whatnot, which I think is totally valid questions. I remember working in New York City for Ernst and Young as a project manager on consulting teams. I lived in Brooklyn at the time and had a client in New Jersey and was literally driving a rented car across New York City to commute every single day. Except sometimes when I worked so late, I would literally sleep at a nearby hotel and go right back to the office after getting a few hours of sleep.
• 42:02
  Speaker A: And
• 42:05
  Speaker C: the work subject didn't really light me up. The lifestyle was just not in line with how I wanted to live my life. And I didn't necessarily know exactly what I wanted to do, but on that commute, I ended up listening, just stumbling into the podcast series that later became the Art of Blitzscaling with Reid Hoffman. Oh, sure, Masters of science, masters of scale. Yeah, Reid Hoffman and Sam Altman had another startup, how to Start a Startup Podcast, and I listened to those over the course of maybe a month, driving back and forth on this horrible commute across the entire New York City borough. And it just made my eyes open to what a different cultural world startups were from. You know, the very suit and tie financial consulting world up in New York.
• 42:56
  Speaker A: Sure.
• 42:57
  Speaker C: And it really resonated with me. And I think, you know, there were things I liked about DUI and they really invested in their people there and they have high standards, work hard and do have kind of small teams. And there were definitely things I loved in the military, kind of the excitement of it, the adventure of it, the variety of what I ended up doing, like Band of Brothers experience I talked about and I found there were threads through all my experiences that more or less coalesced in kind of operational leadership roles in the startup world where it just felt like a better fit for who I was, personality wise. And that's when I decided, you know, I think I need to figure out how to get into this world. I need to figure out how to make a change. And it has, you know, definitely been a good fit ever since. So I think that, you know, getting exposed to different opportunities and not being afraid to take a risk and not being afraid to make the change, but I had to take a pay cut to leave consulting. I just a pretty good lifestyle when it comes to perks and whatnot. Yep. But I knew in the long run I'd be better off. And I think that's one way I would recommend your listeners think about making career changes, which is, I call it like attribute swapping. You know, if you have the top 10 attributes of a job that are important to you, geography, title, pay, subject matter, company culture, you can make trades. Probably not all top 10 at a time, but probably a couple here and there. Move industry and move geography and maybe you take a pay cut, you can get in a whole different world then climb that ladder over there. So that's what I ended up doing, just kind of falling into it, going a little bit more instinctually. And I felt like I was always trying to get a little bit of a better fit and also grow at the same time and you know, learn what I need to learn and mature where I need to mature.
• 44:47
  Speaker A: Sure.
• 44:47
  Speaker C: But sometimes the grass really is greener on the other side.
• 44:51
  Speaker A: In commercial real estate brokerage, especially, senior leaders often hire junior talent based on gut feel or who reminds them of some of themselves. From your experience, when does intuition help and when does it quietly sabotage results?
• 45:11
  Speaker C: I like how you asked that question because it can be a double edged sword. I would say I think I'm Safe in saying, from my research, one of the biggest dogmatic biases in hiring is, I think it's actually called the like me bias, because if someone really seems like you are a younger version of you, you tend to very much overvalue and overweight what they can actually bring to the table. So I would be very cautious of a likely bias, for sure. And in my hiring, try to have as much objective standards and criteria as possible. That being said, if you have a lot of experience in interviewing and hiring, your skills do improve. When Google tracked for years There, I think, 10,000 hiring managers or something like this. So these are people who are recruiters and not recruiters, recruiters. And they found that after Your first about 50 interviews, your predictions are actually worse than a coin flip. So it takes a while, but once you've done hundreds and hundreds of interviews, particularly for the same role or same kind of clusters of roles, you end up having a stronger intuition and it builds over time. That being said, I think it tops out about 80, 85%. So you're making a mistake. One in five, one in six candidates that you see. So to me, intuition helps if it's well informed, if it's experienced, if you try to check your biases. But I don't think it's ever really enough, because what you want to do is real multimodal assessments of have multiple people interview them with multiple different perspectives and test their skills in different ways and hopefully in as realistic ways as possible. Great.
• 46:59
  Speaker A: So what finally pushed you to write the New Science of Hiring? Was there a moment, maybe at Sonder, where you realized traditional hiring methods were actively hurting outcomes?
• 47:13
  Speaker C: I saw it frequently there. We made a lot of mistakes and learned some things the hard way. I wrote the book with a co author, Joy Giles. She ended up being our head of talent acquisition at Sonder. She came over from Vail Resorts, you know, the ski resorts and whatnot, where she was in charge of hiring 40,000 people per year. Wow. She's got more experience in hiring than almost anyone else in the country when it comes to pure numbers. And she had done some projects there to improve their hiring results and use data. And then I approached her when she joined Saunder, wanting to use my market, my, you know, business and team out here as a pilot with some of the techniques that I was learning and reading about. And we ended up doing some projects together that showed some real results, real impact, where normally you're not able to make changes to a project or process and improve both quality, speed and cost. And we were Able to do that by having savvier approaches here, you know, these research backed approaches. What's weird is, or what's interesting is how a lot of the improvements she made were essentially over the pushback of our experienced recruiters at the firm. Really had to go and get the data to prove that her ways and the ways that we piloted were proven better than what we had done in the past. So you know, I do think that gut intuition you talked about the senior leaders, the biggest risk is the not just the like me candidate, but also be comfortable to me, we've always done it that way approach. And you know, one big takeaway for us was speed in hiring is very important. Particularly if you're hiring people who have top talent, they have a lot of opportunities. Even if you're hiring people who are borderline minimum wage jobs, it's very easy to get jobs to compete against what your offer might be. If you drag that interview process out. You can actually walk into Amazon right now and they have 30 minute interviews and you can get a job offer at the end of that 30 minutes for competitive frontline wages. And so if you're competing with that and you want to do four or five rounds of interviews and drag out an offer, that person's gone. Even if they would have preferred to work with you. Usually whoever gets the offer to the candidate first is going to get the case. So speed we found was very important. Whereas a lot of people confuse number of interviews with thoroughness and quality of the interview process and really number of interviews, there's a real trade off with time. And multiple studies I've seen show that after the fourth or fifth interview interview you're not even changing your mind on any candidates. You're just going through the motions at that point. So it's not even worth the time putting into it. So I think, you know, I was sitting there, you asked me how the book came about and after these like real life experiences and learnings and just learning for myself, you know, I heard a couple people talk about what it was like to write a book and say, you know, you might have to be some fancy author. This is something you could work through with publisher, with a coach or whatever. And I thought, oh, maybe I'll look into doing that myself and self publishing or something, ended up working with the publisher and just excited, kind of share this learning and see where it helps other people. Right.
• 50:34
  Speaker A: So commercial real estate firms are intensely data driven about deals, cap rates, comps, absorption, but remarkably casual about people. Why does analytics stop at the Conference room door when hiring begins.
• 50:52
  Speaker C: Don, I've asked myself that question many times. I'm not sure I have the answer why, But I think that you're going to see a lot of the teams and the cultures and the leaders who are more rigorous, more data backed, more evidence backed, pulling ahead. And I think that you're paying a price, whether you know it or not, if you're not taking the hiring seriously and doing it in a rigorous way, in an evolving way. But you know, it's tough because like you were saying, people are complex and the people side of the business is, you know, messier and just a little bit less black and white. I think the quantitative side of the business just lends itself more to that. But I think that that will change over time. I think people will end up using more quantitative tools as well as kind of AI and automation become table stakes for any business that, you know, that's touching the recruiting and hiring side of business as well. So I'm hoping that in our lifetime we'll see some major changes there.
• 51:52
  Speaker A: Your book argues that cognitive ability and pedigree are declining predictors of performance for brokerage or acquisitions roles. Should firms place resume screens with simulations, mock cold calls, lease analyses, underwriting exercises to better predict success?
• 52:16
  Speaker C: My short answer is yes, kind of to reiterate the comment I made a little while ago about multimodal assessments being kind of the gold standard. The way I see it, previously there's been a lot of emphasis on years of experience or the ALMA material and also honestly, personal networks as well. None of these are necessarily useless, but they're overemphasized to a ridiculous degree and they're trusted much further than their actual ability to predict someone's performance should lead them to be weighted in my mind and according to the research. That being said, I think what people are ending up doing is looking at, you know, if you've got that Stanford, Harvard grad or whatever, but they're really not using is what they might have learned there. They're using the filtering mechanism from that school. It actually is fairly quantitatively rigorous as the shortcut, as the thumbnail. But the actual real life experience of people is that most people can't necessarily afford to or don't have the network or what to get these expensive signaling mechanisms on their resume. And those that do tend to get overbid. So even if you want to staff your firm with a bunch of Harvard grads or whatnot, or I should say Harvard caliber hires, you're likely going to be overpaying for what you get than if you just had a savvy, thorough, outbound sourcing approach to people who could give you that level of talent and drive and intelligence, but for whatever reason couldn't afford to, you know, get one of these pricey resume builders. So the different techniques you brought up have been shown in our recent research to give a much more well rounded view of what a candidate do for you. And the general idea or strategy is can you assess the candidate as close and fidelity as possible in your interview process, doing what you're going to need them to do in the job day to day? Yeah, go for it.
• 54:38
  Speaker A: I have a theory and I'm going to. I'm testing it on you here. After 46 years in the industry, my feeling is that when you're hired, you don't really know what your job is day to day, per se. And our industry, as I said, is very complicated. And my sense is that if you reverse engineer the job that you're hiring for and take a week out of that job and, and take all the different things that come at somebody for that position and then put them in a role model. So here's your day. So you're starting at 8am here's what's coming at, here's what's on your desk, your boss walks in. So you build these simulations and I think you do five of them, four or five, and give them an hour or so. Maybe I don't know how long it would take, but to me, a simulated week, let's say, of all the different things that could come at you and somehow assess that in a way that you can get a sense of what their savvy is, to be able to address something or their intrigue and curiosity about how does that work? I don't understand that. What could tell me more about so ways of how do you dig into that? So to me, as practical experience interviewing as you could possibly get to will accomplish more than I think any other
• 56:18
  Speaker C: way of doing it.
• 56:19
  Speaker A: Again, that's a theory I have and I'd like to get your. Since you've done so much research on and have statistics behind it, am I on the right track there?
• 56:29
  Speaker C: Well, John, I have great news. You're absolutely on the right track. And I think that would be a very, very strong starting point for an interview process. You know, to sit down and have a chat with six people for 45 minutes each really is not optimal. But I would say if you have like a work simulation like that, there's benefits to the company, especially if you have rigorous kind of standardized grading across candidates. But there's also benefits to the candidate because you're actually giving them a taste of what the job is.
• 57:03
  Speaker A: Yes.
• 57:04
  Speaker C: And that's really valuable to the candidate as long as you're not, you know, wasting too much of their time doing it or something like that. But they're always judging, they're always gauging their level of commitment. And, you know, one of the key, key recommendations from my book is also just show your warts. Be honest about the pros and cons of the job. Be honest about what your culture is like, and let people either resonate with that or let them be a little bit turned off if they're not a good fit. You want to get all that filtering done for both your sakes in the interview process.
• 57:38
  Speaker A: Yes. I mean, there's positives and negatives of every position. Right. There's no perfect job. So you have to. But to me, get a feel for it and then find out how much give there is. And what do I mean by give? I mean flexibility is. If this doesn't work, are you allowing me to adapt and be a little creative to do some things differently? And how creative can I be in my job? And how innovative are you looking? And are you seeking that? And if you are, how do you incentivize that? Another question. Incentives are critical for jobs. So not just financial, but emotional and other things. So get behind that a little bit, if you would.
• 58:33
  Speaker C: Right. And my book doesn't touch a ton on the incentives, but one of the best things you can do for retention for your employees long term is what their experience and that feedback loop and those incentives are in the first 60 days when they take some behavior. How are you priming them for that? Are you encouraging them in that direction? And when they go in the directions you want or exemplify the behaviors you want, how are you rewarding that and calling it up? And, you know, incentives are generally not even financial. It could literally just be what your manager says, hey, good job on that
• 59:05
  Speaker A: in the first week.
• 59:07
  Speaker C: Any praise or criticism your manager gives you in your first couple weeks comes in so loud, the volume has turned up so loud as someone's a little bit insecure or anxious or just radar's very finely tuned to get that early feedback, and that's where you can set the tone. And what's been interesting to me is job after job, industry after industry. They've shown across multiple studies that performance itself varies very differently based on how that first onboarding experience is and so I. I would also recommend to the leaders, you know, listening to this podcast is sit down and. And game plan out, storyboard out, what it's like every step away from an offer through their first month at the job.
• 59:53
  Speaker A: Absolutely. That's exactly where I was going with that reverse engineering process.
• 59:57
  Speaker C: Yeah, right. Yeah. And if you have an interview where they get a good taste for the job, they're going to know what they're getting into. But then in that first week, you know, one thing I did at one of the startups I was at is give people a little digital gift bag the night before their first job, their first day on the job. And one of the things in there was a $25 Uber gift card. You don't have to worry about public transportation, parking, heck, this week, shoveling the snow off your car or whatever is coming, weather wise. Oh, I know I'm going to get to my job as easy as pushing a button. A car will take me there. That's just one thing I don't have to worry about. And let them know, you know, you don't have to worry about their food for the first week and buy them lunch, et cetera, et cetera, and just take a couple of those friction points away and let them know you care about them, their success, and you want to focus on them doing their work and doing the work for the rest of their ability and getting plugged into the community there. So I would encourage hiring managers, think about how you could be creative with very small, not very costly, but thoughtful activities like that.
• 1:00:58
  Speaker A: Well, it's clear based on what you just said, that you've been in the hospitality business, because that's exactly what hospitality leaders teach. Make the experience a good experience.
• 1:01:14
  Speaker C: Absolutely. Yeah. Take the ownership for the experience.
• 1:01:18
  Speaker A: Exactly. And to me, you know, it's kind of the. You're a guest in somebody's home. If your employer, your employees, your guests, in some ways, they're helping you, they're supporting you, but they're your guest. You have that attitude of hospitality with your employees. Boy, it pays back in spades, in my view. Right?
• 1:01:43
  Speaker C: Am I right? In spades, 100%. Yeah. And it ripples out, too. Any employee who gets treated like that is going to be treating the next generation and their connections in a whole different way, too.
• 1:01:55
  Speaker A: Well, it's like mentorship, which I do also is paying it forward and believing that your responsibility is to bring up the young people and teach them how to do the same for the next generation, too. But that's important.
• 1:02:14
  Speaker C: Exactly. Exactly. Yeah, it flows through and continues to move on and influence well beyond. You can see above the waterline.
• 1:02:23
  Speaker A: In brokerage, everyone talks about hustle. You highlight proactive personality. You mentioned it earlier as a stronger predictor than conscientiousness. Is this the scientific way to identify agents who can actually build a book of business from zero?
• 1:02:45
  Speaker C: I would say yes. And I would say this is one of the most interesting and kind of exciting parts of the science that I stumbled across. And whether it's brokerage or business development roles or anything like that, I think this is something a hiring manager should really look into. It did mention it earlier, but to contrast it with some of these other qualities that have been mentioned in the psychology of business psychology field previously, pure IQ or general mental ability and conscientiousness or characteristics that were very heavily weighted as far as assuming it would make a big positive impact in your job performance. That's true. You know, intelligence versus, you know, you want the employee who's more intelligent, they just have more mental abilities and you want someone who's more careful and conscientious and takes care of the details. Those are correlated with performance across most jobs. But looking back at the statistics and the data, recent meta analyses found that those were pretty overweighted. They were a little bit overemphasized. They help, but they're not the be all end all across all jobs. However, I believe more recent science, or at least more kind of recently well known science on this proactive personality aspect has shown, particularly for these roles where you want that kind of enterprising entrepreneurial hustle or doggedness, this is something you can test for. It is a real phenomenon and there's a real kind of skill set or orientation. I'd say that be very valuable. And so this proactive personality, I would say don't leave it up to your gut. When you're interviewing for it, you're looking for it. Don't leave it up to their resume. There's a lot of people who may not be like you, cannot remind you of a younger version of yourself. Or they might not have had the roles to really demonstrate this in a way that could wow you in reading their resume. If you can test for it and you can just let them loosen in your organization and give them room and Runway to go. They'll take their opportunities, take their scenarios, they'll run with it. And I highly recommend testing.
• 1:04:58
  Speaker A: There are two references, two references I want to share with the read with the listeners that talks about proactivity. The first one is Stephen Covey's book, which is the seven habits of highly effective people. I don't know if you've read that book.
• 1:05:15
  Speaker C: Years ago.
• 1:05:16
  Speaker A: What is his first one, do you remember? No, it's two words. Be proactive.
• 1:05:23
  Speaker C: First one, he nailed it. Yeah. Yes. So.
• 1:05:29
  Speaker A: And you know, I can go through them, but I don't want to do that now. But that's the first one, so. And then I, for all of my community members, the multidisciplinary approach to learning something I share or the thinking I share, which is Peter Kaufman's speech to Caltech. And he said, go first. Always go first.
• 1:05:55
  Speaker C: Don't wait.
• 1:05:56
  Speaker A: So if you get on an elevator, what are you going to do? You're going to smile. You should smile and say hello, good morning to the, to the people on the elevator. You should just sit back or you shouldn't scowl. You should just be kind go first. If you walk in a room with people, even if you don't see somebody that you know, walk up to somebody and say, hello, how are you? My name is John, you know, like to meet you or whatever, be proactive, go after it. So anyway,
• 1:06:28
  Speaker C: absolutely. Wouldn't you want your employees to have that attitude when they're walking around with wearing your logo on their shirt?
• 1:06:35
  Speaker A: Absolutely. Just, you know, be fearless. It's not going to hurt. And you know, one of the citations he talks about is Bono, the famous singer said he, you know, he assumes positive things 90% of the time. You know, nine out of ten times when you do something proactively, you'll get a good response back.
• 1:06:58
  Speaker C: Yeah.
• 1:06:59
  Speaker A: And it may even be higher than that. Typically, it's just, you know, typically human nature is such that they respond reciprocally, as we call mirrored reciprocation, back to behavior. So if you're kind to other people normally, they're going to be kind back to you.
• 1:07:15
  Speaker C: Typically, anyway. Absolutely, absolutely. And it's all free. It is.
• 1:07:24
  Speaker A: So commercial real estate interviews often reward polish, the smooth talker. Yet structured interviews outperform free flowing conversations. How can firms see past charm without alienating strong sales talent?
• 1:07:45
  Speaker C: I would say sales might be the one role where I would go ahead and let charm influence you. I think that in interviewing across roles and just interviewing in general, the more like, the more their job is like being in an interview, the more you can put weight on the interview versus on a work assessment or something like that. I love interviewing and hiring for salespeople because it's the one role where I don't really have to try to like Handicap how much are your skills in interviewing? Shading what I'm receiving right now. So if you're airing for a maintenance guy or a plumber or a computer software engineer, those roles don't really give you a lot of necessarily interviewing skills day to day and what that work is. So you really got to look past how smooth talking they are and how well they represent themselves and try to handicap out their interviewing skills. Sales, I'd say go ahead and let them stand on their own two feet in an interview. Then also test what other skills you have in whatever ways that you can and weight those as well. Kind of the polish versus authenticity angle. Incredibly, I found that introverted salespeople outperform extroverts on average. Sometimes the best part of sales is shutting up and listening. And so I think that ability to listen is something you should be very intentional about figuring out how you can, you can judge that Then also, you know, think about where I was in New York City and financial consulting, you know, sitting in some Swiss bank boardroom trying to represent our company. Expectations for polish really vary quite a bit in subculture by subculture basis. Or one man's polish is another man's inauthenticity. So I think that, you know, if you've done the work as a leader and have a strong point of view on what your culture is and who you're serving, who you're working with, that's the lens through which you should be interviewing such things as polish versus authenticity. So it's, it's a unique thing. You know, my book is a nice general place to start. A lot of these things can be learned in our broadly applicable. But then there's more unique specifics to industry, to job, to company that you can tack on top of that and get a little bit more nuanced. But that's a really, really interesting question.
• 1:10:17
  Speaker A: I'm going to go into another part of our industry. Property management roles face high turnover and operational risk. You cite staggering return on investment from integrity testing. Should commercial real estate firms treat integrity testing as primary risk management tool for on site roles?
• 1:10:42
  Speaker C: So I'm going to have to give some context here and I feel like I almost have to pitch the idea of integrity testing to your listeners because it can be so foreign, but it's incredibly powerful. So earlier I talked about how raw intelligence IQ is a differentiator and almost always a positive. That, that really does help pick a better candidate. Imagine you had someone's GPA and you had their SAT scores and maybe they went to Law school or something. So you had an LSAT or something like that. All these different ways of judging someone really aren't that differentiated. You're just looking at how they took a test and then we maybe had some kind of book learning or IQ or something. So sometimes the more you assess a candidate, you're not actually getting much more value out of it. What you want is something where if you do one test and then you do a second form of assessment, it really is counterbalancing that. And complementary integrity testing is the most complementary form of testing that I saw broadly to these ways of assessing people's kind of intelligence and drive and competence. Because it's a little bit more on the character angle. There's tests out there which you can send someone through maybe a 25 to 50 question multiple choice test on a computer and ask a series of questions about certain behaviors and their attitudes towards them. For example, would you get violent at work? Would you use drugs or drink and drive? Would you steal from your employer? Things like that. And you know how much they agree or disagree with these answers. And the pushback that I always get and I have myself as well. Why would anyone answer anything other than the most squeaky clean answer to all? But let me ask you this, John, like, do you ever drive your car above the speed limit?
• 1:12:39
  Speaker A: Of course.
• 1:12:41
  Speaker C: Of course. Yeah. It's no big deal what you just admitted on a recording to breaking the law. How could you do such a thing? So when people are answering these questions, they tend to maybe fudge a little bit. And if someone who has stolen $1,000 from work might say, I would not steal $1 from work, I might steal a little bit or something, and they tend to show their cards. And there's some wrong statistical validity to getting people who not only it turns out, have more integrity in their work, but also the correlations are they take fewer unexplained absences, they file fewer spurious workers comp claims, they have better impacts on the culture and things like that. So there were a lot of these soft skill or kind of cultural impacts that were correlated with how people take these integrity tests. There's also some now kind of algorithmic checks to see. You have to guess when someone is lying on them that seem rigorous as well. So I think anytime my work involves employees accessing individuals personal spaces or their homes or their private information and things like that, I would have a very high standard of testing character of those people. And I think integrity test is a fantastic way to do this. They're not Expensive. And some of the firms, for example, a janitorial firm, I think, had like a 4000% ROI on the money that they put into integrity testing and ended up speeding up and improving their entire interview process by having to speed, I think, the second step after a screen call. So something I would absolutely recommend to anyone in the property management or hospitality realm at all and something that a lot of people haven't heard about commercial
• 1:14:35
  Speaker A: real estate struggles with diversity. And you warn that AI can automate old mistakes. If firms train AI on past top producers, are they hard coding bias and narrowing future talent?
• 1:14:54
  Speaker C: It's tough to answer this question because, you know, the listeners might have very different experiences with this information or this area. And so what I'll, I'll say is there's an AI and automation arms race going on right now between companies and candidates, because on the candidate side, you can set up AI right now to apply to a thousand jobs with customized interview resumes and customized cover letters on your behalf. Yep, I've been recruiting a lot and I've had roles with a thousand candidates a week. I've had roles with 14,000 applicants. And at first they're mostly qualified looking. So it's an absolute deluge of candidates. And so you need some way to sift through that. On the employer side, there's, you know, this arms race is exemplified by AI filtering, AI scoring, and even firms are getting into AI running the interviews for them. Something I would caution firms to be careful in how they use that because a bad employee experience, sorry, bad candidate experience, is the fastest way to chase off people who have other options. Amazon and other firms very famously in the news have run into some problems where they took old employee data, fed it into AI and had AI start trying to find key candidates that were likely to succeed. And it ended up finding candidates that very much matched all the attributes of the firm at that point, some of which may have been pertinent, some of which may not have been pertinent, some of which were, you know, protected aspects of identity. And so caution firms, be very careful in doing this. I believe in New York and perhaps Colorado and other places, laws are being passed right now where you can be liable, even if you have no coding in the algorithm or in your automation, against protected classes, just if there are less than ideal outcomes to those protected classes. So this is a very risky thing for firms to be involved in. I'd be very careful in doing it. That being said, there may be, you know, creating diversity out of thin air in some of these industries. Can be a very very difficult solve a problem. I think that AI isn't necessarily the first place my mind would go to tackling that. It would be to like I said earlier in the interview where I hired a very non traditional candidate for a role. It's. It's really not the AI's responsibility or perhaps capabilities to find these candidates but it's on the leader to be creative and thoughtful, slow down and look in places that they haven't looked before before and take the responsibility on the humans. Leading organizations to think about how to solve these people problems versus just reach for the familiar. And this can be tough because honestly it's like Every leader has 500 emails in their inbox and reaching for the familiar is where you want to go, but I think you want to be intentional about it. The good news is that if you do swim upstream and find these different opportunities, that's kind of the money ball approach to me in my mind where you can find the undervalued assets out there who don't necessarily fit the mold also have less demand after them. And so you can perhaps get more kind of bang for your buck and you can get that extra due diligence richly rewarded by having great talent that's actually worth, you know, getting creative and getting thorough about finding.
• 1:18:26
  Speaker A: You introduce candidate abandonment, abandonment Losing top candidates because processes drag. And you mentioned that earlier in commission environments where time kills deals are commercial real estate firms losing their best people simply by moving too slowly.
• 1:18:47
  Speaker C: For many, many rules, top talent is opting out of these dragged on bureaucratic multi layered interview processes and the victimized companies have no idea what they're missing out on. Everyone real estate knows time kills deals on the real estate side. But there's been a lot of data shown and that we found in our research that time and stages also kill or diminish your ability to hire. One stat that sticks out in my mind is for some, for many roles they found through, I believe it was LinkedIn Commission research report that every day that dragged on was a 10% of the candidate pool were no longer able to be hired because they had moved on to something. I don't believe that was the first step. It was around the offer stage. But once you've interviewed someone several times, you spent several weeks with them, you know, they're also talking to other firms out there and you know, maybe something even as much as 10% per day you're losing out on. To me this is one of those really red flashing light data points for the leaders who are listening because these are the costs that you actually are living with, but are very hard to capture, aren't easily seen. The people you don't hire and what you miss out on is hard to quantify, but it's real.
• 1:20:25
  Speaker A: So many boutique firms run candidates through a meet all the partners gauntlet. Your research shows diminishing returns beyond three to five interviews. How do leaders mistake consensus seeking for rigor? And how should they rethink that process?
• 1:20:44
  Speaker C: I love this question because it's one of my top recommendations. People ask me how to change their processes to improve them again and again. That three to five interview window has been shown to be sufficient. And what's even crazier is that if, John, if you're interviewing the candidate and I pull you out of the room four to five minutes into that interview, I say, what do you think? Should we hire him or not? You write down your answer, go back in for another 56 minutes. There's almost no chance you're going to change your answer from the first four minutes. When you think about it, three to five interviews and interviewers are making up their minds after four to five minutes. Decisions are actually made in about 20 minutes total of interacting with the candidate, maybe to an 85% number. So you really need much less time than you think if you ask targeted questions. That being said, that four minute instinctive gut reaction can be improved. And what I train people to do is stick to the four to five interviews or four or five interviewers. And after that first five minutes, jot down your impression on the legal pad that you're writing on in the room, put it in paper in front of you, and then don't just try to go down the rabbit hole. Confirmation bias. Spending the rest of those 56 minutes trying to confirm your impression, test it, and actually see if you can find evidence of the odds. Wow, this person really knows.
• 1:22:08
  Speaker A: Excellent advice.
• 1:22:10
  Speaker C: Yeah, it's excellent advice. Check yourself, live right in that interview and challenge your bias. And if the candidate does pass applying colors, you're going to have even more confidence. That is really hard. One confidence versus just assuming and then doubling down and doubling down.
• 1:22:24
  Speaker A: Okay, now let's go to the next level. If you've made that decision, you said 85%, you're probably six months down the road. The guy doesn't work or lady doesn't work out. Can you look back at that process and see, oh, I missed something by not spending a little bit more time asking the right questions.
• 1:22:48
  Speaker C: So what I recommend doing, particularly for roles where you have multiple people come through. You hire this repeatedly, not the one off role. If you've had one HR person or one webmaster for 10 years or something, you don't really have enough data there. But roles you hire repeatedly. I would capture performance and retention information and connect that back to the data that you fill out and capture in the interview process and the rating resume review process and just, just start building up some context over time so you can go back and test those hypotheses. You can, you can really improve. Many organizations have improved by figuring out which data points matter and which don't. You know, for most roles, it probably doesn't matter how tall someone is, but for a jet fighter pilot, actually it does. Or if you're going to be on a submarine, actually it does. So the random data points that could matter are role specific. For some roles, you know, it doesn't matter what someone's hobby is and that can be unfruitful path for many interviewing interviews where people kind of get down a rabbit hole and it doesn't really matter what hobbies, but you got someone who you're hiring to work on your fleet of trucks and in their free time they love tinkering with their car. That might actually be a signal. I would cast a little bit of a wide net. And one of the most consistently predictive assessments is called empirically keyed bio data. In other words, data about someone and their background. That is not a matter of opinion, but it's actually factual, it's empirical, yes or no, they have these capabilities or backgrounds, whatnot. So over time you can actually build a pretty strong picture of what does matter and what does. And that I think can also help with the diversity angle too. And then one thing I wanted to talk about when you asked about kind of the consensus model, meet all the partners and all the managers going through 7, 8, 10 interviews, meeting all these people, in my opinion, a lot of the time I don't want to offend people, but I think that that is a symptom of lack of ownership in the organization and lack of commitment. And what they're really doing is not broadening the surface area of assessment, but they're broadening the surface area of blame. If it goes bad, we all got to talk to them. That's funny. It's not my fault. I think it's a dodging of responsibility and actually makes sense from the individual manager point of view because you're defusing your own potential negative outcome. So I think that, that if I was a leader and I had hiring Managers, I would put them in charge, give them the responsibility and let them live with a good and bad decisions and not second guess them. And you have Monday morning quarterback. But just make sure they're following a good process. And even the best process will have false positives. You hire someone who doesn't want to count.
• 1:25:44
  Speaker A: I hate to fall back. What you just reminded me of is I was in a fraternity in college and so when you judge a member, one person at least in my fraternity could blackball a prospective member. So therefore we had every person.
• 1:26:08
  Speaker C: Oh my gosh, they would meet everyone.
• 1:26:12
  Speaker A: And so to me that's a mentality. And you know, for certain people that were in that fraternity culture, that may be the way they look at hiring. And it could be in the same on the sorority side too for women, I don't know. But you know, if you were in a sorority and you blackballed a girl, a woman that just you didn't feel was a cultural fit, everybody else agreed, didn't agree with you, but you, you had that capability of being the one person. So I just, to me, what you're saying is that is the absolute wrong way to hire people is what you're saying.
• 1:26:53
  Speaker C: To some extent it's not optimal for business growth and business results. But you know, one thing I found that kind of shocked me in the real estate world was how many other dynamics there are at play. Sometimes you'd look at family shops, there's the P and L, but there's also another P and L. Bottom line, in a family dynamic, there's a lot of developers who have a lot of passion or ego or curiosity or creativity that they may prioritize. So I would just say make those decisions with your eyes wide open. If you want to establish cultural consensus as your North Star, you are sacrificing business perform. But that's up to you. Don't lie to yourself and say that you can have complete consensus and a slow methodical hiring process and get the top down.
• 1:27:43
  Speaker A: Well, I think another part of that, another part of that is how dominant is the leader of that organization. So if you're in an entrepreneurial situation and all decisions stop with one person, start and stop, then that one person they're hiring is weighted very strongly. Where do I need help, where I'm weak. So I'm looking for somebody that can do that. They don't have to be great at everything else, but they better be good at that one thing because that's what I need help with. So it may not be the conventional Large company hiring process in that situation, maybe a little bit unique.
• 1:28:29
  Speaker C: Sure. And, you know, there's something to be said for kind of cultural fit. But I think when there's hires, you know, slight tangent. I think when there's hires that don't work out, there's strong research that a lot of the responsibility for that lack of cultural fit is on the company. It's not just the filtering, it's the onboarding, it's the training, it's the getting to know them, it's the meeting them. Two companies who are very similar could hire the same person and if they have a good onboarding experience or some bad onboarding experience, they could show up completely different. So I think, unfortunately, it's not just fusion of responsibility and hiring to this like hiring by committee culture. There's also a blaming on fit or culture or the candidate when. And really the company could have, the organization could have made the whole situation pan out better had it just taken on more of a sense of ownership.
• 1:29:27
  Speaker A: Interesting, interesting.
• 1:29:29
  Speaker C: It's, it's very challenging. You know, it's a high bar as a leader to be seeing this research and seeing these insights in black and white and realizing, you know, I've, I've had plenty of hires not work out and, you know, every person I end up firing only gave me more motivation to try to get better at hiring, at onboarding, at leadership. And sure, there's, there's no worse day for a leader when you're like, man, this isn't working out.
• 1:29:56
  Speaker A: So what about when you were an employee joining a company that you regretted six months later, oh God, why did I do this? So it was your mistake joining it. Did you look at that hiring experience thinking, you know, I wish I thought about some different things when I was interviewing for this job.
• 1:30:21
  Speaker C: I've definitely been in those experiences where right away I knew this is not where I want to be long term, multiple jobs. I've never taken down the LinkedIn private setting to recruiters that I'm looking, but I never went back too much and beat myself up about it because I tried to make the best decision I, I could with information I had at the time. Yeah, but kind of back to that lily pad mentality of this is where I am now and, you know, it's opening new doors from the room and now and where does that leave me? Just not feeling like I made a mistake and I have to live with it forever. And I, I try not to blame the company either, or the hiring manager either. You know, if they should, I'VE definitely been in situations where the recruiter just really sugarcoated it and it turned out it was a real life place with real life human beings with all their flaws. And I tried not to get dragged too down by mistakes. But people
• 1:31:20
  Speaker A: across your military service, startup adventures and corporate roles, what core leadership philosophy do you live by? Are there certain principles or values you consistently bring to every team you lead, regardless of the industry?
• 1:31:38
  Speaker C: So one thing that's very important to me, which we kind of talked on a little bit about experience, military versus civilian, is I'm really animated and motivated by teams where it's more than just a day job. You're not clocking in, you're not just talking out, not just holding down a seat. And the big corporate world, to go from a team and living together in a war where you depend on each other day in and day out, to big four consulting, I felt like everyone had much more kind of a free agent mentality, much less camaraderie and cohesion and commitment. That's part of what attracted me to the startup world, is you've got these small teams, these small organizations, you know, higher highs and lower lows, but it brings you together and can have more of that social bonding at work. And to me, I specifically look for opportunities as a leader to create an environment for people who are looking for more connection and mission and meaning at work versus just a paycheck, feel at home, feel like that's the culture that they're getting. And I don't think that's for everyone. That's not what I'm saying. You know, if you have interests and duties and things outside of work and maybe you don't want necessarily the higher highs and lower lows of the, you know, a startup roller coaster, that's a good thing to be aware of. But for me, particularly after having, you know, the excitement of my formative years in my twenties were the excitement of the Marine Corps and the intensity of it. I just found that that's kind of how I was wired and that's what I was looking for. And so I see myself taking on challenging roles and risky roles and roles where that the challenge brings people together. And I have a lot of affection for the people and the team I build at Saunder and other places years and years later in ways that, you know, I don't from the big corporate backgrounds, when I've got it stops in those places.
• 1:33:38
  Speaker A: So that's great.
• 1:33:38
  Speaker C: That's really resonated with me.
• 1:33:41
  Speaker A: Looking back, what hiring mistake taught you the most and what did you cost you at the time?
• 1:33:49
  Speaker C: So I opened my book with one of the worst experiences of my professional life, where I had to fire somebody three weeks after I hired her. And in the hiring process, interviewing process, everyone else voted to hire her. And I just knew it wasn't the right fit. And I just couldn't put my finger on why. And I couldn't articulate it. And I kind of just went with the flow and I should have stood up and I should have had some stronger conviction backing up my hesitancy to hire this person. And it just didn't work out immediately from the beginning. And I literally think it was week three. I had to hire, hire, and just it was the most miserable feeling because it's 100% my fault. I absolutely put this person in a position where they couldn't succeed. And that was on me. And I would say it, you know, scarred me for years. And I really used that as motivation to improve my skills and improve my learning and improve my process so that that wouldn't happen again. And, you know, ruined her day and impacted the people in her life and her family and who knows who that impacted. So you get a hiring decision, right, you get people leadership, right or wrong, it really pulls it out.
• 1:35:03
  Speaker A: So was that a gut feeling? Was that a gut feeling up front that where you were hesitant, or was it. Was there some. Some evidence that you got in the interview with her that told you?
• 1:35:15
  Speaker C: Yeah, I'd say a little bit of both, but mostly kind of a gut. And I just didn't know how to pursue that gut, how to pursue that into something more tangible and into something more rigorous in our assessments. So this didn't feel right.
• 1:35:27
  Speaker A: Put yourself in that situation today. How would you handle it differently today based on the evidence and all the research you've done? What would you do today?
• 1:35:37
  Speaker C: Yeah, I love this question. What I would have done today is been a little bit more clear on what we were looking for. Like I said, kind of dissecting the role. More specifically, I would have had a more structured and standardized way of scoring assessing candidates. And I would have had just more objective criteria. Perhaps even like we were talking about sample work project or something like that so we could kind of see them in action. Because we just talked about a role which wasn't a conversational sales, business development, networking type role. And we had just had a conversation. And as soon as we got her on a computer and taught her the software, we realized her computer skills weren't there. And the assessment interview should have tested the computer skills, if that's how, what we needed from this role. So I mean I had like the inkling, but I didn't have. I don't think the answer is always trust your gut. That's not what I'm saying. But I just didn't have the rigor and the wisdom and experience to know how to kind of manifest the veto vote that I had.
• 1:36:38
  Speaker A: So will your book provide that for readers and, you know, observers?
• 1:36:46
  Speaker C: Absolutely. It should give you listeners a really strong starting point where every chapter that we break down, each stage of the, the recruiting journey has its own kind of checklist at the end that you could copy out of the book and start working to kind of audit and prove your own interview process. But then it's a starting point too. You'll have to take the learnings and use a little of your own wisdom experience to tailor to each role, to each company, each situation and industry.
• 1:37:14
  Speaker A: Based on what you said earlier.
• 1:37:16
  Speaker C: Absolutely.
• 1:37:17
  Speaker A: Interesting. So final question, Patty. If you had a giant billboard anywhere on the Capitol beltway that millions of people would see every day, what would it say and why?
• 1:37:31
  Speaker C: You know, a little, a little Instagrammy, but I think it would say take care of each other. And that really resonates with me deeply. And also I think, particularly when you think about the business world, think about what interviewing and helping people get into the right role is. I think the right brains, quantitative, male dominated, tough industry that real estate can be, misses the mark on some of these softer and interpersonal and really personal aspects of taking care of each other. Doesn't appear on some P and L isn't going to appear in some board meeting. But life's bigger than business. And if you live even within business, like the teams I've led with a caring attitude, taking care of people and seeing them as full human beings first, I don't think you're going to regret that. I think when you look back your legacy, it's going to be brighter in the day to day business side and outside that it really matters more. So if I could, you know, put that into the minds of everyone as they're struggling through the D.C. traffic day to day, that's what it would be. Even if it sounds a little trite, I think it's trite because it's true.
• 1:38:50
  Speaker A: So anything else you'd like to share with the audience? Talk about, you know, you, I know you're writing the book, do you do any hiring, consulting at all or anything like that? Talk about that a little bit if you want.
• 1:39:04
  Speaker C: Certainly, yeah. If you want help on your hiring, the first place I would start would be, you know, check out the book, you know, Amazon or the new scienceofhiring.com and put the link here with the episode. I'm not doing necessarily a lot of consulting on this topic, actually, but my co author is. So you can reach out to us and we can see if there's materials or some help that we could give you. But always happy to connect. And I'd say look me up on LinkedIn. Patrick Beaks, we E K s. And just happy to connect. Stay in touch. And yeah, I hope that the book and the work that we've done goes out and helps a lot of people, helps a lot of careers.
• 1:39:42
  Speaker A: Well, Patty, thank you very much for your time and your insights. I really appreciate everything you've done and you're doing.