Kate Morgan—Custom-Fit Hiring: How to Build a Team & Accelerate Growth

Kate Morgan  0:00  
It always has to be for the fidelity of the company, and that company is made up of all of your people. So, thinking thoughtfully about how you bring them on board, your selection process, how you're going to manage them, is critical to your company's success.

David Bush  0:18  
Welcome to the Business Builders Playbook, the show that breaks down the systems and strategies behind predictable revenue growth to win in business. In each episode, we're diving into the proven strategies that separate the winners who scale from the losers who fail. This show is sponsored by BDR AI, the AI-powered business development platform that automates your outbound prospecting, so you can focus in on closing deals instead of chasing leads. Let's get started. Hey, welcome to the show, everybody. David Bush here with BDR AI, and man, we are so excited that you are watching this particular episode because I think you're going to be blown away by our guest today, Kate Morgan, and Kate is the founder and CEO of Boston Human Capital Partners, and she's also the author of the best-selling book *Custom Fit: A Straight-Talking Guide to Hiring Top Talent for Entrepreneurs and Small Business Owners* And Kate has spent more than two decades helping startups and small business hires to hire, develop, and retain the talent they need to grow. And as a part of the Business Builder's Playbook and what it is that we do at BDR AI. This is a perfect conversation to have. So, Kate, thanks for joining up with me today.

Kate Morgan  1:28  
No, thank you.

David Bush  1:30  
Well, tell everybody a little bit of your background and bring everybody up to speed on what you've been doing over these last two decades to help other startups and small businesses to scale. And then let's jump into the questions that I have for you today, because I know that these are going to really help some small to growing businesses and really taking their business to the next level.

Kate Morgan  1:51  
Absolutely. So the way I I look at my role in the ecosystem is so we are very much focused on earlier stage companies because that's every hire counts when you're in a small business, and you know when we think about small businesses, really 99.9% of companies are considered small businesses. They employ about 45% of people, so that's where the the bulk of of hiring challenges. That's where we see it, right? Because when you get into a bigger company, you have a lot of the levers, you have the processes in place, you have this you know departments. It's very different than founder-led hiring, so that's where I've always concentrated. That's why I wrote my book because at the end of the day, you can have business challenges, but scratch the surface, and it's usually a people-related issue. And my whole approach is not HR candy dish HR kind of approach. Like I want to bring truly a founder-led consideration for for hiring. Very different than HR.

David Bush  3:12  
Yeah. Well, you brought up an issue that a lot of founders are dealing with, and they've experienced at a much a very deep level, and that's the the high cost of getting hiring wrong, and not having the right fit. So, talk to us a little bit more about what are some of the less obvious financial, cultural, or even operational cost of making the wrong hire?

Kate Morgan  3:35  
Psychology, your own personal piece of fine. Yeah, well, I don't think people realize just what a burden it becomes because usually what happens, and it's always funny. People are always hesitant to let go of people. They try and you know figure out is there some way we can work through this, and ultimately the cost of the psychological burden of a bad employee on yourself is by far the worst. Because you can you can look at the data, you can say, okay, it's going to cost this much to replace this person. You can kind of put some numbers to subscribe to, you know, getting a new person up to speed and all of that-that's the dollar. But how do you how do you associate a cost when you're losing sleep and you're trying to focus on building and scaling a company when this sets you back and it sets you back in a lot of different ways, like even even just the confidence of moving forward, and and I'm even talking about executive search. Now we we walk into time and time again a lot of VPs of engineering. They they part ways with the founder CEO, and the founder CEO suddenly have felt a little bit like they were. Held, they were kidnapped by their technology executive because they just they weren't technical. So you have to get it right, and you gotta you you gotta give it more as much attention as your business plan as your hiring plan.

David Bush  5:17  
That's powerful. Well, there's a lot of people that throw people at problems, and so how do you? What's the best process based on your two decades of experience to determine whether or not a business needs another employee, or whether the underlying problem is an unclear process, or poor delegation, or just a role that's not been properly designed?

Kate Morgan  5:39  
Yeah, well, you know, it it boils down to well, there's two two halves to this. So we were kind of under this impression for a few years that it would be impossible to hire people. So people were like, "Oh, well, I found this person. I'm just going to hire them. I don't quite know the need yet, and they never really figured out what that role should be, and then they end up offboarding them. So I mention that because when we go in and we talk to clients, we want to know what the job should be-not today, but what success looks like 12 months out. That's where you really understand what the need for for the role is. I can't tell you. I I did a search for essentially it was a commercial GM, and I went in and I talked to. There was two co presidents. I sat there and I said, okay, well, what will success look like at the end of the search, you know what? What will this person be doing, and what every quarter would lead them to that success? They couldn't tell me. They could not tell me what success would look like. I'm like, why are we even looking at this search? We need to have that in place. So that's kind of like a little bit of what you would do with your own business plan, like I'm going to go out this way. This is how I'm going to attack the market. Blah blah blah. Well, why don't you do it with your hire? So

David Bush  7:11  
that's that's an interesting perspective, and I know that there's you know a lot of founders that are saying you know okay that's one more additional thing that I need to do. So simplify it down to, and I know that you wrote this inside of the inside of the book, but talk to us just straightforward. What does a hiring plan look like that makes it simple for founders to just put it together and start working according to

Kate Morgan  7:34  
it? Yeah, well, I mean, it it starts with your business plan, right? So, but you have to have these gates. So if you're a founder and you know, because you're on the sales side, right? If you're your founder, you know, you want to know when do you bring a you know a sales rep on, right? Well, half the time, like the battle is you need to have product market fit in order to be able to go out and find a salesperson, because you're going to have to be testing the waters and seeing how your, you know, how that person is going to go forward, right? So it's kind of the same way when you're hiring across the board is understand okay what what triggers what levers are there to say, okay, now we are ready to bring on marketing. Now we're ready to bring on sales. What about additional engineering? It all has to be predicated on what you need in a year, because it's kind of you know like when you work with a business coach, that's what they're going to be saying. What do you need to be successful this year? Back into it. It's the same thing with hiring, but I think everybody gets really excited about hiring, and so they skip steps. And even like in a sales process, right? You can't skip a step because as soon as you skip that step, you're going to lose control of the sale, and it may not come to fruition, so being really pragmatic about how you want to look at hiring, what those triggers are to indicate that you want to move forward with somebody, knowing projecting out what success will look like in 12 months, all of those start to create this narrative and helps you make a stronger case for why it's time to bring somebody on.

David Bush  9:26  
Yeah, there's a a great phrase out there that says, "Where there is no vision, the people perish. And so, without good vision, businesses will oftentimes maybe they won't perish from existence, but they'll oftentimes perish from scaling, right? They won't end up doing the things that they are capable of doing because they don't have a clear vision of what that looks like in the future. And and this is also true for the actual new hire, right? So, the old days of just giving them responsibilities and qualifications without having any real measurable outcomes is over, right? I mean the new. Game is about defining success and what that looks like, and having a scorecard of some sort to keep that candidate accountable and keep that new hire accountable. Talk a little bit more about how you recommend doing that.

Kate Morgan  10:12  
Well, with accountability, I mean, it's interesting because one of the things when we're talking about hiring on the earlier stage, is you really need to make sure you're hiring the right person, as we just said. So, in a lot of situations, we're recommending that they actually bring on a you know have have the candidates run through product or work product or business plan, so they're actually going to have the ability to you can track where they're supposed to be. So, in part of the the job description, so when we do like a success stage job description, that's also helping to say, all right, we know we want them to be here after three months in, after six months in, etc. So then you're starting to be able to use that to connect the dots to make sure that they are being held accountable.

David Bush  11:14  
Well, I know that there's a lot of founders out there that are in the position where they're you know short on time. So the idea of actually looking beyond the resume and doing all the due diligence and all that stuff-it's become challenging. And I'm sure that with AI and other tools, there's resources available. But what would you say that founders should be looking for beyond experience of the credentials that oftentimes show up on a resume to determine whether or not they're a right fit?

Kate Morgan  11:41  
It boils down to your your values, right? So, I I hate even calling them core values anymore because it was such an overused expression, and most of the time they're really just simply, you know, they're they're aspirational words. What we look at is for traits, which really help to narrow in who you are actually looking for. If you can't be able to determine who those people are, then you're just looking at you know a recipe of skills. Skills don't actually make make an employee. There's just so much more to it, and people can talk about. Well, I'm a time constrained founder, but let me tell you: you go through a bad hire, the cost and the time invested on that offboarding is going to be far more significant than focusing and you know taking the time and energy in the beginning.

David Bush  12:52  
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Kate Morgan  14:10  
Yeah, I think you know the the easiest way to to respond to that is when you're interviewing somebody, you're on your best behavior. They're on their best behavior. So the only way you can really get to a place where they're authentic is to disarm them. So in in my own course, I am very much a conversational interviewer because I need everything I can to get them to that comfortable, authentic point. But again, if you can determine what those core values or traits are, then you can start to build interview techniques or questions that are. To help, so you actually build out this rubric that can support questioning those various areas. That takes it away from the, you know, interviewing about tell me about a time when, yeah, you need some of those for the skills, but how can you really align with them on a level that's going to be a lot deeper because your your people are what will give you your competitive advantage. But if they are an unhappy, if they're a mismatch, it's never going to work. So they could be the greatest employee, but if they're unhappy, what do you have? Nothing.

David Bush  15:42  
Yeah. Well, you know, was it Drucker that said, you know, culture eats strategy for lunch, and and the idea of actually finding a right fit culturally is so important. But it's very difficult to have that happen. So, what are some things that you could recommend for founders that are looking to hire people that really kind of fit the cultural model of what it is that they've put together in their organization.

Kate Morgan  16:09  
So, with when anybody talks about culture, I love it because they usually can they describe their culture in very nebulous terms. So we we take a very intentional route. So we actually subscribe to what Gino Wickman had recommended in his book Traction. So the entrepreneur's operating system. It you know I expand on it. Right, it's my whole world. So that's what I'm going to focus on it. Ended up being a very small fraction in his book, but really, you look at the traits that you admire in people that you want to replicate in your company. Now, if you're early and so early that you don't really have a guidebook with you know employees that are already on your payroll, then look back to previous experiences. But once you have those core values, you can't you can't waver on them. They have to. It becomes your edict. So the best way that I tell people to think about these core values or traits is if you can't say at the end of them, or you're fired, so you can't be this. If you don't have this, you'll be fired. Then it's not a core value, and it's nice to have. It's a luxury. So that's why it's so specific that you want to find these core values that you can really hire and fire to, because that becomes your edict. And once you get to edict, and everybody's following suit, that's when you develop an ethos. And your ethos is what's going to create psychological safety and improve your hiring, but also improve your culture. Because all of this means that people aren't going to leave you; they're going to be staying for you, because again, that psychological safety-that's what we all want. And if they can feel super confident, they're going to do amazing work.

David Bush  18:14  
Yeah, putting them into the right environment where they can truly thrive and be the best version of themselves is ideal for every individual, and that definitely drives the culture, right? And that attracts more people that are high-quality talent because they're going to be so fulfilled and so thoroughly enjoying their environment. They're going to refer all their friends and family members that have the the skill sets over. So maybe there's a story that you have in your bank of resources over the last couple of decades, where somebody actually was prepared for filling the position and they weren't in the urgency trap. You know, I mean, so many of us we wait to the last minute, and you know, when we need them, it's hard for us to lead them because we need them so bad, and the position has to be filled, and then oftentimes our emotions or our overwhelm can dictate our hiring decisions. So, any best practices or strategies that you found to be successful, or maybe a story of an example without telling the client's name about how they went about avoiding the urgency trap.

Kate Morgan  19:20  
I mean, by the time they're calling me, they they're in the need because of how we operate. So I guess I'm struggling with the the question a little bit because we we will slow it. I have I have a founder I'm working with right now who wants to have a CTO on board within five weeks. Well, that's beautiful. You you can't hire an executive. The average time to hire an executive is three to four months. The fact that I already have, you know, I have candidates lined up like rockettes for this person. Doesn't mean that they can skip the step. So my coaching is stop it. Just why you had that date in your mind, that that doesn't help you because now you're putting all this unrealistic pressure on yourself as well as these candidates. Candidates aren't like going to the freezer section in your grocery store and pulling off, you know, an ice cream and saying, "Okay, well, this is vanilla. Let's go with this one. You know, like no, it you have to have all of these things in line to make sure that we're doing the right thing.

David Bush  20:33  
Yeah,

Kate Morgan  20:34  
I I get a little frustrated because, you know, I actually side usually with founders, right? Because that's how I identify. I don't identify as an HR person, and I I feel for founders because they can feel really really trapped. But at the end of the day, we have a responsibility to our teams. It always has to be for the fidelity of the company, and that company is made up of all of your people. So, thinking thoughtfully about how you bring them on board, your selection process, how you're going to manage them, is critical to your company's success.

David Bush  21:18  
Yeah, and I know that right now there's a tremendous amount of people that are, you know, being in the exploration mode about, you know, what type of right talent model fits them, whether it's a full-time employee or a fractional or a contractor outsourced partner. What are you seeing on your side, and and how can you maybe coach us through how to make the best decision when it comes to filling a position when you have all these different options.

Kate Morgan  21:45  
Yeah, well, I will say I think leveraging partners really does help in a lot of different ways because you can expand and contract. I mean, I've been operating my company for 15 years on this whole we can handle the ebbs and flows of your hiring, and it means that you know. I mean, we've we've had clients for you know 910, years because they they appreciate this ebbs and flows, and they know that we know how to work with their companies. We're acting as their internal talent acquisition team, so they feel like, wow, why would I go somewhere else? So I think there's a lot of value in leveraging fractional help as well, even on an independent, with the exception of if you're fractional person, they they really need to be insured because you need that error, you know the E and O errors and omissions. Because if they're in their your stuff, also you know when we talk about fractional, I think a lot of people are like, "Oh, okay, well we'll bring 1090 nines on. And I, you know, always talk about 1090 nines are literally like risky sex. It may seem like a great idea in the moment, but when you actually peel it back, you could end up being liable for for this person on a lot of different levels. And we see lawsuits. We see people trying to buck the system. You know, because people people are people. You know, you can't necessarily trust them all, so that's that's you know fractional versus partners. When is it time to bring in a full time person? Again, if you can project out that you will have a consistent need for 12 months, and then you can even see okay, once we get to 12 months, what does the next six months look like? And you start to look at it, you can build a reason to, you know, defensible reason to bring somebody on board. But yeah, I think a lot of the earlier stage companies they can do a lot with leveraging outsourced partners.

David Bush  23:55  
There's a lot of different options. That's why it's so great to have a person like you, you know, on the speed dial, so you can, you know, guide us through those decisions. And as we land the plane here, I'd like to ask you this one more question before we get into a little bit more information about what it is that you're doing for founders. But we talk to a lot of founders that want to scale, and oftentimes they're in this comfort cave on the journey to the peak of the mountain, and there is a bit of risk. There's a bit of sacrifice. You know, maybe it's you know coughing up more money than they want to cough up to go make the right hire so that they can get out from underneath the day to day or the operation and go do the things that they're best at or that they're the most uniquely positioned for. So when it comes down to you know delegating to elevate or delegate to elevate, what would you say is the best coaching that you could give a founder that wants to two to 10x their business in the next two to five or 10 years, and and they just have this trap that they're kind of like limited by the ceiling of. Complexity, or the ceiling of fear, or just concern, or is that now the right time? Is AI going to be something that's going to come in? I know that there are a lot of different conversations that we're having with some of our clients right now.

Kate Morgan  25:12  
Yeah, well, I think there's a distinction between growth and scale. So growth, growth is kind of shoveling against the the tides, if you will, right? Because if you're if you're super insecure, if you're feeling like these things are hitting you, and then you're like, okay, I get a I get a breath, and that well, that's that's the psychological you know impairments that a lot of founders get to, and that's why they cap out. We, I so only 4.5% of companies get over a million dollars. So that the reason behind that is because usually the founder themselves are limiting their ability to scale, and we see it time and time again. Particularly, like I think of even accounting firms, right, or some of the the service providers. They they think about every person they bring on is going to impact them. You know, it impacts their bottom line, but as a founder, you're suddenly all of a sudden responsible for another person on your team, which can be exhausting, particularly if you haven't really perfected the hiring motion. I don't think that particular founder is actually able to scale, because if you have, if you need a therapist to get over the concerns of being perfect, because again, most most of the time they're they're thinking, well, I can't control this. If I can't control it, then the quality will lapse, and I'll never get to that next level, all of this, that that noise in your head, that busyness, how can you scale? So at that point, you might as well just go sell, or it's going to be a lifestyle business. When you get into the mentality of really wanting to scale, scale says, "I can release this. I can. I I am moving myself beyond the tactical moving the needle personally forward. That I can trust hiring somebody that would be able to carry forward, whether it's marketing or some other facet of the organization, sales. Right. That that takes more than you know a therapist. Like you just have, yeah, you're born with gumption.

David Bush  27:51  
Yeah, right. Yeah, and there's definitely people that I think can grow into it. They just have to be willing to let go of who they've been and what got them to where they are today? Because that is no longer what's going to get them to where they want to go. They have to transform. They have to grow, and that's not just from a business standpoint. It's from a mental standpoint. So, and this has been so enlightening, encouraging. Talk a little bit more about where people can go to get the book. What's the best places than Amazon. Do you have other resources on your websites? Tell everybody where to find you online.

Kate Morgan  28:25  
Absolutely. So yeah. So you can definitely go to Amazon, Barnes and Noble airports, even thanks to to my publisher. So it is published through Forbes. So I also have a blog that goes out on Forbes's blog, but you can either go to Bostonhcp.com for my company or for speaking events and support that way. I also have my author page, which is KateMorgan HCP.com.

David Bush  28:58  
Very cool, and we'll put all that in the show notes for everybody that's watching, so that you can reference back to those. But Kate, it's been such a pleasure getting to know you and to learn more about your experience, expertise, and education on this matter. And yeah, thanks for leading the way for others.

Kate Morgan  29:12  
Awesome, thank you.

David Bush  29:16  
Thanks for tuning in to the Business Builders Playbook. If this episode gave you some plays that you can start running in your business today. Hit subscribe and share with another revenue leader who's tired of the pipeline grind. Building predictable revenue isn't something you figure out alone. Whether you're looking to automate your prospecting with BDR AI, or you just want to talk through the growth challenges you're facing, reach out. We help business leaders just like you to build systems that actually scale. And if you're ready to stop being your company's highest-paid prospector, let's have a conversation. Reach out to us at BDR AI. Until next time, let's keep building.