Invest Like the Best with Patrick O'Shaughnessy - Kathryn Minshew - How Employers and Employees Should Build Careers - [Invest Like the Best, EP.103]

Episode Date: September 11, 2018

My guest this week is Kathryn Minshew, the co-founder and CEO of the Muse, and the co-author of The New Rules for Work: the Modern Playbook for Navigating Your Career. I’ve learned in business is that the quality of people and the culture they create dictate outcomes. Having made plenty of mistakes hiring, and having had many enormous successes, I am always interested in best practices for finding and successfully recruiting the right people. Given that Kathryn runs a jobs marketplace and has written a book on the topic, she is the perfect person to explore some the core concepts around pairing people with the right positions. We discuss how companies should market to prospective employees, how employees should represent themselves to employers, and the most common mistakes she sees across the hiring landscape. Please enjoy our conversation. For more episodes go to InvestorFieldGuide.com/podcast. Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub. Follow Patrick on Twitter at @patrick_oshag   Show Notes 1:31 - (First Question) Largest changes in the nature of work and how people approach finding the right job for them 3:27 – Can this work be jammed into a formula 5:18 – What strategies is she sharing with employers when it comes to hiring 8:31 – How long should the process take 9:33 – Biggest mistakes employers make in this process 10:39 – Besides the usual stuff, what can perspective employees do to bolster their chances 12:50 – How much more efficient will matching technology get in the years to come 16:00 – What will be the largest changes to work itself 19:09 – Will we move away from full time work into parsels of work units 20:50 – Most successful piece of content or content strategy the Muse has employed 22:34 – Advice for early stage entrepreneurs 26:24 – Kindest thing anyone has done for Kathryn   Learn More For more episodes go to InvestorFieldGuide.com/podcast.  Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub Follow Patrick on twitter at @patrick_oshag

Hello and welcome, everyone. I'm Patrick O'Shaughnessy, and this is Invest like the Best. This show is an open-ended exploration of markets, ideas, methods, stories, and of strategies that will help you better invest both your time and your money. You can learn more and stay up to date at investorfield guide.com. Patrick O'Shaughnessy is the CEO of O'Shaughnessy Asset Management. All opinions expressed by Patrick and podcast guests are solely their own opinions and do not reflect the opinion of O'Shaughnessy Asset Management. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. Clients of O'Shaughnessy Asset Management may maintain positions

and the securities discussed in this podcast. My guest this week is Catherine Minchew, the co-founder and CEO of the Muse and co-author of The New Rules for Work, the Modern Playbook for Navigating Your Career. I've learned in business that the quality of people and the culture they create dictate outcomes. Having made plenty of mistakes hiring and having had many enormous successes, I'm always interested in best practices for finding and successfully recruiting the right people. Given that Catherine runs a jobs marketplace and has written a book on the topic, she's the perfect person to explore some of the core concepts around pairing people with the right positions. We discuss how companies should market to prospective employees,

how employees should represent themselves to employers, and the most common mistake she sees across the hiring landscape. Please enjoy our conversation. What do you think more broadly speaking are the largest changes in just the nature of work, both the work itself, but also how people approach the problem, the matching problem of finding the thing that's appropriate for them. Well, I think that a lot of people today are looking at their career from the perspective of finding the right fit. And I think that's a really important change because maybe I'll use dating in marriage as an analogy. Several hundred years ago, arranged marriages were common.

A lot of marriages were, it was a functional thing. You married to get land, to get status, to support yourself. Careers for a long time also were somewhat similar. it was, I got to do something to pay the bills. And now we are, many of us are lucky enough to suddenly have a much wider set of options. And so people are asking themselves, what do I value? What do I care about? What gives me meaning? And in the personal realm, people are starting, obviously, you know, there's a sort of age-old quest for finding the right fit in a relationship. But I think a lot of those same lessons and stories have really interesting parallels in the

world of career because what I've seen over the last decade is a massive rise in 10,000. talented individuals, thinking about their career as finding a match or a fit. And this idea that each job or each career path might have benefits and drawbacks that workplaces have values and cultures, so to speak, and ethos. And sometimes you get part of a group of people and it just fits, it clicks. People can talk about jobs as feeling like they've joined their tribe. And sometimes you're the odd man out and it can be a very alienating experience. And so I think that as it becomes more common for people to evaluate roles and jobs, not just by classic criteria like how much does it pay me, but also by more sort of emotional or next level criteria such as, is this a mission

that I want to be part of? Am I learning and developing? How do I feel about the team and the leadership and the managers? Is this my tribe? I think that changes the way that people look for jobs and the tools they use to do so. How do you think about cramming some of this into formulas? So there's been many famous ones like Daniel Pink's comes to mind where it's, I think it's like autonomy, mastery, and purpose are the dimensions of fulfillment in a career or in a job. Do you think in those terms, given that you run a business that's effectively a marketplace business, is that how you think about it as something that can be reduced to dimensions? Or is it more idiosyncratic than that? I certainly think it's more complicated than a three to four element formula would suggest.

We do have something we talk about with clients called the three P's, people, purpose, and path. These are three things that are important to candidates, not all three to all candidates, but when you're talking with someone who's used to candidates are making decisions based on salary alone, it's often helpful to instead introduce them to the three peas. A lot of our candidates care about the people that they're working with. As I said, the teams, the managers, the other humans that they will spend 40 plus hours of their week with. The purpose is the overall purpose of the company. Why are they joining this company? What is the goal of the company to achieve? And is that resonant with them personally? And then PATH. What will their path be to learning, growth, development? What will they, what skills will they require along the way? Interestingly, Facebook did a major assessment of what drove employees at Facebook, what was very motivating to Facebook employees. They called it the three Cs. I believe it was community, career, and cause.

Exact same thing. Community being the people, career being the path or the growth and development, and cause being the purpose or the overall mission. So I do think that's a very helpful way for an employee. to think about what they can offer and in which elements. And for candidates, understanding that you may not knock all three out of the park on every job, but it's okay sometimes to work for a business with a purpose or a mission you find a little bit less inspiring if you're going to learn and grow tremendously. But how do you think about balancing those three and what matters to you

at different phases in your career? Beyond the offering of those types of things as part of the message to prospective employees, what are other strategies that you're communicating to employers? So as someone that hires people from time to time. It's fascinating to know, like, there's a million ways to do this. It seems difficult. It's incredibly hard to find a good match. What are the other best practices that you've learned in this experience at the muse and thinking about the problem? Well, I'll pick two off the top of my head. One is around attraction and one is around candidate experience. On the attraction front, I think that hiring managers and organizations, employers, are realizing they need to actually market to candidates. And a lot of the big changes and trends that have been

sweeping marketing over the last five to ten years are starting to show up in HR. So this means content marketing. Rather than just blasting job postings out there in the universe and hoping that great people will see them, how do you create content about your company, about your employees, about your sales team or your engineering team that might resonate with a particular candidate. And if it's really good content, you don't necessarily have to shove it out there in people's faces because your employees and people who follow your company might organically share it because it actually has interesting lessons or things to discover. So thinking about ways to to tell more interesting, authentic stories that are genuine and true to your employee experience,

and then get those stories out there through social media, through blog content, through partners like the muse or other channels, thinking again about talent attraction, not just as posting a job, but as really marketing in a thoughtful way to potential candidates. And I will put an asterisk on the word marketing because I think sometimes it gives people the sense that they can just say what they want. We are very innovative. We're an excellent team of high performers. But first of all, the language that I just used, that's, I mean, that's been done. It's jargon that's

over said. And so, again, that's why I really urge companies to get as specific as possible. Don't just say your engineering team invests in growth and development. Share a story about, you know, Susan or Jason on your team and the path they've had over the last few years and the projects they're excited to work on and how they've grown and developed. That's going to be so much more credible. Secondly, authenticity is important because unlike in marketing where if you falsely market an object or a service, you'll have a disgruntled customer, they might ask for a refund, that's bad enough. If you falsely market a company, a culture, a set of values, you end up with disgruntled and unproductive employees. And I think that has a far greater downside. So we can

circle back to that in a bit, but I think the marketing principles and the sort of analogy holds. The other thing that I'll speak to very quickly is candidate experience. For a long time, the hiring process was focused on picking the good people from a sea of applicants. And that was all they cared about. But it turns out, not only do you have to find the great people, but you have to actually convince them to take your job, because if they're really great, they probably have other offers. And the people you don't choose, they're human beings as well. And they might be the people you want to hire in six months or six years. And so companies are starting to realize that treating all of their applicants well, not just the best ones, is a really important part of hiring.

And so we've actually started to make some forays into candidate experience products. And we've also seen a lot of companies use their core work with the muse, not only to attract good candidates, but also to make sure that they're informed and treated well throughout the interview process. What are your thoughts on the life cycle of this process and whether or not it is generally speaking better to move quickly or take a very long time for employee and employer getting to know one another? In general, I think that once people are actively in an interview process, that speed is useful. because there's a lot of research showing that once, I believe it's once something like four or five rounds of interviews have been accomplished, additional interviews give you no marginal advantage. And so these lengthy drawn out processes, I think they take up a lot of time. We're all very busy. They also risk that your candidate is being courted by someone else who might move faster. So I think in general, while it is important for both sides to get to know each other, you can do that in a fairly abbreviated period, call it three to four weeks, depending on the.

the role. Obviously, the more senior a role is, the more that you may want to lengthen that timeline. But ultimately, I think companies should be thinking about how to do a very good job, but within an efficient framework. It makes a lot of sense and really squares squares with my experience as well. What are the biggest mistakes that you've seen employers specifically make in this process go over and over again? So one is assuming that just because you have jobs with a paycheck, people want them. That used to be true. But in this day and age, Again, a lot of the people that you most want to hire are going to have other options. So some employers, I think, don't realize that the onus is on them to step up to the plate and make a case for why someone would want to work there.

However, secondly, another mistake people often make is they assume that if they can't compete with Google or Facebook on perks, that the game is lost. And I'm here to tell you that is categorically not true. It goes back to the three P's or the three threes, people, purpose, and path. If you can offer great learning and development, if you can offer a team, that is, you know, that is this sort of people that would attract others to work with them. If you can offer a larger purpose to the work, there are plenty of great people who can be attracted by that. It's more important to be authentic to what you can offer and not try and compete with Google, you know, on the sort of free food and perks front if that's really

not something that your company is stand out at. Going back to this idea of the theme of your book, you know, new ideas for both finding in recruiting talent or being the talent and seeking out an employer, what are the most important things that you think prospective employees do on top of the traditional, like, classic signaling stuff like building a great resume. So you mentioned you started that McKinsey, classic example of a business where people like to see that on a resume, like a Goldman Sachs or, you know, whatever it might be in the vertical that people are trying to break into. Beyond that very traditional like resume building stuff, what are other things that people can do as they,

try to bolster their own story, as you put it, which I think a nice way to think about it, or credentials, however you want to frame it. Like, what can people do to improve their chances? So first of all, I think that a lot of people could get much more specific about explaining the experiences they already have, meaning that vagueness is not your friend in most job interviews. The more you can answer interviewers questions with specific examples of times that you did X, what did you do, why did you do it? The more detail, it can often help the interviewer really understand what you mean by I am detail-oriented rather than just telling them that, which most people frankly won't believe. We also often will recommend that candidates talk with a

former colleague or boss and ask them, how would you describe what I did in my last job or my current job? How would you describe some of my biggest strengths or biggest accomplishments? Are there any stories you remember that I really stood out to you? And really seeing your work experience through another person's eyes can sometimes highlight things that you should be sharing with potential employers because a very common truism of human nature is that the things that people are the best at often come so naturally that they don't even think of them as special. And so seeing yourself through another's eyes can be really helpful. Numbers are important in a resume and in a job interview.

The more that you can say you increased efficiency by 13% or you led to 30% fewer complaints, something tactical again, because if you think about it from the interviewer's point of view, they sit across from people all day who are telling them things like, I'm so great. great, I'm so great, I'm so great. And at the end of the day, the more tactical, the more specific, the more examples you can give, the better. Where do you think this is all going? So in all of these businesses that are, I guess, like, search cost reducers, I'll call it something like that, where it's easier to find a better match. It takes less time, less money, and you save more time on the back end because you're not switching employers all the time in the case of this marketplace.

How crazy is this going to get? So how much more efficient will matching algorithms or the ways in which you connect employers and employees get in years to come. Like is this progress that I think that we've been on going to keep going? Or is there some, you know, like you said earlier, like a diminishing marginal curve, right? Like it's how data intensive is this and how nuts will this become? Yeah. So I'm laughing because we have a long ways to go and a lot of improvement that I think will continue to see.

But there are also people out there today who are advocating, you know, a future in which You take a quiz and here's your job. Yeah, exactly. And honestly, I don't think that's ever going to happen, at least for the majority of people, because most people, just in the same way that it would be a little bit laughable to say, take a quiz and here's your husband or here's your wife. At the end of the day, people still need that human layer to assess intangibles. That said, could we be so much better and so much more efficient? Absolutely. First of all, I think it's, you know, again, five years ago, when I was first getting our first 25 customers on the muse, it was shocking for, companies to put an actual photo of their actual employees in their actual office on the internet. That is table stakes now, but it hasn't been table stakes for that long. And so I think that there's

still a long way to go in terms of getting more rich media to give you a sense, not just of headquarters, but of each individual office, hearing from different teams. So one of the things we're working on at the muse is if you're interested in a job at a company that is, I mean, honestly, anything over 60 employees, you both want to learn about the company, sure, but you really want to learn about the team that you're going to join. And this is even more true in a company with 60,000 employees. So how can we get this sort of high level information that a candidate can research about a company and start to break it down into more granularity? I do think that there's going to be some really impressive advances over the next several years in terms of algorithms to match, not again,

the perfection of answer questions and here's your job, but in the same way that Pandora or Spotify can give you some new music that you may not have considered, I think there's a long way to go in helping candidates consider companies and opportunities that might not be on their radar. Because again, most of us are familiar with the same 500 companies in the world. And there are thousands and thousands and thousands of other businesses that might be a really great fit for our skill sets and our desires that we aren't aware of. And I think as an industry, we could get much better about helping people discover. One thing I don't think necessarily is going to happen is some people predict that candidates will exclusively be talking to bots in the future.

that may come to pass for hourly employees or for positions in which volume is more important than individual skill. But again, I think some level of human interaction is going to be core for a very long time because ultimately we humans are more than just the sum of the data about us. I hosted a lunch today with our interns and one of them asked me a question which I couldn't answer, so I'll just ask you instead, which is what you think are going to be the largest changes in the nature of work itself. and that could be as logistical or really any way of interpreting the question, like how will work look different? Let's go far into the future, right?

So there's more of a chance of a rate of change. Let's say 15, 20 years from now. What trends do you see maybe today that you could see continuing? One person asked about, like, remote work, like, if we're going to see more or less of that, are there big changes in the nature of how we do or think about our work that interests you or have you thinking? Absolutely. One of them is all of the beneficial and scary ways.

is that our data could be connected in the future. I'll give one example of each. A beneficial way that data could be connected in the future is right now all of the data collected about you when you're a candidate is completely separate at almost all companies from all of the data collected about you when you're an employee, which means that in some cases there's no accountability if you asked questions or were promised certain things. It also means it's hard for companies to assess how good their hiring process is because they often cut off the measurement at, did we hire this person, Was it fast? Was it cheap? And not, were they successful here? Did they stay a long time? Were they promoted? At the same time, somebody brought up to me yesterday the idea that if a business is using a major software provider for employee performance reviews, shouldn't other businesses that use that same software provider who might hire that employee in the future, be able to get access to their former performance reviews, which I think could be alarming if it weren't done very thoughtfully and very carefully because people's performance can change so dramatically company to company.

again, to some extent, whether that business is a right fit, are they in the right role, are they supported, are they excited and energized by the work and by the colleagues? So that is a trend that I think there's an inevitability to more use of data across talent and performance management, but how that is done, I think will be up to us and the decisions we make. For the distributed work question, I certainly think we will see an increase in flexible work, remote work, distributed teams, it's just becoming easier and easier for people to hire great talent, regardless of where it's located. And many people at various points in their career will prioritize working remotely or working in a flexible way. In fact, the fact that we have such a legacy system of nine to five in an

office is a holdover from the factory floor. And it's not necessarily reflective of the type of work we do. At the same time, I strongly disagree with people who say that all work will be distributed, because humans are very social creatures. And in our experience with the muse, many people who move into a freelance or a gig lifestyle or even remote will ultimately at some point in time look to come back into an office because they miss the day-to-day interaction. Not everyone. I think there's some portion of the population that is probably always going to be most happy as freelancer or remote. But I think for other people, it will be a tool or an option on the menu that they pick up or put down at various points in their career, which again, I think is very exciting and something that we should all celebrate. But I don't think that a majority of Americans are going to lean into that. as their default work option for the foreseeable future. I think I know the answer based on that what you just said, but another way of thinking about this is maybe 15 years from now, if you look at a pie and there's sort of the gig type workers

and there's the full-time employee or full-time equivalent type workers, do you think that there will be a trend away from full-time work and more towards parsing units of work as technology and automation takes more of like the repeatable tasks? And I guess more of what we're doing is creative or original work. I think that's happening. I may be wrong. Do you think that that is a trend that's real, that there will be more like unit parsed out by unit of work versus I hire a person to do something all the time?

I think that there will be more than there is now, but I do not believe that it will be more than about 40% of the workforce. I can understand the appeal, particularly from an employer's perspective. It feels beautifully efficient. Like a market. Exactly. To only be able to commission the work that's needed done at any given moment and to not pay for work that's not needed. Amazon Web Services for people. Yes, exactly. But again, I think it runs into the challenge of the fact that many people are fundamentally not wired that way or looking for that sort of work. And that even those, and we again, we see this in some of the community dynamics on the muse, even those that are accepting work in a more piecemeal fashion, in many cases, they're joining collectives or organized groups of other people like them to build that tribe in that community. And so I obviously, you know, like anybody could be wrong. But based on what I see at the muse right now, I would expect. that something like two-thirds of individuals in 15 years are still primarily attached to one

group, one organization, even if there's a rise from where it is now in this freelance work. You mentioned earlier this notion of creating content to aggregate this original consumer audience, et cetera. And then someone told me the other day, basically every business now has a media arm. Like everyone's got sort of a media strategy of some sort, self-created otherwise. What is the most successful piece of content or content strategy that you've ever employed here at the business. So the most successful for our real and actual goals is a single article called the 31 most common interview questions and how to answer them. And I haven't Googled in the last month or two, but in general, if you Google common interview questions, you will see that

article at the top. We published it several years ago. We refresh it whenever we need to, but it is the gift that keeps on giving. People love it and it's a huge entry point for people into the muse.com. The most effective but ultimately not related to our long-term goal is in 2012, we published a article about hair that was a runaway success. I did well on Pinterest. It did well on Google. Thousands at the time, probably tens of thousands of people were finding and finding the muse through this article about, I think it was eight no-fail hairstyles for a bad day at the office. And so we had to have a conversation internally. And we said, look, this is a way to get traffic. We are trying to build a consumer audience, and this appears to be a way to build a very big one.

But are we serving the mission of our company by publishing articles about hair, even if it's hairstyles for the office? And we ultimately decided that that was not the business we wanted to build, and it wasn't in line. And so we stopped doing that, which I think was absolutely the right decision. But it's funny, we still joke about internally the power of hair online. Apparently, someone said at the time it's the number one most searched term on Google, which I don't even know if that's true, but it gave me a good laugh. As someone who I think you came through Y Combinator, am I right about that? Yep.

And obviously started the business. So have been keenly in the startup scene for a long time. What advice would you give to early stage entrepreneurs, founders, based on your experience thus far? There are a lot of things that I think you have to learn the hard way as an early stage founder. But the more you can surround yourself with people who have been through it before or people who are going through it three months, six months, one year ahead of you, the more mistakes you'll be able to avoid making yourself because you'll see them firsthand or you'll hear about them in detail.

And unfortunately, reading about other startup founders while helpful can't always serve that same function because many founders are still penalized for talking publicly about some of their most painful missteps and mistakes unless they're comfortably in the past by other people in the industry. And so I think it's important to the extent you can to build a small, community for yourself. We did at some point have an official board of advisors, but I don't think it's something that is best done officially. I think it's actually best done informally through attending events, meeting other entrepreneurs, asking them whether there's anyone who's been particularly helpful in their journey, and not discounting the fact that sometimes the person one

year ahead of you can be just as or more helpful than the person eight years ahead of you because they have more recent real-time experience with your problems. The second piece of advice I would give is to be highly skeptical of startup dogma. And this is a challenging piece of advice to give because there are things that are widely shared and recommended and understood within startups and VCs for good reasons. For example, there's just a standard way to do vesting for equity. And I would generally recommend from personal experience that people just follow the way everyone else does it instead of trying to reinvent the wheel. But at the same time, you know, I thought of this because you mentioned the fact that nearly every

business has a media arm. When I started the muse, we went with career content and the consumer experience first because we knew we were building a marketplace and that was the most straightforward way to begin getting liquidity. But we were pilloried for it. People, can I curse? People like shat all over our business because they were like, content is terrible. It's not scalable. You're wasting time. You're not a real entrepreneur. This isn't technology. I mean, people were pretty awful. And it's hilarious, but not without a little bit of dark humor now that all of these businesses have some form of content function. LinkedIn rolled out major career advice content on its platform about a year and a half after I started the muse. And slowly people have come around to the fact that used effectively content as an incredibly powerful tool.

And so I think that, you know, and I struggle sometimes when giving advice to other founders, we might have been able to raise capital more quickly. And certainly I think we would have gotten some yeses instead of some noes if we had had a initial growth strategy that followed more of the generally accepted wisdom about, quote, how you're supposed to do it. But I don't know that we would have ultimately succeeded. And I have found a number of times, especially when it comes to, oh, that business model is crap or nobody does that. It's not a real founder thing to do. That generally accepted wisdom in the startup circles can often be wrong. And that ultimately the best founders rely on themselves and what they, believe to be true. And that's not necessarily an easy approach to take because if you're a somewhat humble person, part of you asks yourself, you know, am I just full of hubris? Why do I think that my approach is better than what all these smart people are telling me? But at the same time, very few of the biggest, most interesting businesses were built by doing things that everyone said was a smart thing to do at the time. And so I think you have to be brave enough to go against the common wisdom when you really think it's the right thing to do. So my closing question for everybody

is for the kindest thing that anyone's ever done for you. Oh, that's a great question. I can't tell you how many people helped me out when I was a early stage founder when I didn't know up from down. I had one woman who's an incredible investor who invited me out to her house on Long Island when I'd had a particularly horrible week. I had an investor come on to me and I was like in a tailspin. This was in 2013.

and she's like, come out. I'll just take care of you and let you have a break from your business. I've had other people that said just the right thing at just the right time or that were willing to get on the phone with me, you know, with only an hour or two notice when I needed advice. And so I don't know that there's a singular item or situation that's rising to the top, but I don't know if there's, I mean, I don't think I could be where I am today if it hadn't been for the help of so many others. and so now do my best to pay it forward. It can be hard because some weeks I'll get 20 inbound requests for coffee. So I can't respond.

You know, something new other than coffee. Yeah, exactly. And it's just, you know, it's just, 20 of anything is, every week is overwhelming. But I do my best to try and find ways constantly to pay it forward because I think, again, you learn a lot of the hardest lessons if you're lucky through other people's mistakes instead of your own. And the more that you can share your own mistakes, I think the more you're paying it forward in the industry. Well, thank you so much for your time. It's a topic that, strangely, I've never talked about jobs. It's a central thing in all of our lives. So I really appreciate the insight and all the thoughts. Well, thank you. It's been an unsexy topic for a long time, but I actually think it's getting a lot more fun. So thanks so much for having me. This was great.

Hey, everyone. Patrick here again. To find more episodes of Investor like the best, go to investorfieldguide.com forward slash podcast. If you're a book lover, you can also sign up for my book club at investorfieldguide.com forward slash book club. After you sign up, you'll receive a full investor curriculum right away, and then three to four suggestions of new books every month. You can also follow me on Twitter at Patrick underscore Oshag, OSHAG. If you enjoy the show, please leave a quick review for us on iTunes, which will help more people discover Invest Like the Best. Thanks so much for listening.