Hooked on Fear of Reference Checks - Issue 16
"The more reflective you are, the more effective you are." - Pete Hall and Alisa Simeral
There’s always been a great debate surrounding the relevance and necessity of reference checks and how to actually approach them. Many people scoff at these, calling them a waste of time, assuming they yield only positive accolades or surface-level information. Or maybe you do them, but you don’t do them-do them. They become nothing more than a check-the-box item. But when done well, reference checks can yield a ton of value. Perhaps your method just needs a reboot.
What’s going on?
As an early founder, the people you hire often come through your network or your board. In these cases, the referral was the reference. But once your team grows beyond these first few people, you need to mature your process to include perspectives from outside your own network, with people who have actually been in the trenches with the person you want to make an offer to. There are multiple paths forward. One is through a formal reference process, and the second is through back-channeling —sometimes, you use a combo of both.
Formal reference. Formal references are those given by a candidate. They are often curated with people who have given their approval to be contacted for the candidate’s process. Go to the next level with these by asking the candidate what they anticipate each person will say about them, and then cross check. See FORC method below.
Back-channeling. These are informal references that take place without someone’s knowledge, many times before the candidate is even aware they are on someone’s short list. Most people are aware of back-channeling, especially in today’s landscape.
Fear of Reference Check (FORC method). The introspective insight. This approach involves asking the candidate to envision what their former manager or coworker would say about them if consulted. It is especially revealing if that person is not on the list of formal references. This reflective inquiry functions as a truth serum, sometimes circumventing the need to converse with the mentioned individual.
Why does it matter?
Formal references can be high leverage, but they often end up fairly “check the box” and transactional. These references have budgeted time to spend with you so you should approach these sessions with purpose — similar to an interview. Skip the surface-level questions and peel back the layers. Former manager? Direct report? Go deep. References rarely get thoughtful questions. Be strategic and curious to get more objective data surrounding a person’s ability to perform.
Tread wisely on back-channeling. You often rely on back-channel to get the “real dirt” or even validate the “real good” from someone you consider a trusted source. Though meant to be objective, back-channeling can be subjective and based more on impressions. When not coupled with formal references and validated data, these impressions can lack context and be more a product of your network and less a testament to the leader’s actual ability to do the work. Also, beware of common pitfalls like breaching confidentiality in a candidate’s passive search and introducing inequities and bias into your interview process (stereotyping and confirmation being two big ones). Even when you intend to build a diverse team, it might help or hurt someone's chances based on factors that have nothing to do with their qualifications. On the flip side, back-channeling can be an effective way to get a directional data point when leveraged the right way. It’s effective when working to answer, “Is this worth further investigation?” But again, it’s a data point.
What do others think?
“For all references, sharing is a two-way street. Use the opportunity to first establish rapport and trust. Share a bit about yourself, your own motivations, your vision for the company, and for the role. Be Socratic, not didactic. As you share these points, avoid planting answers or leading the witness. Rather, use a thoughtful approach by asking questions and offering more information as you go deeper into the conversation. One of my favorite questions to use during interviews and references is “What else?” I’ve found that the second layer hides the gems.” - Karan Mehandru, Managing Director, Madrona
Karan has other helpful suggestions included in the Take Action section below.
What do we think?
We highly encourage leveraging references as a strategic advantage in your vetting and hiring process — every single time. Not only can they provide direct insight into performance and specific outcomes, but they can more deeply validate whether someone can truly thrive at your startup. However, we caution you to avoid using reference checks as the 12th man on the interview loop. If you lack confidence in your evaluation of a candidate, no reference check will make up for your weak interview process. Reference checks (including back-channels) should be reserved for the finalist candidate and used to learn how to help the candidate succeed.
What do YOU think?
Take Action
Set expectations early — Let candidates know that references are a valuable part of your process. If/when an offer is reached, you’ll want to connect with the candidate’s professional network and those who can speak to their work. References should expect a 30-minute conversation. Request 2 former managers, 2 cross-functional peers, a direct report (if people manager role).
Don’t dive straight into questions with the reference — Give context surrounding company stage and size, the problem this role will solve, unique challenges facing your startup, etc., so the reference can provide feedback that is valuable.
Ask the unanticipated – “If you could point to one reason this candidate wouldn’t be successful given your past experiences, what would it be?” This will more likely lead to information that is useful. - Karan
The unknown unknowns – “What have I not asked that I should?” – this is a powerful question that compels the other person to tap into their own moral compass and share things they would rather have you know than for them to walk away with a burden of relevant facts that they didn’t share with you. When asking this question, be comfortable with a pause to give them time to think – they are not just thinking about “what” they should share, but also “whether” they feel comfortable sharing it. - Karan
Approach reference checking as the first step of onboarding — You are gathering information that will help set up your future employee for success.
Match questions with audience — Asking a peer about leadership capabilities is subjective. If you want to truly understand someone’s leadership capabilities, ask a direct report who saw it firsthand and direct managers who were tasked with measuring their performance. Request cross-functional peers who were reliant on this person’s work to avoid a lot of “I don’t know” responses.
Be specific — Don’t get complacent with sweeping statements of grandeur. Address achievements as layers: “Why was this important?” “What was the approach?” “Who else was involved?” “What was the real impact on the business?” Don’t ask about weaknesses. Flip the script. Instead, ask: “What trends did you see in their performance gaps and growth over the last 1-2 years?”
Validate interview session data — You’ve undoubtedly uncovered examples of past performance during your conversations. Now go validate these outcomes. If a Sales leader said they were directly responsible for increasing ARR by X% YOY, use this call to validate this but also to learn how, with whom, and the challenges they faced along the way. Again, direct this call to the right audience.
The hiring leader should do the reference check — Even if you have a recruiter, resist the urge to hand this off. When talking to a former manager, you can gain valuable insight into key motivators and how the individual responds to leadership styles, what worked well, what didn’t, why, etc.
Don’t rely on search firms alone — Search firms will often do a lot of heavy lifting to seek out references and perspectives on talent. This is a great start but don’t delegate the manager and key peer references. Do this personally. Take the lead when it comes to final checks.
If a concern surfaces, work to triangulate the why during the call — If you find you are still uncomfortable, address the topic with the candidate. Be sure to keep the confidence of the references. You can frame concerns as feedback coming from the collective interview process.
References are future candidates — Don’t treat the conversation as a “one and done.” Remember that if the person is high quality, and you establish trust, this becomes the start of yet another relationship that could be mutually beneficial days, months, and years down the road. Treat it as such. - Karan (Another reason not to hand everything off to a search firm.)
Close the loop — Whether you hire the candidate or not, always close the loop with people you spoke with. Thank them for their time, explain the reasons why you made the decision you did, and reinforce how helpful their feedback was. This is another opportunity to express an openness to begin nurturing this new relationship. - Karan
Tools, Event, Insights
Aspiring for Intelligence —> Dawn of the Agents
Investment News —> Bobsled, Lexion