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Peer Effect
Best way to scale? Your peers have the answers.
This is the podcast for scaleup founders looking for insightful, actionable wisdom from some of the best operators around. Each week we’ll explore one secret that other founders and experts are using right now and how to implement it.
It’s practical wisdom to build the company AND life you want. Hosted by renowned founder coach and advisor James Johnson.
You’ve survived to £1m, now let’s scale to £10m+.
Peer Effect
Social Fit vs. Culture Fit: Diversity as a Competitive Advantage, with Jo Major
Ever thought about how prioritising diversity and inclusion could unlock new growth for your business?
What does "culture fit" really mean and do you make your company culture measurable?
In this episode, Jo Major, founder of Diversity in Recruitment dives into redefining traditional recruitment filters and offers practical advice on creating an evidence-based approach to hiring while keeping diversity in mind.
Together, we uncover:
- The critical importance of embedding DE&I early in your company's hiring practices to avoid unconscious biases and the pitfalls of a homogenised workforce.
- Strategies for slowing down the hiring process to improve quality and diversity, challenging the common rush of filling positions quickly to reduce costs.
- Practical tips for founders on assessing and reshaping hiring practices to truly reflect and promote a diverse workplace.
Don't miss this episode for a chance to transform how you think about building your team! For more insights, follow Jo Major on LinkedIn.
More from James:
Connect with James on LinkedIn or at peer-effect.com
Do we start looking at diversity and inclusion too late in our business growth? Could looking at it earlier unlock innovation and greater scalability? As founders, we're constantly looking for an edge in competitive markets, but very few see ED&I as that leverage point. And that can seem logical Early on. The focus can be on cost, can be on speed, and culture can be a bit of an afterthought. However, joining us today is Jo Major. She is the founder of Diversity in Recruitment and has dedicated her career to transforming how companies integrate diversity into their hiring practices. With her incredible insights, she helps businesses to not just meet their ED&I objectives but turn them into drivers of success. Executives, but turn them into drivers of success. If you're tuning in for the first time, I'm James Johnson and I coach Series A plus founders to take back control so they can take their business further and live a great life. If there is sort of one thing that you'd share with later stage founders, what would it be? What's your one thing you'd share?
Speaker 2:I think it would be around thinking about diversity and representation in the early stages. It's really really easy for founders to hire quickly during that growth spurt, needing the, you know, needing the bums on the seats, needing the vacancies filling quickly, and it's very much a focus on who do I have instant access to, who can I hire quickly and cheaply, who's already within my network, is a really, really popular one, who have I worked with before, who can recommend other people. And then, before the founder realizes that you know they're at that kind of 50 to 100 heads and they've packed their organisation full of very similar people, whether that's from an identity perspective or a background or industry perspective, and they've also created with those very, very similar people quite a close culture. Then it becomes harder to start unpicking that.
Speaker 1:That's really interesting because it sounds like three things are driving that lack of diversity that you said, like access, speed and cost, yes, which feel like quite efficient things to focus on.
Speaker 2:Yeah, yeah, absolutely. And it really does make sense when, know, when you, when you're building a business and you're going through that growth period, you know the most expensive thing, I guess, is hiring people in. So you, you know, especially with a lot of the types of businesses that that, that that I support through my work, these are organizations who are building out their client base, building out their fees. Money is really, really tight and that can sometimes encourage them to cut costs on salaries and it's not unusual for some of the organisations I work with to have a very, very young workforce because they've wanted to kind of really keep those, those kind of salaries down.
Speaker 2:And also that thing around, you know, thing around peace around speed. You know we've got some investment, we've got to just get people in straight away in order to kind of meet the requirements of investors and to grow and to meet the targets that we've promised to deliver on. So how can we hire quickly? And that's where we sometimes see that there isn't, you know, there's missing elements of process where we've not really drilled down on skills and experience and competency. This is where we've hired fast and we've, you know, when we get to that point where we're kind of like crikey? Have we even brought in the right people with the right capabilities, or did we just go on our gut instinct or a recommendation from you, know, know, from one of our existing colleagues?
Speaker 1:It really sounds like the old sort of speed cost, quality triangle of kind of like you can have two of the three, but not all three, and in the early stages, that temptation to focus on speed and cost which kind of ignores the quality aspect.
Speaker 2:This is the difficult thing, especially the work that I do around hiring for diversity and difference. I will be really really upfront and transparent with my prospect clients and say what is the priority here? Is it time to hire and cost, or is it diversity and representation? There's got to be a flex on that. We've got to prioritise representation and diversity and process in how we hire. And that's one of the biggest challenges for many, many businesses is are they up for that? Are they up for that challenge?
Speaker 1:I suppose one's a short-term win and one's a long-term win. One's quite measurable. You can measure time to hire. You can measure cost to hire. It's harder to measure quality, until much later.
Speaker 2:Yeah, absolutely. I mean, sometimes there's this misconception that, you know, in order to get diversity, somehow we have to lower the bar and compromise who we bring into an organisation, which is, you know, it just is an untruth. Diversity in recruitment and inclusive recruitment, it's not about lowering the bar, it's about widening the gate and making sure that you've got access to more people.
Speaker 2:That is the piece that takes the time um you know a proper interview process where we are diving deep into competency and cultural fit and value alignment, that that that again takes time, that again takes skill, and it might be that we've not even ever thought as founders hey, have we even equipped or tested our hiring managers capacity and capability to to interview properly and assess for talent and? And sometimes we just assume that when we bring in people into our organisation, these are natural things that they can do? It's have conversations with candidates, you know, assess skills and competency, but this is all. This is a skill to interview, and many of us have been interviewed by people who don't know how to interview properly. You know, are we actually creating a learning environment where we're, you know, adding that rigor to our recruitment process but also upskilling people who are maybe in their first hiring manager role or have never had access to professional development when it comes to interviewing? Does that make sense?
Speaker 1:100% of me. The irony is, in most organizations, the people that do the hiring are the people who are your most inexperienced hirers, because just by the nature of the pyramid of a company is the people are the first line manager to the hiring, they're your least experienced. So that's even if you assume that your senior manager and yourself is a good hirer, which I think is a very dangerous assumption as well. I think in my experience most people, even at senior level, even at founder level, can still be quite gut led yes, oh, I knew in the first five minutes style hires yeah, yeah, yeah, we've all been there.
Speaker 2:It's very, very natural for us to to kind of have that gut instinct, that sixth sense about other human beings, right, so it's, it's inbuilt in the hard drives of our brain to, you know, to make really quick assumptions about other people, very, very quickly.
Speaker 2:Right, bias is a human condition and that full transparency. You know, james, I wasn't aware of how some of this stuff was influencing the decision making that I was making whilst I was a, whilst I was a recruiter, until I actually started to really unpick the power of bias and preference. I couldn't see my hiring habits, that whether or not somebody was right for either my team or one of my clients, no evidence, okay whatsoever to be able to make a objective decision, all purely subjective. And you know, when I, when I speak to people about talk, to talk to me about what happened during the recruitment process of the peak of that person that hasn't worked out and it's all about how they felt about them. You know, during the interview process, baked in subjective decision making, and you know, sometimes that's really difficult. It's quite challenging for hiring managers to hold a mirror up to themselves and be like, you know what my gut instinct.
Speaker 2:It's really interesting how I've trained it, because it might not be complementary to an inclusive hiring process and it might be actually pushing back my opportunity to hire in people who are different to me.
Speaker 1:If we can accept that there's a very strong pull in this direction to like quick hiring, cost-focused hiring, which had quite severe consequences for diversity and quality of hiring, what are the some of the things that founders can be doing to to address this?
Speaker 2:it really, really does start with that awareness building and I think you know for founders to almost you know, if bringing in talent is an actual priority for them, to understand why diversity doesn't happen and to really get their their you know their heads around how powerful human bias and preferences are and like, what are the difference between, you know, our unconscious bias and our very, very kind of open preferences around bringing people on board and for us to actually really map those out, like workshop those out and really figure out so the preferences that we have when it comes to bringing people into our business? Which category do they fit into? Is that unconscious right? Is that stuff happening without us even being aware of it? Is that a very open hiring bias that we've all developed and we know it's going on? And let's get to the root cause of it.
Speaker 2:Is that a preference? Why is it a preference? Is it something that we just created? This kind of almost cookie cutter shape of the perfect employee which I find, james, happens a lot? The type we have, a type you know, have you actually developed a type and thinking about, you know, workshopping that out and really thinking about, well, what is the impact of that type? How has that impacted on our hiring decisions and who's ultimately within our business?
Speaker 2:And I guess that ties in really nicely with not making any assumptions about a lack of diversity and really, if you're a founder and your business is that you know 50 heads, 100 heads.
Speaker 2:That's the time that you really want to be doing some diagnostics and if you've never collected diversity and demographic data on your employees, running something like a diversity and inclusion health checker will really, really benefit you because it will help you to understand who's who's in the business, what is their experience of your business from a culture perspective, environment perspective, etc.
Speaker 2:And also who's missing. You know who's currently not showing up and that will give you, hopefully, like an indication of you know where some of those hiring biases and preferences and where you've actually been going out to look for talent and attract talent of influence, who you've ended up with. So that's almost like the groundwork and in my experience, that is the bit that's usually missing. I usually get asked to come in and help organisations develop. You know all bells and whistles like inclusive hiring strategy and what I always need to do is take a step back for us to really understand who's in the business and why they're in the business and how do we get here in the first place and really unpick those biases and preferences that a lot of us have developed, really unpick that sometimes an over focus on culture fit, really get the hiring managers and founders to understand the difference between true culture fit and social fit and figure out whether or not those lines have been blurred a little bit there's almost like sort of coaching to do for the whole organization, that kind of discovery.
Speaker 1:So like what, what are your sort of unwritten rules? What's going on here before you can move into? Okay, great, yeah, here's what you do now. It's like you need to invest the time to a bit of deep work first.
Speaker 2:Yeah, yeah, yeah, and it's like with, it's like with anything, isn't it? You know you, you never make that investment in a change management program without understanding the problem that you were trying to fix in the first place, or what?
Speaker 2:you were trying to trying to do better, um, and I just, you know, I think that's an integral part of of understanding it, especially with a lot of hiring managers who hire a lot of the time yes, on skills and experience, but the whole piece around culture fit dominates the conversation, especially with smaller, evolving businesses. They've developed a very, very strong culture and it's also it's their North Star, it's the thing that guides them Right. It's that piece that when you get feedback about a candidate and they don't get that they were brilliant, amazing skills and experience, but they weren't the right fit. They were brilliant, amazing skills and experience, but they weren't the right fit. You're like, great, talk me through what that means. Okay, talk me through how you made that decision. Well, I don't know, they're just not the right fit. They just weren't like us. We just had a feeling we just couldn't see them working it. And again, it's all the subjective feelings, all these gut instincts, instead of like, really, really understanding.
Speaker 2:So, if culture fit is so important, how do we articulate it? Once we're able to articulate it, then we can assess against it. And then, understanding, how do we assess against it? What does that look like? Right, so we've got something really, really tangible and also credible for candidates to feedback with Right. So understanding that the culture fit piece is about the values been really really tangible and and also credible for candidates to feedback with right.
Speaker 2:So understanding that the culture fit piece is about the values. It's about the leadership style, which is critical, isn't it? To get right, you know, between your employees, your managers and your leaders in a small business. Your management style, you know, and that might be almost like little micro cultures in different parts of the business, because everybody's got their own management style. And then, finally, this piece around team synergy how do people within your organisation move and navigate amongst each other? What, like you've said before, you know, what are the behaviours, what are the expectations, and once you can, you've got that almost like written down down. That's when you can start to write.
Speaker 2:Okay, so we've got something really tangible here that we can create a suite of questions around. You know, to, to, to, to, to assess true culture fit, which I think is is absolutely critical for any organization. You know, I think it's almost become like this dirty word oh no, you can't, can't hire for culture fit, you've got to hire for culture ad and you're like what does that even mean, but I think it's like really understanding that culture fit is not how much you like somebody, right. It's not whether or not you like the same stuff at the weekend, or whether you could go on a long old flight with someone, or whether or not you could have a beer with them or whatever. It's about values. It's about leadership, management and team dynamics. In my opinion. You know, if you get that right, at least you've got something.
Speaker 1:You have a true North Star, then right not start then right, and I think what's really nice about that is you're saying it's been very being able to articulate it in a way that you can then define questions against and then objectively test against. It is quite hard to. It's harder to object to culture fit, isn't it than? Or is it? Is it harder to objectively test against culture fit than maybe skills or competencies?
Speaker 2:I think when you know what it is, then not necessarily difficult to develop a suite of questions and a scoring matrix against it, just like you would do. A key competency you know that your team dynamics, for example. You're a business where each different team are everybody's accountable for each other's workload. You know working independently is just not a thing. It's very much like a project management style. There's lots of team huddles, everybody's on slack all the time, everyone's accountable to one another. It might even be that things like KPIs and commission or whatever is everybody's accountable for the pots.
Speaker 2:If you've not really established the way that your team work with each other and you bring in somebody, for example, like me, right, I am a real fiercely independent worker, always have been. I like to have my own desk, my own responsibilities, my own clients, my own targets. If you ask me to start like having six other people for being responsible for whether or not I meet my targets, that's where I'd start to unravel. I'd far rather you ask me questions at interview to figure out where I work best and then say to me Joe, do you know what? You've got the right skills and experience here, but the weight, what you look for in a team is not what we can give you. You would not be happy here, you would not thrive here, you would not be successful. You'd find is incredibly frustrating. So actually, what it's giving me is something for candidates really a real evidence-based feedback for candidates and they'll go. I love that. That's the first time anyone's ever acknowledged that that's proper feedback.
Speaker 1:I can see how that now helps me ask the right questions when I go to interview and I relate this concept of like social fit versus culture fit, because I definitely agree there's a, there's a. My, my big thing when I was early in my career was was sport, which I expect is a very common one for people.
Speaker 2:But like.
Speaker 1:I cause I did a lot of sport. Anyone that came in and did endurance events I was like right, yes, you have all these positive characteristics. And it's like this is make. There is no correlation between. Just cause we've connected on, we both like triathlons does not mean that we're going to work well together, or but you feel like you found a affinity.
Speaker 2:They're a social fit yeah, yeah, and affinity is the most powerful form of bias in hiring and recruitment process. You know, we, we, we are instantly drawn towards people that we've got things in common with right. That likability factor kicks in immediately as soon as we, as soon as we hear something. You know that that makes reminders of us or reminders of stuff that we like or the things that we've that we've we've got in common and and I see this happen quite quite a lot, especially in small businesses there's always this like common interest. You know, I've worked with organisations that have all been really into some quite unique things.
Speaker 2:I once worked with an organisation who originally, the thing that they had in common, the social piece, was skiing. It was so, so strong. Another business I worked with it was about, like you know, they used to hire people based on their sporting achievements at university and that was goodness knows how I managed to get into that business. They were just breaking that mould at that point. But again, it's like a hunch and it's like human instinct to. You know, believe that we share the same traits in people, with people, just because we've got stuff in common and, you know, a shared interest in sports, whatever sports that might be is just you know, that's about the social fit.
Speaker 2:You know it doesn't guarantee anything else, does it?
Speaker 1:But I think you can persuade yourself that it's a logical thing to do. Let's take the sports one, because I think that's quite a common one in terms of say, yeah, we will only hire people who are who've achieved something in sport at university that feels like you are going. People who are, maybe, if you want to pick that, you go okay, well, maybe people do sport, they are committed, they're disciplined, they're you're making all these assumptions whereas they may just be really good and actually have a lot of talent, but are actually really lazy and they should have been a lot better or they could have been doing something else. And so actually you tell yourself, yeah, you're. You're describing all these positive characteristics, whereas actually, tested, you go okay, well, they're great sport. Have I asked some good questions around discipline, commitment, responding to adversity, do they like working with people or were they really selfish, strike or whatever the questions are? I can see how, actually, if you can really define what you're looking for in that slightly broad, we want professional sports people. Your culture may.
Speaker 2:Actually, we want team players who are disciplined, and you could develop quite a nice suite of questions against that yeah, perfectly, and you take that, take that sports element, you know out of it and you know it's a things like that can be a really, really strong like hiring hiring habit and I've seen people get into it. And if you look at it, that that particular organization, I was kind of like, let let's really unpick this. Let's think about that human social preference that you've got that's developed into a hiring preference. Who may not have access to skiing?
Speaker 2:And if we think about it in those you know terms, you know I mean skiing traditionally for my generation was something that people with access to significant financial resources could do. They usually were from higher socioeconomic families, higher classes, access to better education. So you know, if you're kind of like diversity is really important to us, so you know, if you're kind of like diversity is really important to us, but if you enjoy skiing, we love you. It's just like well, you could create, could create multiple barriers 100%, even let's say maybe the sports one.
Speaker 1:Yeah, let's say you came from a poor social background. Maybe you wouldn't have the funds to spend all your free time playing sport, because actually you need to do a job and work your way through university like absolutely.
Speaker 2:I think it applies.
Speaker 2:It's not a lot of hidden barriers just peeling back those layers and, like you know, it's not actually the sport. It's like what we believe makes a great sports person. But actually those three things that are really important to us we can call, we, we can, we can look at. There's lots of other things and lots of other evidence that we can gather to to to demonstrate that particular mindset or skill or personality trait. Right, we're not here to tear strips of ourselves. Right, we're not here to beat ourselves up for what is a human condition and the things that we've always done. We're here to really make sure that we upskill ourselves so we can build the most high performing team and we can grow and evolve in a way that makes us fit and strong for the future. So I'm not a massive fan of things like the harvard implicit bias test, because it just tells you exactly what you could expect for whatever you've been exposed to as a young person. Right, we just need to have like rather than like.
Speaker 2:Making people feel bad for the stuff that's hardwired in their brain by the time they're six years old, for me is not a productive way of doing things. Let's just talk about what we like and why we like it. And is that creating a barrier and as soon as we start to kind of go right. So degree educated, that's something that's really important to us. Why, okay, let's workshop that that out.
Speaker 2:I know I keep saying that all the time, but why is it important? What would happen if it wasn't? Okay, who has access to a degree? Who doesn't have access to a degree? Are we creating barriers for brilliant people to get into our business? And let's take it a step further. Because we ask the people to have that classification from particular degrees. Let's look at it from a data perspective and sometimes when you do, when you have those types of conversations, you're like, oh crikey, 6% of the population here that have got this and we want to become more representative and diverse and focus more on skills based hiring. So really, can we challenge ourselves to just kind of just pilot taking the degree out?
Speaker 1:I'm sorry. I think it's a lot of these flags that we rely on actually are there to make our lives easier rather than to make our outcomes better. Yeah, it's kind of it's a bit scary to move a step away from it, like because how do we filter them? Like we're not filtering on degree, if we're not filtering on achievement, if we're not filtering on god, does that mean we can't filter on cv anymore, like this is? This has been fascinating, I think. I think my probably my biggest takeaway is that can you make your culture as tangible as possible so that you can ask questions against it and, just true, truly measure it like a competency?
Speaker 1:absolutely and and stay away from this idea. But I hadn't had the social fit, like the danger of social fit but making your culture fit, really tangible, evidence-based, and so you can't have necessary feedback and challenging feedback to account and go there wasn't cultural fit for these reasons, not just a oh, oh, didn't fit.
Speaker 2:Yeah, you just didn't fit because you don't like rugby or skiing, or skiing.
Speaker 1:In this episode, with Joe Major, we dived into why adopting diverse and inclusion strategies early is crucial for scaling. Together, we discussed some of the common pitfalls of hiring fast and how revamping your recruitment strategy with D&I isn't just good practice, it's a strategic advantage. As always, thanks for joining us. I'll be back with a new episode every Wednesday, so don't forget to add Peer Effect to your favourites or watchlist to avoid missing out. Until then, keep making it happen.
