Optimize Your Human Capital As You Start To Scale

There are three basic decisions an executive team must make:

1. Do we have the Right People?
2. Are we doing the Right Things?
3. Are we doing those Things Right?

When Scott Nash needed a CFO for MOM’s Organic Market, simply asking a recruiter wasn’t going to cut it. Nash founded MOM’s in 1987, at age 22, as a home delivery and mail order company based in his mother’s garage in Maryland with the purpose of protecting and restoring the environment. Instead of advertising on job boards, Nash placed an ad for a CFO on Treehugger.com, asking questions to attract candidates who aligned with MOM’s values. The ad attracted 40 candidates in a week, and from that pool, Nash hired Kelly Moler, who had the requisite talent and shared the team’s green values. Over the next 13 years, she helped the company grow to $230 million in revenue, despite competition from large players like Whole Foods. Hiring the right people allowed MOM’s to rapidly expand, becoming a chain of 27 stores with 1,600+ employees.

Nash believes in using Topgrading interviews to find top candidates, where candidates’ entire work histories are reviewed and reference checks are thorough. MOM’s has customized the interview to its values. For example, Nash believes that people who had to earn money for themselves as teenagers tend to be well-grounded, so the questions might include: “What did you spend money on as a teenager? How did you get that money?” If companies aren’t competitive, it becomes challenging for them to attract and keep the best talent. When MOM’s finds great people, at all levels, it pays them more than the industry average.

This isn’t a Silicon Valley company—it’s in the competitive supermarket industry. Obviously, a key to the company’s success is having the Right People.

If you want to start to scale successfully, you need the Right People Doing The Right Things Right. And that means relying on a simple formula I’ve included in my book Start to Scale and that MOM’s has embraced: fewer people, paid more, and given lots of training and development.

Worried about spending all that money on training people so they can go elsewhere? The research is definitive: Training and development increases loyalty. Besides, what’s the alternative? Do you really want a bunch of untrained people scaling your business?

For the foreseeable future, it will be more important than ever to have the Right People Doing The Right Things Right. Employers will have to figure out how to make the most of their teams, with labor force growth slowing from a monthly average gain of 76,000 workers in 2024, down from the pre-pandemic average of 136,000, according to Indeed’s 2025 US Jobs and Hiring Trends Report. An aging population and declining immigration will add to the impact. While AI will help companies get more done, every company will still need to rely on a core team of great people to start to scale successfully.

Evaluate Your Team’s Potential

The first question you must ask is, “Do I have the Right People?” A quick way to discern the answer is to ask yourself if you would enthusiastically rehire each person on your team if given the opportunity.

The second question to ask, especially regarding your executive team and other key employees, is whether you think they have the potential to be the best in their position three to five years from now. When you have A-players in every position, it makes all the difference in the world.

Hire Smarter

Hiring is a numbers game. The firms with the best people tend to attract a high volume of applicants—and the general quality of the applicant pool is so high that throwing a dart at the list of potential employees will likely land you a great hire. This is why firms with a stellar reputation in their industry (or even in a particular town if you hire locally) are able to continue to hire stellar people.

So, ask yourself the question: Did we attract a lot of high-quality people to apply for the last position we hired, especially if it was an executive position?

You or your headhunter should source an initial pool of 50 high-quality candidates. If you’re relying on your network, ask yourself, “Are they connected to a large, high-quality talent pool?” Remember, A-players tend to surround themselves with A-players, so go only to your A-player network.

A useful tool for recruiting high-quality applicants to fill executive positions, is to make a Top 10 list. Take out a piece of paper and write down at least 10 people (20 is best) you could e-mail tomorrow—people who have contact with the kind of A-player talent pool you want to hire. Then do the following:

1. Email them a two-paragraph summary describing your firm, the position, and the type of person you’re seeking.
2. Call them first to let them know you’re sending the summary by e-mail.
3. Follow up a week later to see if they know anyone or if they at least know someone who might know someone.

This, by the way, is essentially what headhunters do, so if you’re unwilling to do this, hire a headhunter.

Create Better Job Descriptions

You need to market your firm to potential employees with the same vigor you use to attract potential customers. If using a headhunter, work with them to create a persuasive description of the company and position that highlights your firm’s culture and opportunities.

A client of mine increased the number of job applicants threefold by replacing its old job ad:

Exceptional opportunity! Rapidly growing promotional marketing agency with Fortune 500 clients seeking ACCOUNT EXECUTIVE (standard qualifications listed)

…with this more engaging version:

WHEN WAS THE LAST TIME YOU HAD FUN AT WORK? It’s a great time to join our promotional marketing agency team. Get all the benefits of working with Fortune 500 clients in a small-agency environment. Not only do we take pride in what we do, we have FUN. Your creativity & energy are what we need. PROMOTIONS MANAGER description (delineating what you’ll do) and ACCOUNT EXECUTIVE description. Enjoy coming to work. Send resume to ________________.

Last, for frontline and first-line leadership talent, your best source is referrals from your existing A-player employees. The key? Offer significant referral bonuses—$5,000 vs. $500. Pay 10% of the bonus when the referral is hired; 40% at their sixth month anniversary; and the last 50% when it’s been a year.

Embrace the Structured Interview

Interviewing is the most perilous part of the process because there is actually a slight negative correlation between whom you likely hire based on an interview and whether they would be a great fit for your firm.

The only effective interview process is a structured interview. Brad and Geoff Smart are the experts in this field. I highly recommend their books, Foolproof Hiring and Who: The A Method for Hiring.

Testing is considerably more accurate and objective than the standard feel-good interview and should always supplement the interview process. Many of the best-run firms have their applicants, especially potential executives or frontline leaders, complete several hours of formal testing. Least important (though the one everyone seems to use) is the standard personality test. Use professionals to help with this process—no time for amateur hour when utilizing testing.

All of this takes time. But having the Right People Doing the Right Things Right is the single most important investment you can make as you start to scale.