Use References the Right Way

I dodged the bullet. Just months before writing this book, I identified a candidate for a senior vacancy at a private equity-funded company in the business services category. The company does about $100 million in annual revenue, and this was a vital role. My client was the CEO, who retained me to help him find a new head of sales. We did a ton of research and evaluated nearly 200 candidates.

One of the candidates lives in Chicago, as I do. He did exceptionally well in the interviews and was a great match in terms of competencies. His interest level in the role was high, and he viewed it as a step forward in his career. I had a high level of confidence that I would present him to my client as a semi-finalist, and they’d have a love connection.

Since we live in the same city, I figured we must have some people in common in our networks. I got to work using LinkedIn and, sure enough, found dozens of mutual connections. In particular, two were people I know very well, and who had worked closely with this candidate for years. Early on a Thursday evening, I sent them each a text asking if I could chat with them the following day for a few minutes about a candidate I was considering. Both of them said they’d be happy to, and coincidentally asked, “By the way, who’s the candidate?” I texted his name.

Within moments, they responded with virtually identical messages.

One said, “Run, don’t walk, in the other direction.” The other said, “I wouldn’t touch him with a ten-foot pole.”

I nearly spit out my Cabernet. I asked them, “What am I missing? What’s the issue?” Both told me that the candidate had just been terminated for cause, due to major ethics issues. Of course, he neglected to mention this during our interviews. It turned out that he had lied, saying he wanted to find something different, that he was bored.

While not always the case, people who resign from a position before lining up their next role wave a bright yellow flag. In general, Rockstar candidates don’t give up their current post until they find something they’d like to do next. In this case, both of my connections validated his bald-faced lie. Therein lies the power of backdoor references: to find out the cold hard facts about a candidate, and to validate what we’ve been told thus far.

Reference checking is a step that many executives skip, and they’re playing with fire. It’s time-consuming, a hassle to schedule, and—I’m convinced—conflicts with the egotistical pride we hold in our decision-making ability and judgment. Unfortunately, Test Drives are imperfect and interviews are even worse.

So, we simply must use references. But if you’re going to do it, you might as well do it the right way to get the most out of them. I’ve learned the hard way to “trust but verify” every single candidate before making an offer. Remember the goal of this entire recruiting process—it’s to de-risk the hire. Most of the time, candidates tell you their version of the truth. Whether they are purposefully deceitful or unintentionally naïve, you need to get the full story in order to make the best possible hiring decision. And sometimes, it’s as blatant a lie as the one above. I saved myself a world of hurt with two quick texts.

Naturally, candidates present things in the best possible light. Sometimes, their perspective is different from their hiring manager’s, though, which is why you must call the previous supervisor to hear both sides of the story. And to validate the facts you’ve been told through the recruiting process.

Reference checks, by the way, are only useful if they’re done prior to making your hiring decision. Don’t use them to check a box after the fact. If you’re going to invest the time anyway, do so prior to deciding so that you can use the information you glean as a factor in your decision making. If you’ve done your job well during sourcing, interviewing, and Test Driving, references won’t change your mind often—perhaps just 5 percent of the time. There shouldn’t be many surprises at this late stage in the game. But on the occasion they do, you’ll save yourself another bad hire and remind yourself of their value. I know it’s painful to invest all that time—months often—with a candidate who seems ideally suited for the role and for your culture. And then you check references, only to find it was all an illusion. You invested that time for nothing, and you’re resentful. You’ll be tempted to look the other way and ignore what you heard from the references. You’ll rationalize their commentary. Don’t do it. When that bad hire starts to disappoint you and you’re forced to part ways with them, you’ll regret not heeding the references.

Equally important to verifying information, references can give you information that will help you lead and manage the person to get the most out of them. Even Rockstars need to be led, each one coached in their own unique way. I’ve learned to view reference checks as a shortcut that will save me time later. It’s become a valuable time investment, not a hassle. Even if the references do nothing but confirm what I found in the interviews, they provide powerful ways for me to help my newly hired Rockstars excel.

All this said, reference checks are one input into the final decision. Do not allow one bad reference to dissuade you. Not everyone fits into every environment or clicks with their manager perfectly. Look for patterns. If there was one manager they didn’t get along with, one company culture they didn’t fit with, that might be okay. One instance doesn’t make a trend. That’s why it’s important to check several references. I’ll check as many as time allows, but always at least four.

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As a bonus—or better yet, a reward for your persistence—reference checking is a great way to identify additional outstanding candidates. Rockstars know Rockstars, right? Often, the reference may be someone you want to add to your team—now, or in the future. Don’t be shy: Ask about their career aspirations and current situation.

If you build a good rapport during your conversation, references will often suggest, “You also ought to talk to this guy. He would be great in that role, too.”

In general, Rockstars love the fact that you’re reference checking, while B- and C-Players don’t. Rockstars are able to produce their references quickly and are eager for you to speak with them. I’ve had candidates, after our interview, unprompted, email me a list of twenty references, every person they’ve ever worked with. That speaks volumes about the confidence this person has in what these people are going to say. I love referenceability, and value it as much as what the actual references say.

Similarly, if someone makes excuses for not providing references, it raises a red flag. You’ll hear excuses like, “We lost touch,” or “I don’t know where he is,” or “She’s not allowed to give references.” The candidate I mentioned earlier had told me his company had a policy not to give references. Sometimes, that’s true because companies fear legal recourse if the person in question doesn’t get a job after a negative reference, but you’ll find that Rockstars’ managers will often talk to you anyway. They’re almost always happy to give a great reference because, legally, there’s nothing for them to fear.

If a candidate gives excuses instead of phone numbers of his former supervisors, move on. You want the least risky hire possible. If a candidate is not referenceable, you’re taking on too much risk. I may be bypassing a Rockstar, but I’m more worried about allowing a B-Player onto my team. This is why it’s crucial to always have a backup candidate. It’s painful to spend months on this process and end up with one candidate who turns out to be non referenceable. Sadly, most executives look the other way and still proceed with the hire, and that’s trouble.

Throughout the interview process, keep track of every name the candidate drops. Write them down—their managers, peers, staff, customers, vendors, investors, partners, advertising agencies. When it’s time to check references, ask to speak to so-and-so who the candidate mentioned he’d worked with on a project. It’s fair game. Look to see who’s missing from the reference list that the candidate mentioned throughout the interviews. It’s telling.

If they’ve held ten or more roles over the course of their career but can only produce two or three managers, that tells you something. Study the ratio of managers that candidates provide and the ones they can’t produce as references, and use this information to inform your decision making.

The reference check can be an invaluable tiebreaker between your final two candidates. Go into it with the mindset that you’ll be willing to change your mind if you hear something troubling about one of your candidates. If you can’t do that, you’re just going through the motions and wasting your time.

Contact references before the offer is made. That sounds obvious, but half the time, my clients either skip it or do it after they’ve already extended the offer.

Want to delegate reference checking to someone else, such as your human resources team? Sorry. In my view, the hiring manager must do the reference checks, particularly since they’ll obtain invaluable insights into how best to lead the new hire. And don’t delegate reference checks to an outside recruiter; that is a conflict of interest. The recruiter has invested lots of time by this point and wants to get the ball across the finish line. The last thing they want to do is to uncover a problem at this point in the process. Also, they’ll never care quite as much as you do. That said, I’ll do the reference checks for my clients if they’re too busy. But I have a twelve-month placement guarantee, so I need to get the hire right just as much as they do. Many search firms don’t have a placement guarantee—or a brief one—so they’ll never need to eat their own cooking.

So, who to speak with?