Smarter Hiring, the DDI Way

"What is a date, really, but a job interview that lasts all night? The only difference ... is that in not too many job interviews is there a chance you'll end up naked at the end of it."

That's Jerry Seinfeld, revealing a startling level of truth below the surface of his date-as-interview shtick: The courtship process is usually far more rigorous than the way we go about hiring. Watch any of the nearly 10 reality dating shows currently airing, and -- hot tubs included -- you'll see couples actually getting to know each other. Employers can learn a lot from them.

It's yet another dirty little secret of American business. Despite the corporate chorus of "People are our most important asset," we aren't attacking the challenge of hiring as if our corporate lives depended on it. Jim Collins, who intensively researches successful companies and wrote the bestseller Good to Great, uses the metaphor of "Who's on the bus?" He says that "most companies don't pay enough attention to getting the right people on the bus. Great companies practice a principle of getting the right people on the bus, the wrong people off, and then pointing the bus in the right direction." Provocatively, he adds that an "emphasis on getting the right people on the bus is even more important than strategy."

Other experts express similar sentiments. "Most organizations have no process, virtually no training for managers in what is arguably the most important thing they do. Almost everything is deemed more important than intelligent hiring," observes Bill Catlette, a former human resources executive, now a consultant and author with Richard Hadden of Contented Cows Give Better Milk. Larry Pfaff, an industrial psychologist, chuckles when talking about companies that "have a two-month process to approve a $10,000 purchase of a copying machine, but can hire someone after about a half-hour's investigation."

Why the mess? Catlette puts it succinctly: "HR is not treated with enough respect, and it is a reputation that has been earned." What's more, smart hiring is a process versus a quick business fix, and in the '90s, when the labor pool was tight, companies were happy to harpoon any warm body. Smaller companies focus even less on hiring, according to HR experts. Yet, with limited resources and without much bench strength, they actually require higher levels of performance. Why do they fail to bring order to the chaos of hiring? It's in their blood. Smaller companies tend to be run by entrepreneurs who built their businesses on intuition and trust their gut when it comes to hiring. But that approach can lead to gut-wrenching mistakes.

There are companies, however, that are making their hiring process accountable. Many of them are working -- or have worked -- with a surprisingly little-known company called Development Dimensions International, or DDI, a consulting firm that -- on the most basic level -- helps fill jobs, millions of them, with the right people. Of course, "little-known" is relative; DDI is quite celebrated within the precincts of the HR world, but unlike household-name consultants -- McKinsey, Bain -- it doesn't have a breakout brand.

It probably should. What Tom Peters is to excellence and Jim Collins is to leadership, William C. Byham, who cofounded DDI back in 1970, might very well be to hiring. Byham's mission has been to prove that it isn't a matter of intuition or luck, but can be as disciplined as any other business decision. "He has had a profound influence, as a psychologist and management thinker, and DDI has had a tremendous influence," says Richard E. Boyatzis, a professor at the Weatherhead School of Management in Cleveland. DDI got started when Bill Byham and his cofounder, Douglas W. Bray, both organizational psychologists, took the then-emerging concept of "assessment centers" and applied it throughout corporate America.

Today, 30 years later, DDI -- which is based in Pittsburgh and has offices around the world -- is involved in checking out everyone from CEOs to supermarket checkers. More than 15 million people in 70 countries have survived its selection gauntlet, with 8,000 new candidates identified each day (many by the 20,000 DDI-trained assessors). While most of DDI's consulting is for large corporations, DDI clients also include hundreds of smaller businesses, particularly those in aggressive growth modes. Byham notes: "We tend to deal with rapidly growing small companies, those planning 200% growth over the next year who need to ramp up their hiring systems."

Included in the businesses DDI has helped drive are those who make the cars you pilot: Both Toyota and BMW hired DDI to staff their new U.S. manufacturing facilities. DDI has hired everyone from the lowest level worker all the way through senior management. Today, nobody asks if a Beemer is from South Carolina or Dusseldorf, and one could make a case that DDI's hiring approach helped make American auto manufacturing credible again.

At the core of its process is Targeted Selection, which is its trademarked phrase (the company is infatuated with buzzwords). Think of it as an operating system for hiring, a set of instructions that is "behavior-based." This simply means that past behaviors -- versus, say, a personality test -- are the best predictors of future performance. (DDI uses personality testing only for senior positions as part of a holistic view, separating it from competitors, like Gallup, which rely heavily on the personality instrument.) Its "structured interview" -- central to the Targeted Selection apparatus -- probes for these behaviors through a gentle but relentless examination of past job experiences. The assessor, who either works for DDI or was trained by it, focuses on specifics. Rather than ask how you might win over a tough customer, the assessor might say, "What was your most difficult sale, and how did you approach it?" (Less squirm room.)

Like much of what DDI does, this is institutionalized common sense. Byham says people think they know how to interview because they've been grilled so often themselves and the wrong approach gets passed along, a contagion of bad practice. Interviewing is a skill that must be taught.

DDI doesn't test for basic skills. That's the job of recruiters and internal HR departments. "If you look at why people fail," Byham reflects, "it's almost never for technical reasons. It's for a behavioral reason; they can't get along, overanalyze, jump to conclusions." Byham feels confident, for example, that DDI's process would have identified behavior-based issues with Harvey Pitt, who melted down as SEC chairman last year. "Absolutely," he says. "Pitt is a brilliant lawyer. His problems were management-oriented and related to handling internal matters and the press. That would have emerged."