Benefits

How to Hire: Seven Questions for Mort Mandel


How to Hire: Seven Questions for Mort Mandel

Photograph by Nannette Bedway

Famed management consultant Peter Drucker once said that the three chief executives he admired most were General Electric’s (GE) Jack Welch, Intel’s (INTC) Andy Grove, and Mort Mandel. Mort who? In 1940, Mandel and his two brothers bought their uncle’s auto supply business in Cleveland for $900—and 56 years later, they sold the company, which had morphed into Premier Industrial Corp., for $2.8 billion. I met the nonagenarian entrepreneur recently to chat about the advice he touts in his book, It’s All About Who You Hire, How They Lead. After a survey of National Federation of Independent Business members released this week showed small business owners were putting the brakes on hiring plans, Mandel’s rosier view of staffing up might prove encouraging. Edited excerpts follow.

Tell me about your hiring philosophy.

There’s a lack of truly internalized understanding that it’s all about “who.” That the selection of the CEO, and their direct reports, and all the way down the line, determines the future of an organization. Big company or small company. People will nod their heads. What else is new? But they just don’t go after it with the intensity that works.

What do they do miss?

They don’t get the difference between an “A” and a “B.”B’s are pretty good. Not bad enough to can, but not exciting enough to say we have to give this man or woman more responsibility. If you don’t have enough As, get more. There’s not enough As to go around, so you have to compete for them. You have to define what it is that you want. You can’t say, let’s interview 10 people and pick the best one. You interview 10 people, and if you don’t find an A, keep interviewing people until you find one.

That’s all a little vague.

I don’t have a classic, oversubscribed definition of what an A is. You’re looking for intellectual firepower, values, passion, work ethic. The last thing on my list: experience. I used to work with a management guru [Peter Drucker] who was transformational in my life. He said, “You identify your biggest opportunity and put your best person in the job.” I said, “What if my best person is a dentist?” Peter said, “Put him in charge of a brass foundry.”

Did you get your hiring philosophy from Drucker? Where did it come from?

We formed our company in 1940. I’d completed my first year at Case Western Reserve. The following summer my brothers and I decided to buy out my uncle’s small business, which we did for $900. I dropped out of school, my two brothers quit their jobs, and the three of us ran a very tiny, neighborhood, fifth-rate auto supply shop selling to garages. Fast forward to 1947. We were struggling. I’d go out peddling, and they’d say, “Kid, why do I want to buy your spark plugs?”  We said, there’s got to be a better way. So we talked and talked and talked, and we finally said, let’s go ask our customers.

What’s that have to do with hiring philosophy?

We identified 10 families of parts that our customers couldn’t get, and we managed to find a wholesaler for one of them. All of a sudden, we were paying a nickel for the parts and selling them for 16¢. We said, “Let’s hire an engineer.” This guy was a genius. He went out and talked to customers all day long, and he found all these things that we could sell. From then on, we raised the bar on who we hired.

He was your first employee?

We hired a secretary first, and she was an F. We didn’t know that we should have expectations yet. Eventually we said, let’s get a secretary we think is really excellent, and instead of paying x, we paid x plus 50 percent. So we learned: Pay your high-class people double what they should make, and it will come back to you in the end. We didn’t pay double, we weren’t that generous, but we paid.

That was more than 50 years ago. Is now a good time to be hiring?

Any time is a good time to be hiring. In fairness, I think the period from 1950 to 2008 was a golden era. I don’t know if the next 50 years will be as good. Maybe it’s an emotional judgment. But if I were the same age today as I was when we started, I would do it again. Any time someone wants to start their own business, if they have the character, competence, and capital, they should start it.

Clark is a reporter for Bloomberg Businessweek covering small business and entrepreneurship.

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