How to do a reference call
That doesn't suck.
As a founder & investor I've done >1000 reference calls. They can be *the* most valuable data for hiring & investing. I can hire/invest based just on references (no interview/pitch needed 😎). But the reality is most "references" are a waste of time. Total garbage.
Here are the 4 most important principles for making a good reference call:
1) Understand the context
2) Backdoor references > frontdoor ones
3) Get very specific
4) Build trust and leave open space
Understand the Context
First, the context of a reference matters. A lot. Even knowing this you'll still probably under calibrate for it.
Beyond the obvious context (Facebook != a startup), different orgs need & value different things. Some are hyper political, some are hyper meritocratic. Some value getting along, some value sharp elbows. Some managers are incompetent and negative feedback is basically a badge of honor. Some references are just friends who happen to work together.
The point is you can't just passively collect information on a candidate. You need to put in real work to figure out the context so you know how to calibrate what you hear.
You need to understand the referrer is & how they relate to the candidate. Not just basics like their role and tenure. It's what's under the surface: What's their relationship? Has it evolved? What do they rely on candidate for? How much time do they spend together?
You need to suss out what parts to trust and why they're willing to take the time to do a reference call. Best Case: Want to invest in their company so trying to help
Worst Case(s): Doing a friend a favor or have an axe to grind.
You also need to understand what kind of organization they were at. Don't just ask them to describe the culture, probe for it: Who does well there? Who left? Do you know any of them? What are they good/bad at? Would you want to work with them?
You're looking for how close the organization's ideal is to what you're looking for. Supposed negatives can be huge positives depending on how well you suss out the context.
For example: a number of founders I've invested in were "terrible at getting buy-in" or "difficult to manage"... but at highly political companies. Turns out bad career politicking = strong entrepreneurial instincts when you switch the context.
The superficial negative is often a huge positive if you understand context. And vice versa
Backdoor references > frontdoor references
Second, 1 'backdoor' reference - found and set up by you, not the candidate/founder - can be worth a million 'frontdoor' ones.
Frontdoor references are usually meh. The backdoor ones are where the insight lives.
Caveat 1: You have to give people a heads up you're going to do backdoor references and get their consent. I also ask if there's anyone they don't want contacted. Often there is sensitivity around their current employer (understandable) but most are ok with everyone else.
Caveat 2: Back door references are *usually* better than front door ones. But they can also be the worst if there's context you don’t understand (did they not get along? were they competitive for the same promotion?)
It definitely ups the ante on getting the context right. And if you're putting a lot of weight on one particular reference, referencing the referencer takes time but can be worth it
Get very specific
Third, don't let a referrer get away with broad statements ("she was awesome", "he struggled"). They're not helpful and they say more about the organization's values than the individual's skills/mindset.
Ask for specific examples:
They're an “exceptional leader”? Great - What is an example in which they showed that? Help me understand the specifics.
They're "one of the best you've worked with"? Great - how would you compare them to this other person I know you worked with? How would you stack rank them?
They were "fine"? Interesting - why just fine? what does fine mean to you? why specifically made them fine rather than great?
The details will make the feedback actually useful. And if they can't offer details then be skeptical. Very skeptical.
Build trust and leave open space
Fourth -- and this is probably the most important -- you need to build trust and create the space for honesty, even if they're trying to avoid it.
Start by introducing yourself and why you're calling. You'd be amazed at how few people do this.
Set the expectations on confidentiality right off the top: Who will it be shared with? For what purposes? You need to be totally honest, but the narrower the better.
If you leave things unclear or undefined, people will probably assume the worst. Being very clear off the top can help put people at ease.
Ask the same question multiple times in different ways. See how consistent their answers are.
Awkward silences are your friend. Allow them to exist. Some of the most insightful comments come when people are just trying to fill dead air.
Asking for “weaknesses” is useless and it's is usually a prepared hodgepodge of poorly veiled strengths. Seems like everyone works too hard and cares too much!!
Create hypotheticals so it feels less personal:
- "let's assume they quit after 6 months, why do think it would be?
- "if you could design the perfect team to compliment them, what would it look like?"
It's not about being sneaky or tricky, it's about changing the framing from a gotcha reference call to a more honest discussion of what is the right situation for them.
Lastly, follow up with the referrer. Let them know how things turned out regardless. It's basic manners but you'd be amazed how often you that makes them willing to help you again.
Good references are easy alpha
I can't stress enough how valuable references can be.
We all have very resource-intensive hiring and investing processes, but we underutilize the most valuable data available: gamefilm.
There's so much alpha being wasted ... Why?
- Maybe it's arrogance: "I can read someone really well in an interview." (spolier: they couldn't)
- Maybe it's not getting to the right people.
- Maybe it's just not knowing what to ask.
Whatever it is, everyone -- candidates, companies, founders and investors -- are worse off when we make decisions with incomplete information.1
Also published as a tweetstorm on June 10, 2022