Charles Schwab’s CEO Takes An Innovative Approach to Hiring

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Several months ago, the New York Times interviewed Charles Schwab’s CEO Walt Bettinger about some of the company’s hiring practices. Before offering candidates a job with his financial institution, Bettinger wants to know what type of person you are. The questions he asks are simple, but he explains the rationale for asking them. His responses were enlightening. (Author’s note: I do not work for Schwab and never have, although I am a current client.)

For example, during the hiring process, Bettinger asks, “What are your greatest successes in life?” He asks this to find out how a candidate defines success and how they view the world. Do they see the world as revolving around others, or around themselves?

He also asks about their greatest failures. Do they own those failures, or do they blame them on someone else?

But it’s the final exercise that reveals a candidate’s true character, as well as Bettinger’s hiring motives.

Bettinger invites the candidate to breakfast, but he arrives at the restaurant a little earlier and arranges with the manager to mess up the candidate’s meal — intentionally. Bettinger says he wants to see how the person responds in situations like this and how they deal with adversity. Mistakes happen, he explains, and how a person responds when someone else makes a mistake reveals the type of person they are. Do they get angry and upset, or do they remain calm and unflappable? Can they remain respectful of others while addressing their mistake?

Berating someone for a messed up breakfast order, or not saying anything at all are messages you don’t want to reveal to a potential employer. On the flip side, these types of questions and hiring practices reveal a lot about the employer too.

It is one thing to ask a candidate in an interview how they deal with adversity, or how they address problems with co-workers and clients. Candidates can respond in any way they wish. But setting up a scenario to observe in real-time how candidates behave in adverse situations, which may not match up with what they said in their interview, is gutsy and inventive.

Hiring practices and interview questions like the ones presented by Bettinger also reveal a lot about him as a CEO and what he values in his employees. If you are looking for a job, consider how they conduct their interviewing process. Is it complicated and cumbersome? Are there multiple tests to pass? Do they do group interviews, or a string of one-on-ones? How many people do you have to see before an offer of employment is given?

Good communications and respectful behavior on the part of the CEO tends to have a trickle-down effect. If a CEO expects it of himself and his employees, chances are his managers and directors will also expect it of their staff. However, if the CEO is unscrupulous and dishonest in his dealings, he indicates his lack of integrity and shows that such behavior is acceptable and tolerated in the company. Is that the type of leader you want to work for?

These might be good questions to ask the next time you interview for a job: What is your CEO like? What are their goals and expectations for the organization? Do the CEO’s values reflect your own? How do they treat their employees?

Using the Schwab story above, Bettinger reveals a lot about his company at the same time that he observes a candidate’s behavior in a restaurant.

* Innovativeness – By inviting a candidate to breakfast, asking the restaurant manager to intentionally mess up their order and observing their behavior shows an innovative approach to hiring. You are likely to find out more about someone by observing them in real-world settings like a restaurant than you do in a formal office environment.

* Emotional intelligence – When asked, most job candidates would say they get along well with others and handle problems professionally. But the breakfast scenario shows their ability to do so in real terms. How they interact with others in public reveals more about a candidate than any of their responses to interview questions in a private office.

* People-oriented – Financial services is a people-oriented business. How you treat people in that kind of business environment is critical to the company’s success. Bettingers practice reveals a desire to hire people with strong character, not just strong professional experience. All things being equal between two candidates in terms of education, knowledge and professional experience, strength of character may prove to be the deciding factor.

The next time you interview for a job, sit back and observe the communications patterns of the hiring manager. You just might learn a thing or two about the company.

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