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Checking References is Key

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Let’s face it: if it weren’t for having employees, business would be a lot easier, wouldn’t it? But then, how much business could we create if we did everything solo? It’s the famous adage that normally applies to the opposite sex “Can’t live with ‘em, can’t live without ‘em.”

The most important thing you can do to create a top-notch staff is to hire the right people. This will save you tons of time, money and heartache. Just ask Susan Jones Knape, former owner of one of Dallas’ most successful advertising agencies.

You first met Susan in my July 29 blog post titled “Do As I Say, Not As I Did” Part I. Susan’s story involved hiring a CFO, “Mark” to take over all of her finance and accounting functions and the next thing she knew, he had gotten their company into such hot water that they owed the IRS almost $350,000 in back taxes and penalties.

The thing is, she had never checked Mark’s references! Can you imagine turning virtually of the finances of your business over to someone whose references you had never checked? I can’t, but apparently that sort of thing happens all the time. Susan just ASSUMED that because he had worked for other advertising agencies he knew what he is doing. She admits she was “just too busy for details like that.” Later she learned that Mark had a track record of financial fiascos at all those agencies that once so impressed her. Not spending an hour or two doing her homework cost her big time.

Sometimes when I am asked about my book, I am asked which mistakes are made most frequently. I believe the most common mistake we make is not doing enough research or reference checking. Whether you are hiring an employee, contracting with a key supplier, or even going into a partnership, NOTHING TAKES THE PLACE OF THOROUGH REFERENCE CHECKING!

I think women in particular have a tendency to be too naive and trusting. This was actually proven to me during my interviews for my book. The types of mistakes women make more often than not involve making assumptions about things and people because we want to trust people and think the best. While that is a great way to be in personal relationships, in business it doesn’t always work so well. There’s a fine line to draw between being a positive, savvy businesswoman and leaving yourself vulnerable to expensive mistakes because you are too trusting and naive.

So how do you do thorough reference checking? Think outside the box. Talk with someone who wasn’t listed as a reference by a potential vendor or employee. Hire an agency or use an online service like Intelius to do a background check. One savvy businesswoman I know offers this unique practice that protects former employers. The woman calls deliberately after hours and leaves a voice mail for the prospective hire’s old employer. She says that she is considering hiring the person in question, and that if they can give the highest recommendation for the employee then would they please be sure to call back within 24 hours of the message. If not, call back after 24 hours, or don’t call at all.

She says this has not failed yet. Employers who respect a former employee will go out of their way to call back within the time window.

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