Never hire someone unless they raise the average


As an investor, I have a rule. If I’m going to add a new position to my portfolio, it needs to be better than what I already own. There is no use diversifying to diworsify. Jim Rohn used to say that you are the average of your five closest friends. If you hang out with losers, you will become a loser. If you hang out with winners, you will become a winner. Strive to have friends that are better than you – morally, financially, marriages, etc. and you will rise to their level. Don’t add anything to your life, investing, or your business unless it makes it better.

[Photo from Fundable]

Jim Koch, is co-founder and chairman of Boston Beer Company, which is known for producing Sam Adams. In a recent interview, Jim talks about his hiring practices and how they evaluate a candidate.

The Boston Beer Company has a simple hiring standard – never hire someone unless they will raise the average. Before we employ anyone, we ask, “Is this person better than the average of the current people we have working in this position?” If the answer is no, we don’t make the hire. When you bring someone on board who is below your company’s average, you degrade the quality of your company. If you always hire people who raise your average, your company gets increasingly better. We sometimes spend an insanely long time searching for someone to fill a spot. I think our record is 18 months (for a sales position in Arizona), but it’s now fifteen years later and the woman we hired is still with us. The payoff is definitely worth it.”

"When you hire someone new you are either improving your company or degrading it. There is no middle. If you keep hiring really good people and raising the average it sets an example for everyone else. When we are hiring, we are hiring the person, their traits and behaviors and motivations. We very rarely hire for experience, education, and resume. I think that is a big mistake that a lot of companies make where they lock themselves into this caste system where an incredibly talented person that doesn’t have the right degree or background gets overlooked."

How do you make the culture work?

“We serve beer. Beer is the ultimate social network.”

If you want to hear the story of how Jim Koch founded Boston Beer Company, I would highly recommend this interview: Samuel Adams Creator Jim Koch on Scaling up, One Barrel at a Time or his autobiography Quench Your Thirst: Business Lessons Learned Over a Beer or Two.

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