You Don't Need A-Players in Every Role: A Hiring Guide for HR Leaders

Most founders fill the first fifty seats with friends and former colleagues, and it works right up until it doesn't. Melissa Duncan has been the first HR hire at almost every company she joined, tech startups in the 50-to-200 range, and now runs a fractional HR practice for PE-backed SaaS companies. Her read: the team that reaches product-market fit is often not the team that scales past it.

‍

When do a founder's early hires stop scaling the company?

‍

Usually two to three years in, when a miss surfaces, a product that never shipped or revenue that stalled. Duncan sees the pattern repeat: the friends-and-network leadership team that carried the early build starts to crack, and the company needs an overhaul at the top. Headcount is the other tell. Around fifty people, informal people processes break and a complaint or harassment issue lands on someone not equipped for it. One venture capitalist framed his own exit to her this way: "I like to come in really, really early. And when the company gets to the point that they need you, I'm out the door."

‍

Why run topgrading on every director-and-above hire?

‍

Because what makes a senior leader succeed rarely shows up on a resume. Duncan was skeptical until she was put through topgrading herself, then trained in it. The method walks back through a candidate's whole career in a two-to-four hour interview, surfacing integrity, likability, and assertiveness, and it screens out the high-ego operators it labels competent jerks. She also gates the process behind a CEO chemistry check, because if the founder's gut says no, three hours of interviewing will not save the hire. "I wouldn't feel comfortable recommending someone for a director or people leader role or even a C suite role that has not been top graded."

‍

Does every role need an A-player?

‍

No, and trying to put one in every seat backfires. Duncan calls A-players in every seat unaffordable and unrealistic, and points out that highly scripted work, a call center or support role, does not require one. She saves full topgrading for director-and-above and revenue-driving roles, and runs a 30-minute version of the same questions for everyone below. "You do not need an A player in every single role. My take on it is it's unaffordable."

‍

Does culture actually move business results?

‍

Yes, because culture decides whether your strategy gets run at all. Duncan's framing: "Disengaged, confused, frustrated people will not execute on your strategy, no matter how good it is." She skips the pizza-party playbook for small, consistent touches, monthly fifteen-minute donut chats between random teammates and offsites that spike survey scores right after. When she tied those moves to falling turnover in a board meeting, the board told her to report on the people at every meeting going forward. eNPS and voluntary turnover followed.

‍

What does revenue per employee change about hiring and AI?

‍

It pushes toward a smaller, more qualified team rather than a bigger one. Brought in to fix a client with a large team and low revenue, Duncan found duplicate roles and unclear ownership, then redesigned the org around fewer, better-fit people. "We're shrinking it down a little bit on headcount, but revenue per employee is higher because we have more qualified people." On AI she screens for people who already use it, and favors what one of her CEOs calls a human-first approach to AI: keep the smart people, use AI to raise their output rather than replace them.

‍

The through-line is uncomfortable for anyone who files hiring rigor and culture under soft. Both are the machinery that turns a board deck into shipped work, which is why Duncan puts them on the same line as revenue.

Logan (00:00): I'm here with Melissa Duncan. Is there anything else, Melissa, you would like the audience to know about you and some of the work that you're currently doing?

‍

Melissa Duncan (00:08): Yeah, I just launched a fractional HR practice where I'm a consultant and advisor for PE backed SaaS companies. And I come from a long background of, you know, working for tech companies, usually in startup ish mode, anywhere from 50 to 200 people. And with the switch in career and going out as a solopreneur, I love the variety. I get to be involved in all kinds of different businesses. So just having fun and learning something new.

‍

Logan (00:38): Nice. That's great. And this is gonna be a good discussion for everybody because our audience is mostly PE backed and we get to get some of the ins and outs. And in going through the prep, I have a lot of questions for you, Melissa, that piqued my own interest about how the world is moving.

‍

But one of the things that we talked about that I wanted to dive into first was, we're gonna talk a little bit about like inflection points in companies growth. And one of them is just how do you know, like when you have the founding team building and scaling, at what point do you identify if they're not the right people to take it to the next level? And like what do you do in that? You said that's like a common pattern that you end up seeing.

‍

Melissa Duncan (01:23): Yeah, it is a common pattern. I've seen quite a few founders, CEOs hire their friends, for lack of a better way of putting it. It's people that's in their network, which, by the way, I think networks are amazing and that's what they're for. But usually there comes a point a couple years in where there's a miss. There's a product that never got launched, there's revenue that's not getting made, something is happening and I feel like it's a common pattern of having to completely overhaul, especially the leadership team, about two to three years in because those folks can't, maybe they got you where you are, but it's tough for them to get you to the next level.

‍

Logan (02:01): Yeah, and that seems natural though, because like every two to three years, like business changes, environments change, and that may not be a bad thing, but do you always see that as the case? Or are there like founders that you end up running into that end up being able to scale it and like that never becomes the conversation?

‍

Melissa Duncan (02:23): I've seen a few founders that have been able to scale it, even with their tight nucleus of friends, maybe from a former company. It's usually people that they've worked with before. So they know they're compatible, they know what this person brings to the table. I've seen other companies who just go out and hire someone they really like or, you know, they've kind of known for a while, and that's more of a wild card experience.

‍

Logan (02:35): Gotcha, gotcha. And in that staging of making that happen, are there revenue or headcount points that you tend to be like, okay, now we should start thinking about this.

‍

Melissa Duncan (03:02): Definitely. So I've been brought in as the first HR hire at almost all of the companies I've worked with and clients I've worked for. And they're usually around 50 people. For some reason, that's the magic number of when things start to come up. So an employee complaint, a harassment issue, something that's sort of maybe bubbling up that the founder, CEO, or even office manager, whoever you have sort of running your people processes aren't equipped to handle.

‍

Logan (03:29): Okay, the fifty mark. Yeah, like I always think of like the fifty, hundred, two hundred, and then like revenue bands of, like they always think of, you know, 10 mil ARR becomes the product market fit benchmark, then, you know, ten to twenty is kind of like this gray zone, and then once you get twenty to fifty is like the next one, and then fifty to a hundred. And each of those stages is like really difficult to get past.

‍

Melissa Duncan (03:29): It's usually around that fifty mark.

‍

Melissa Duncan (03:55): Yeah, I had a venture capitalist tell me a couple of weeks ago. He said, I don't like HR. And I was like, what do you mean? And he said, well, I like to come in really, really early. And when the company gets to the point that they need you, I'm out the door. So I thought that was a really interesting way to look at it. He's acknowledging that there's a certain point where you do need a people person, and at that point, I guess he feels like it's grown past, you know, where he wants to be involved.

‍

Logan (04:20): Interesting. I wonder if there's like this hangover effect from that being super romanticized in the 2010s with kind of the like zerp era of like VCs and startups and everything. Because now it's like a very different game because people want profitability very early, almost immediately. And like it's a different way to build now. And I wonder if some of that is gonna shift given like, especially private equity is a much bigger player right now. It's like taking the VC void almost.

‍

Melissa Duncan (04:50): Yeah, it could be. I saw quite a change in the relationship around, you know, HR and founders, especially around COVID. At that point we were sort of asked to take charge of everything and figure it all out. And that was the first time in my HR career where I felt like I had a seat at the table. But you're probably right. There was a bit of a change in the early 2010s as well.

‍

Logan (05:00): Interesting. Interesting that that was like an inflection point, that that is when you started to feel that HR had the seat at the table. I didn't realize that that was the case.

‍

Melissa Duncan (05:23): It was for me and sort of in my network. I was asked to sit on panels, speaking panels of, you know, what we were doing to keep people engaged, keep people safe. We had to figure out, you know, who do we bring in the office? What requirements do we have? Just everything. And everyone was looking at me. So I remember being on some webinars where it was super early, and I was like, I'm figuring it out just like you are. Let's brainstorm together. We just had, you know, a big HR round table where we try to figure things out.

‍

Logan (05:54): And that probably hasn't let up because now I talk with HR folks and it's the same situation with AI because nobody has a roadmap for that either. So yeah. But at any rate, so you get brought in, you're the first people person, and one of the things that I wanted to chat through, and I'm actually super interested in this now that I've done a little research on it, is the top grading methodology of hiring and

‍

Melissa Duncan (06:01): Yep. What are we gonna do there, exactly?

‍

Logan (06:19): When I read it, I was like, that makes total sense to me. And I don't know why we got away from it. But so I guess the initial question is just why did you choose the top grading methodology? And like how come you're using that for director and above hires?

‍

Melissa Duncan (06:35): Yeah, I had never heard of top grading until I was top graded for a role. And I did what everyone else does and I started trying to figure out what this interview is going to be about. What are they trying to get at? Like, and it's almost impossible to prepare for because it's really looking for behaviors and patterns and you don't know what the interviewer is gonna ask you. There is a standard question set, you know, that's recommended, but I try to make it a little, you know, a little more enhanced there.

‍

But the top grading just says the biggest driver of your business results is the quality of the people in the seats. And I ended up getting some top grading training. I honestly at first I was like, this just feels too much for the roles that I was hiring for. But as I sort of went, you know, went into hiring and recruiting for a director and above roles, I find it is super critical. I wouldn't feel comfortable recommending someone for a director or people leader role or even a C suite role that has not been top graded.

‍

Logan (07:33): Yeah, what I really liked about that methodology, and I get the sense that you could apply some of the principles throughout all roles, but it makes sense like you wouldn't do a two to four hour interview. For those that are listening that aren't familiar with like a two to four hour interview, it's the going back throughout your whole career to try and figure out like your decisions and moving alongs and one of the things that when I was coming out of school years and years and years and years ago, my uncle or a family friend had kind of walked me through how to interview. And it was almost like he was prepping me for that type of interview because he was like, you should talk about where you're born in the family, like what sports you did, like why, like where you made your choices all along to show decision patterns.

‍

And I thought that was interesting. And especially in the context of this, it's like, yeah, like all that does make sense because there are patterns of all of those things that show up for a role. And then when I got in later in roles and especially into tech, everybody just wanted to know the recent role. That was it. They just wanted to know your very recent one. It was almost like they weren't looking for culture fit or anything. It was just looking for skills like trade school style.

‍

So I don't know if you have opinions on like that shift and like shifting back and forth into the different styles.

‍

Melissa Duncan (08:50): Definitely. I would say before I took the top grading training, like even before I had that role, I was sort of like that too. I just looked at the resume. I'm like, okay, what job titles have they held? What did they do there? Check, check, check. I like you good enough, right? And so can you start Monday was kind of even my own interview style. When I got into the top grading training, I was learning about things that are not on your resume. So we were being trained on like how to pick up on integrity, likability, really solid, you know, inspiring others, things that are not printed on your paper resume. Another thing that I found really interesting was like evaluating someone's assertiveness because in some of these managerial roles, we've all worked probably with people who are like so assertive and maybe even like aggressive or highly ego driven.

‍

Those are the people that top grading teaches us are competent jerks. And people don't want to work with those folks anymore. So that's one thing that I'm really weeding out when I do these top grading interviews. And it's funny because these interviews are a couple hours long, but I can usually tell in the first 15 minutes how the conversation's going to go, just kind of based on their willingness to, you know, be open, talk to me about their history. Some folks are like, I don't have time for this. I'm not even interested in this role. And then, you know, you can wrap it up pretty quickly.

‍

Logan (10:16): Interesting. Now that you mentioned that, I'm like a little worried about recording this episode and we're like 10 minutes in and you're like, my god, I gotta end this with them. No, I'm just kidding. But at any rate, well, that's interesting.

‍

So if you're doing the two to three hour interviews, one of the other interesting things you had mentioned in doing this, and the reason we're going through this for everybody listening is just picking up different skill sets for the team that you're trying to assemble. And we're gonna get to a question about some A-player stuff that's a little controversial. But is this chemistry with the CEO piece? So you had mentioned like before you even come in and do top grading, they've met with the CEO and leadership team to get some kind of chemistry fit. Like, what's the importance of doing that first?

‍

Melissa Duncan (10:59): Yeah, it's just so important because sometimes or most times the CEO may have a gut check that says that this is not the right person for the company. I've really learned to, when I partner with these folks, when I'm working with them on different roles, I trust them and they trust me. And so if their judgment says I cannot work with this person, then a three hour interview doesn't matter.

‍

An A player behavior style doesn't matter. They're just probably not gonna work out. So these people I'm working with, they have very strong instincts. And you know, I really trust them. Compatibility, I think, is very important, especially in a leadership team. And so I wanna make sure that this person who shines on paper that has this awesome degree actually clicks, you know, with the CEO. And we don't just have a brilliant hire, we have a brilliant dynamic on the team.

‍

Logan (11:51): Yeah, and that's interesting because, you know, like you can have A players or you can have, you know, like I don't wanna, not that any particular school is bad, but like, you know, the Harvard MBA or like any of that kind of stuff. And they may not be successful in the given situation. And there's like a scheme fit or like a business model fit for people as well, whether 'cause they can be successful in one place and not in another, and it has nothing to do with them. It just has to do with, it could do with the environment. In that chemistry that you talk about.

‍

Melissa Duncan (12:17): That's right. I just top graded for a role and I asked the CEO, what is not on the job description? What are you looking for that's not written down? You know, that's not just can do this, has done this. And he said, I need someone that's so innovative that they think about things differently. And so, you know, I've met a couple of people, they were qualified, they match, you know, the boxes line up, they match on paper. But we found one person that really had an innovative mindset. I think it just set him apart when you've got three fantastic candidates, you've got that one person that has a characteristic that's not necessarily on paper.

‍

Logan (12:56): Yeah. And what makes somebody, like how do you tease out like an innovative mindset during this?

‍

Melissa Duncan (13:01): This person gave me some solid examples of, by the way, I didn't even ask for this example that he provided, but he said, you know, I worked on a role with hearing impaired people and I was trying to reimagine how to take care of these people in a way that's never been done before. And he explained how he built this system that's integrated into hotels that, you know, wakes them up in case of an emergency and it's got these different lights throughout the hotel room. And I just thought it was like a 10 star example of someone not only that has empathy for other people, but can think outside the box about a problem that maybe no one else is even thinking about.

‍

Logan (13:40): Yeah, that's a good example. I think we have a bit of a controversial take here. And as you're going through this and you're looking for A player personality traits, not every position needs an A player in it, right? Like everybody always, like most job descriptions I've ever read, it's always like, we want A players and this, that, or the other. And then you get in and it's like, you might think like, if everybody here is like, I don't know what they were looking for. But like why don't you need that?

‍

Melissa Duncan (14:05): You do not need an A player in every single role. My take on it is it's unaffordable. If you had an A player in every role, how are you gonna afford that? It's unrealistic. And then when you have a role such as, I like to use the example of someone that works at a call center, that's a highly scripted role, or even a support person's a highly scripted role. They're gonna do the job and, you know, that's it. For a revenue generate like a high profile role or a people leader, I believe that you have to have the A players for those roles.

‍

So I just will not take on anything below a director role for A player fit. Now I do have my own version of top grading screening questions. I'm asking some of these questions, but in a 30-minute format. I'm not going to have, you know, an entry-level employee come in and sit and talk about two hours of their career history, they may not even have it to discuss, but there's certain things you could pick up on in a screening, I think, you know, that's just as valuable.

‍

Logan (15:01): Yeah. So running top grading, finding top talent for your top execs has to be one of the best ways to start ensuring that culture is at the forefront. And you had mentioned in prepping this that you could talk about culture all day. And I find culture personally, I find it super interesting because it is an intangible, everybody wants to measure it.

‍

But it may not be, like when I was sitting back thinking about like talking about to you about this, I was like, wow, there's a lot of culture stuff that isn't like the initiatives, that it's not an initiative that you can run. But right now, I don't think culture is getting its limelight given the intense pressure on growth. But how do you think about culture and moving business needles? And I threw a lot of random stuff in there, but I'm gonna touch on them as we go through because I find it interesting. So let's just start there.

‍

Melissa Duncan (15:52): Yeah, I think culture can be seen as soft, or as you mentioned, there's so much pressure to just make money. My take on culture is disengaged, confused, frustrated people will not execute on your strategy, no matter how good it is. You have to have the culture piece. And it is interesting when I speak with more of the early stage founders, they're brand new. So they're like, we don't really care about culture yet. It'll kind of build itself. We just want compliance, right? Even though they say that out loud, they're still bringing me in. Okay, morale's really down. This person's losing their entire team. We've had to rehire an entire whatever group. And so they see it in the numbers. And so that's where I come in to start.

‍

You know, you can't kitchen sink it. I can't give you every culture initiative ever. Write a playbook and just plug it in. You have to sort of do one thing at a time and be very genuine about it and show the company that you care about the culture. That's the number one way to get them on board with culture initiatives. Are the people leaders showing up to culture events? Is the CEO showing up? Like, are they really invested in

‍

Logan (17:01): Yeah, and I wanna double back, like the founders that don't want to do culture and all that. They are by way creating a culture though in the company by doing it that way. Whereas like it doesn't have to be, you know, an initiative or a program. There are things like the everyday pieces that's then embed in the organization. And

‍

Melissa Duncan (17:09): They are.

‍

Logan (17:21): Then you see disengagement. I mean, right now disengagement's huge in companies. I think it's like the biggest uptick since like, in twenty four to twenty five was like the biggest uptick they've seen in a decade or something like that.

‍

Melissa Duncan (17:33): I think you make such an interesting point too, because when I'm thinking about companies that I've seen where culture's kind of in the toilet, it's all this sort of plugs in together because your leadership team, maybe some of them are super toxic people or they're the brilliant jerks that you hired early on. So again, just getting the right people in the seats very early, I think can save a good bit of that. But you're right. If the CEO doesn't care about culture, that does create a certain culture.

‍

Logan (18:04): Yeah, and I think like I want to get your take on this. Like, as I was thinking through this, I was thinking like, you know, often when I talk with HR folks and business leaders, they say we want culture, and so they create a program around it. Like there's always the online stereotype of like, throw the pizza party kind of a thing. And I like, to me, when I start to think about it and I have a few examples.

‍

Like culture doesn't necessarily mean people feel good at work or it's like a feeling good type of thing, because there are cultures where you're working extremely hard, but the culture is like we know that a big payout's coming. And so this is short lived. It's a two to three year stint. And I was thinking about like, like Anthropic probably, I know nothing about Anthropic's culture or anything, other than I would imagine being a frontier model. Like you work a lot, you're working very hard in long hours right now, because you're at the forefront of innovation. And everybody's probably bought into that and okay with it and happy about it. Like, what is your thought around culture being like such an intangible piece that isn't necessarily programs that you're embedding in the organization?

‍

Melissa Duncan (19:14): Yeah, I love that you brought up the pizza party because I call it the pizza party playbook of, you know, forced fun and, you know, come over and get a piece of cake on Friday afternoon. I see it as, you know, it's not just morale, but do people wanna come into work on Monday? Do they want to do the work that they're doing? Sure, some companies, you're right. They're just building, building, building. They know it's the grind and they're gonna get out of it soon, but that's not sustainable for another type of company. It's not for everybody. I saw something the other day that said it was something about going to work for startups and wanting work-life balance. It's possible, but it's not probable, just because there is the grind there in the beginning.

‍

Logan (19:45): And for everybody. That's not for everybody, too.

‍

Melissa Duncan (20:00): So I do come in and, you know, really embed myself, make sure people trust me, they can talk to me. And then I start slowly implementing things and do these consistent small touches over time. They make such a huge difference.

‍

Logan (20:09): Yeah, that's good. And I, like, I know startup culture has that thing of like, it has to be a grind, but there's also like lifestyle companies as well. Like there are very different types of companies around. And I find it interesting that it's like there isn't a one size fits all of how these things operate. Like in the Anthropic example, I wouldn't, that, like that, I'm not gonna do that right now.

‍

Like that's just not where I'm at, but not that they'd ever hire me, but like that type of grind, you know, type of thing. So you talked about donut chats, so like some of these things that, okay, you go in, get employees to listen, and I love donuts and I'm pretty sure most people do. But like what was the donuts chat that helped you tie like different culture initiatives to outcomes?

‍

Melissa Duncan (21:03): Yeah, and some people may call them coffee chats, we call them donut chats. It's just a 15-minute meeting with someone random on the team and it's once a month. One of my clients right now is 100% or 99% participation rate in these. And I saw over time we were getting so much positive feedback from these because the people on the team really like each other. And they genuinely care about one another, but they never really get to talk to one another. And so as we implemented that, we saw the increase in just, you know, shout outs and conversation. And also in the employee, like the eNPS score. So that slowly started going up over time as well. And I think that is a big piece of it because you don't have to do it. You don't have to be signed up for it. You get signed up for it, but you can opt out and everyone wants to do it. So I think it's an interesting way for folks to get to know each other.

‍

Logan (21:57): Now, were donuts actually involved?

‍

Melissa Duncan (22:03): Donuts are not actually involved. That's great. A donut emoji gets involved quite a bit, but it's really just something, it's small, it's impactful, but it's something people can actually commit to. Yeah. But donuts should be involved.

‍

Logan (22:06): Okay. Yeah, that's good. Yeah, that would be good. So then if you're running something like that and PE firms want their portcos to get outsized results and to grow, like how are you talking to that, the board or that set of executives in this type of thing is going to help you move that because people are going to be productive. Like how does that conversation kind of look like for you?

‍

Melissa Duncan (22:41): That's right. It's funny, when I was first brought on with a former client, they invited me to the board meeting and a board member said, how are things going? Just this broad question, right? And I start talking about culture and results and performance and all these things. And he said, you should be here at every board meeting telling me exactly what's going on with the people from now until whenever. Do you understand? And I was like, I totally understand. So they really care about what's going on with the people because they understand it is tied to the results and what we were trying to do.

‍

So one of the things, you know, that we talk about, I definitely present, you know, all of the eNPS and morale shout outs and all of that, sort of just metric dashboard. But we talk about the different challenges in the culture. Turnover is another one. You know, we had very low voluntary turnover, which was fantastic. But I was able to kind of tie that back to all these little things that we started doing. And then one thing we did that was very impactful was have, you know, an employee off site. And if you survey the team right after one of those, after people have gotten together, I mean, it's astronomical the difference. And then you can see all the metrics ticking up.

‍

Logan (23:42): It is wild what real life interactions will do for a team. And I mean I know that like you don't necessarily want in office all the time, like you know, I work remote, like all this stuff, but after you hang out with team in person and do that every now and again, like you generally just get a sense that you know things are okay.

‍

Melissa Duncan (24:16): And you sort of remember, even though we're all remote and we're all at home, we're working as a team, we're rowing in the same direction, we're aligned on what we're going to accomplish. And yeah, it's just so fun to laugh and see each other and high five each other and just all the things that come with being in person.

‍

Logan (24:33): Yeah. So the last thing that I wanted to chat through, it kind of goes with where we started in hiring and different inflection points, but it's like what types of things do you see break when companies start to scale? From, I mean, you could use from 10 to 500 employees, 50 to 500, but like what are some things that you start to see breaking along the way?

‍

Melissa Duncan (24:34): I would say first and foremost, it's usually compliance. You've got people in all these different states and I'm sure HR people will understand there's so much that goes into being registered in each state and making sure that people are classified correctly and all that. And that way you don't set yourself up for trouble when you least need it or at all. And then the other thing is really just poor spending. I've seen folks fundraise and be very successful at fundraising and then just go out and spend whatever on roles that you would never even dream of, just to try to go viral. I think I told you in our intro call, like I saw someone hire a TikToker that was astronomical spend and nothing really came of it. So just that poor spending or sort of like decision making around where to use the money because it seems like so much money and you're so excited that people sort of lose track of where it's going.

‍

Logan (25:49): Yeah, and that was acceptable for a time. And now like that game has shifted. So even if like let's say you built a company and scaled it in the 2010s, and now you're going for around two or three now, like that entire landscape has shifted in how to scale companies and that spending framework. So it's also a bit of a learning curve, I'd say lighting money on fire.

‍

And it's hard not to. But everything is more expensive marketing wise or just business building wise, I should say. What do you, like what breaking point, like are there different ones when you're working with startups or companies that are growing organically versus those that are getting acquired and merging?

‍

Melissa Duncan (26:14): Hmm, that's an interesting question. I would say yes. With the companies who are growing organically, some of the breaking points could just be, you know, a first real HR situation. So an ask for accommodation that needs to be handled with care, obviously. Some kind of a harassment complaint, maybe a performance problem. It usually happens, you know, to those companies who are growing on their own. And then at that point, if you bring an HR leader in, maybe they have to spend six months kind of cleaning it up instead of just building and moving forward. So that's sort of what I see.

‍

Logan (27:06): Interesting. Okay. And then on these growth angles, one of the metrics that I don't know if it's always been a big one, but it is now, like I hear it all the time. All HR leaders are talking about is revenue per employee. And I've talked with some folks and like, yeah, like we didn't, you know, that used to sit with finance. Now we're like into it a little bit more. Like how are you seeing that with scaling companies right now and thinking through that one metric that is like

‍

Melissa Duncan (27:34): Sure. So critical. And it's at the top of the dashboard, I can tell you that. Exactly.

‍

Logan (27:34): Been at the top of his mind. Especially for PE backed companies, I mean.

‍

Melissa Duncan (27:52): I was actually brought in for a former client to sort of flip the team. So we had a very large team and very low revenue. And so we assessed people on that team and just sort of realized we had a lot of duplicate roles. Nobody really understood how the work was getting done. And one thing that we did was sort of over time redesign that organization to where we're shrinking it down a little bit on headcount, but revenue per employee is higher because we have more qualified people, or we have new folks in different roles, or it's a better fit for where we are.

‍

So with this AI craze, we're obviously looking for people who are AI forward. We want to see how they use it in their day-to-day life. This is one thing we're asking during screening to make sure that they are ready to embrace that and run with it. Whereas you have some other folks who are anti-AI, I'm not touching it. I don't feel comfortable. Sometimes you do have to kind of, you know, make those decisions and changes. But smaller team, sometimes means every hour matters more and you've got better output, you know, per person.

‍

Logan (28:46): Yeah. And it's interesting because the AI piece does change the dynamic. I wonder, like I think right now, I mean, the headlines are layoffs, right? And that's like the easiest way to move that number. And I don't know if that's necessarily right, but like, do you talk with anybody who's like thinking about it like in the much harder context of like how are we going to produce more revenue now with the same headcount. Like that's just not what we're gonna do for our revenue per employee. And like they're being a little more creative on that front.

‍

Melissa Duncan (29:17): Yeah, definitely. I'm working with the CEO right now who is very much what I would say human first, AI enhanced mindset. So we want to keep our people because we have really smart, talented people who are innovative and know what they're doing. And so they're using AI to, yes, boost what we're already doing, instead of just absolutely, you know, AI in person out.

‍

So to answer your question, yes, there is a big focus on that. And I would say, especially in the PE backed space, I know with some software companies there was a bit of a panic of like, AI just completely does what we do and now they may not need us anymore. But I think embracing it, even integrating it into your product, and then making sure that you have human eyes on the work that AI is producing, it's, you know, it's not always a hundred percent reliable. So

‍

Logan (30:06): Yeah, and it's ever changing and we're like still in the early stages, I think. Like, I mean, everybody's trying to have these hot takes about like what it's doing. And it's like I was thinking outside of this, I was like, you know, there's people, like you see reports of people who work at the frontier models and they're surprised at what AI ends up doing. So how in the world is anybody who's not actually working on the models knowing exactly what's happening?

‍

Melissa Duncan (30:11): We are.

‍

Logan (30:31): Like if people are actually surprised who are working on it, they're like, we didn't realize it was gonna be like that.

‍

Melissa Duncan (30:31): I know. That's yes. I noticed when Claude released an HR plugin, my HR networking groups were popping off. Like, what does this mean? And at the end of the day, I never talked to any CHROs who are out here vibe coding like applicant tracking systems from scratch that are working for, you know, a thousand person companies. But you're right, we're still early and I'm curious what we'll think of all this in like ten years. And look back and see how much everything changed.

‍

Logan (31:03): Yeah, it's gonna be interesting. I mean, and like when Claude released the HR plugin, I mean, like we did an MCP for us as well, which is actually, it's super awesome. I mean, and that unlocks massive capabilities, like not necessarily us and our plug, but just like that type of work where you can do those things and then have a proprietary data set running a model on and doing something that's interesting.

‍

So but I don't think we're gonna make any predictions here because while I enjoy the learning aspect, I don't know anything. And so we all have a lot to learn there. But Melissa, is there anything else that we didn't cover that you would like to chat with the audience about?

‍

Melissa Duncan (31:46): Yeah, I would just say, when you're building these foundational teams, you're scaling up, you know, do some research and look into the top grading methodology. Those folks really set the standard. They set the culture, they set the tone of the work. And I think that is just a really important thing that we should not, you know, sort of dismiss and say, you know, that's kind of old school. Sometimes old school works.

‍

Logan (32:09): I'm a big fan of old school or old ideas coming back around because they're usually at least now founded in principles rather than tactics. And so I like that. And I do like the call out, like knowing that leaders and your executive team set the stage for everything. And I think that that is so critical. And I don't know, I'm of the opinion you can't outsource that. You can't hire that in. Like there's just a difference in that mindset, but at any rate.

‍

Well great Melissa. I appreciate you taking the time to chat through all of these different items. Hopefully you enjoyed it as well. Where should people connect with you?

‍

Melissa Duncan (32:45): Definitely enjoyed it. Thank you so much. You can find me on LinkedIn, Melissa Duncan, and my website is hr-exec.com. I'm also on Substack under HR for the stars. It's an HR blog sort of mixed with pop culture. And I would love for people to engage with me over there as well.

‍

Logan (33:04): Well, we will put all of that into the show notes for everybody and thank you everybody for joining us today.

‍

Melissa Duncan (33:11): Thank you so much, Logan.