People: The First Decision Every Growth Company Must Get Right
“A mediocre strategy with A-players executing with discipline will blow away your competition.” – Mike Goldman
The February KRS Insights Breakfast featured guest speaker Mike Goldman, President of Performance Breakthrough, who works with leadership teams to ensure they have the right people, strategies and execution habits for growth.
For those who missed the breakfast, we wanted to share some of Mike’s insights and best practices.
Mike started off by sharing the four decisions CEOs face to drive scale and growth: People, Execution, Strategy and Cash. Of these, decisions about people are by far the most important. Quoting Jim Collins, author of Good to Great, Mike pointed out, “First take care of the who, then the what. If you don’t have the right people, you’re going to be miserable.”
Key insight: A great strategy with the wrong people and/or undisciplined execution will fail every time. It is vitally important to put practices in place so that your company has A-players who can execute effectively.
Who is an A-player?
You may believe you have great players because you’ve worked with them for years. But you probably don’t have as many A-players as you think. For instance, your employee Joe might be a great guy who shows up for work on time, but he’s become complacent in his job and his skills outdated – not what you need in an A-player.
Ask yourself this question: Would you enthusiastically rehire everyone on your team? The answer to this question can mean huge changes within your organization.
Kip Tindell, founder and former CEO of The Container Store, believes one A-player’s productivity equals that of three average employees’ productivity.
Being an A-player, however, is not just about productivity. You must take into account your organization’s core values. “If someone on your team is highly productive, but not living the core values, they are a cancer in your organization,” said Mike. “So a salesperson who beats his or her quota every month but is abrasive to customers is hurting, not helping your organization.”
Determining your organization’s core values
Knowing your organization’s core values – what is best and most noble about your organization – will help you find, retain and leverage A-players. Mike shared three quick tests to help you decide whether something is truly a core value:
- Are you committed to firing someone who blatantly, and continually, violates the core value?
- Are you willing to take a financial hit to uphold the core value?
- Is the core value alive within your organization today? Can you tell recent stories describing how an individual lived the core value?
Answers to these questions can help you establish your organization’s core values. Then use core values to hire – and to fire. “Live your core values – award your team on them,” said Mike.
Sourcing, recruiting and hiring A-players needs to be your organization’s most important process. Mike shared these best practices for getting started:
Create a virtual bench. Don’t wait until you have an open position to scramble to find someone to fill it. You’ll likely wind up with someone who is not an A-player, just to have a body to fill the position. Always be recruiting.
Best practice: Hold everyone on your leadership team responsible for calling ten people they know and trust to ask them, “We’re growing and always looking for A-players. Who do you know that I should talk to?” The idea is not to hire them right away; you might not need them now and they might not be looking for a job. The objective is to initiate a relationship so that when a need arises, you’ve got a virtual bench of A-players to call.
Upgrade your employee referral program. Typical employee referral programs pay a bonus to the employee who refers someone who eventually gets hired. These programs don’t work because the dollar amounts – typically between $500 and $2,500 – aren’t enough to change someone’s behavior.
“Dramatically increase the bonus amount and split it in two parts,” Mike recommended. “For example, pay a $10,000 bonus. $5,000 when the employee gets hired and another $5,000 in 12 months if both referrer and new employee are still with the company.”
Create A-player ambassadors. A-players tend to know other A-players and can be your best ambassadors, communicating what is best about working for your company.
Plan for your A-players
When you invest so much time and effort in recruiting and hiring A-players, you must have a plan for retaining them as well. Mike advised asking:
- How can you better leverage their talents?
- How can you give them more responsibility?
- How can you re-recruit them to make sure they stay?
You will also need a plan for your C-players. Usually this plan consists of giving them a short period of time to make performance improvements. If they don’t make it happen, they need to go work for your competition.
We’ve got your back
At KRS CPAs our goal is to make it as easy as possible for you to get the advice and counsel needed, so you can focus on what matters most to you. The KRS Insights Breakfast Series offers timely and relevant information from experts like Mike Goldman, who can help you grow your company successfully.
Visit our Insights page to subscribe to our newsletter and you’ll be notified about upcoming breakfasts plus other KRS news, events and resources.
Mike Goldman, who is also author of the book Performance Breakthrough, offers a free online assessment for business leaders to help them determine if they are focusing on the most important issues for their business. You can also contact Mike at firstname.lastname@example.org or 201.301.2841.