Periodically, you read something that shakes the foundation of what you’ve come to believe. This is exactly what happened when I recently read Good to Great: Why Some Companies Make the Leap…and Others Don’t by Jim Collins. Reading it will make you think very differently about what defines great staffing and what you’re trying to accomplish. “The old adage ‘People are your most important asset’ turns out to be wrong. People are not your most important asset. The right people are.” It is with this simple opening shot that the book delves into what it takes to turn a company from good or mediocre to enduring greatness. Over a five-year period, Collins and his team of researchers meticulously analyzed decades of business history, looking for the identifying characteristics of eleven companies that over 15-year periods beat the market by an average of seven-to-one. What was it that catapulted these companies far beyond their closest competitors? Was it a function of market conditions? Was it innovation? Did radical restructuring play a role? Was it technology? As you’ve probably already guessed, the answer was none of the above; the answer was great talent. And in order to be great, some of our most closely held assumptions about staffing need to be challenged. Great Leadership Executive recruiters take note: The era of the celebrity CEO may be over, according to Collins:
We were surprised, shocked really, to discover the type of leadership required for turning a good company into a great one. Compared to high-profile leaders with big personalities who make headlines and become celebrities, the good-to-great leaders seem to have come from Mars. Self-effacing, quiet, reserved, even shy ó these leaders are a paradoxical blend of personal humility and professional will. They are more like Lincoln and Socrates than Patton or Caesar.
Collins describes five levels of leadership, in which the very top level (Level 5 Leadership) ó the level which drives the greatest sustained results ó is not the highly visible Lee Iacocca or Jack Welch CEO we usually associate with greatness. While highly ambitious, Level 5 leaders sacrifice their own profiles and channel their energies into ambition for their organizations. They blend humility and modesty instead of personal flair, often deflecting any talk of their own responsibility for the company’s success and instead pointing to their great teams, market conditions, or even dumb luck. For a great example of this phenomenon, go back in time to 1981, when a young Jack Welch took over at General Electric. Another CEO (Alan Wurtzel) was just getting an electronics superstore off the ground called Circuit City. In a case of Colombo vs. Sherlock Holmes, Colombo wins hands down. If you had invested a dollar then with Wurtzel, you’d be six times richer than you would have been with Welch. Most importantly, Level 5 CEOs set up their organizations for continued success after they leave. There is less likely to be a crash associated with the loss of a dominant or defining personality. They also do a much better job of surrounding themselves with future leaders, whereas good or mediocre companies often followed a “genius with a thousand helpers” model. First Who, Then What Which leads to the next and potentially most important finding by Collins’ team: how to build a great team. The answer defies almost every process, structure, and technology built into the staffing function today:
The executives who ignited the transformations from good to great did not first figure out where to drive the bus and then get people to take it there. No, they first got the right people on the bus (and the wrong people off the bus) and then figured out where to drive it.
Many of the good-to-great companies did not take a requisition-driven approach to finding the best people; instead, they attempted to “inject an endless stream of talent” into their organizations, sometimes without a job in mind. As former Wells Fargo CEO Dick Cooley stated, “That’s how you build the future. If I’m not smart enough to see the changes coming, they will. And they’ll be flexible enough to deal with them.” The concept of the “opportunity hire” seems lost in this age of assessment testing, skills-based profiles and pre-screening. A key part of the “get the right people on the bus” approach is not selling a set vision to potential candidates. It’s getting people to join because of the other people who are on the bus ó and getting them to solve the challenges on the road ahead. Good-to-Great Staffing Great staffing might be a much different endeavor from what many of us have come to believe. The following lessons from Good to Great seem to undermine our fundamental assumptions about great staffing strategies, execution and measurement:
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- Low costs-per-hire, time-to-fill, and staffing efficiency are not the hallmarks of great staffing. Of the great talent principles Collins uncovers, he leads with, “When in doubt, don’t hire. Keep looking. No company can grow revenues consistently faster than its ability to get enough of the right people to implement that growth and still become a great company.” If this is true, than our traditional and most commonly measured statistics are actually a detriment to great staffing efforts. All eleven of the great companies profiled in the book, including Circuit City, Gillette, and Kimberly Clark, actively embraced this principal, deciding to wait to find the best person before filling even their most critical openings.
- The best people are worth digging for. One of the good-to-great CEOs highlighted the fact that he spent 80% of his time finding the right people and ensuring they were in the best roles for them. Meanwhile, his main competitor (which started off on equal footing) spent most of its time determining which stores to buy versus which people to hire or keep. These days you can outsource or technology-enable the administrative paperwork, interview scheduling, and sorting resumes that dominate high-volume hiring. Unfortunately, in most companies I’ve worked with, a large majority of time in the staffing function (75%) is spent on administration and sorting.
- Not all turnover is bad. The early days of nearly every good-to-great transformation was characterized by high initial turnover, which really represented the wrong people getting off the bus before it left the station. According to Collins, “People either stayed on the bus for a long time, or got off in a hurry. In other words, the good-to-great companies did not churn more, they churned better.”
- The right person is not always the person you expect. Whether someone is the right person “has more to do with character traits and innate capabilities than with specific knowledge, background, and skills,” according to Collins. He highlights several examples in which star employees with no previous experience in a specific area were assigned to critical opportunities ó and ran circles around the people who had much more “relevant” experience. The best people often don’t fit into a “you-must-have-10-years-of-widget-making-experience” box, and in most staffing departments the next Bill Gates is likely to slip past the goalie and be gone before you realize it. It takes a focused effort to ensure that these people don’t slip through the cracks ó regardless of which channel they come from.
Which begs the question, “what are we screening for?” Not every company can be or even aspires to be great. But truly great staffing means thinking about how to get the absolute best people on the bus. It means occasionally hiring someone great who isn’t an exact fit for one of your current openings. It means mining your relationships in search of great people, not just great resumes. And it requires a radical focus on measuring and improving quality. Good to Great is a must-read for any staffing professional who aspires to greatness.