Recruiting B Players

We all want the best available talent, but of course we’re not alone. As the market for great talent intensifies, some of the best recruiters will realize that there’s often a place for B players in their talent strategies. Identifying and exploiting these untapped talent pools can make your business a dominant force in your industry.

The Ultimate B Player Talent Strategy: The Oakland Athletics

It has been said that “one person’s trash is another person’s treasure.” Michael Lewis’ Moneyball: The Art of Winning an Unfair Game is a perfect testament to this. Even if you’re not a baseball fan, this is an amazing story with valuable lessons for anyone in talent management. In his best-selling book, Lewis documents the practices of Major League Baseball’s Oakland Athletics, who with a $45 million payroll have stayed competitive against the league’s richest teams, some of whom outspend them by a 4-to-1 or even 5-to-1 margin. To illustrate this, here’s a side-by-side comparison of the A’s (who spend an average of $55 million or less per year on payroll, making them one of the lowest-spending teams in the majors) versus the New York Yankees’ (whose payroll is now over $200 million per year, the highest in the league) regular season records over the last six years:

Year New York Yankees record Oakland A’s record
2000 87-74 91-71
2001 95-65 102-60
2002 103-58 103-59
2003 101-61 96-66
2004 101-61 91-71
2005 95-67 88-74
Total Record (2000-2005): 582-386 571-401

In baseball as in life, money can’t buy you (or George Steinbrenner) happiness. The additional $150 million per year has bought the Yankees less than two wins per season, although the Yankees did win a World Series in 2000. Nevertheless, this is nothing short of remarkable considering how little the A’s spend on their payroll.

How have the A’s done this? By approaching baseball’s talent pool like one would approach an economic marketplace. In the A’s view of the talent marketplace, there are bargains to be had in the players that few other teams covet. Most teams try to find the “five-tool” players – individuals with a combination of speed, power, hitting for average, strong throwing arms, and fielding – and pay a premium for players who have the potential to develop all of these skills. The conventional wisdom to identify five-tool players is to look at statistics such as stolen bases, home runs, average, and fielding percentage. The net effect of this approach is that teams often overpay to get great players (i.e., Alex Rodriguez’s $250 million contract). Meanwhile, the Oakland A’s are looking for entirely different types of individuals. The A’s roster is primarily made up of slow (sometimes even pudgy) players who can get on base a lot. One of the key statistics they look at is a high number of walks, which they covet based on the premise that statistically, what’s really important isn’t necessarily that you get a hit, but rather it’s that you get on base, even if you do it by walking. Until recently, no other teams cared much for this skill (walking).

It is rare that the A’s overpay for a player because the market for the players they seek is relatively soft. There are some interesting parallels to the recruiting industry in this analogy. One parallel is the conflict between the baseball purists and traditionalists versus the new, data-driven upstarts. Just like the generation of metrics-focused general managers that the A’s Billy Beane has spawned, there’s a wave of new metrics in recruiting that defy the conventional wisdom that recruiting can only be measured as a cost center with soft returns. Another parallel I see here is how the A’s look at the market for talent a bit differently than its competitors. In effect, while the Yankees look for the elusive and expensive Harvard MBAs with the coveted packaged goods background, the A’s may have a few of those on their roster but are also looking for non-traditional or other consulting backgrounds from B schools to round out the team. In the A’s talent marketplace, talent is considerably less expensive, less competitive, and easier to find because of this approach.

The Ultimate B Player Talent Strategy, Part II: Enterprise Rent-A-Car

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Enterprise Rent-A-Car is the college talent market’s version of the Oakland A’s. Much like the A’s, Enterprise has identified opportunities to target talent that other teams usually ignore. And just as the A’s look at a different set of statistics (on-base percentage versus batting average), Enterprise looks at different performance indicators – it’s your attitude and presence more than your GPA that will get you the job. Its innovative strategy starts with where and how it recruits. You won’t often see a big presence from the Enterprise college-recruiting team at an Ivy League school.

If you’re the valedictorian of your class, you probably have better initial options than a career starting behind the rental counter (to be fair, there are other jobs at Enterprise that might suit you). But, if you didn’t attend an elite school or have a perfect GPA, Enterprise provides viable career options, including the opportunity to run effectively your own business and share in the profits with a multibillion-dollar company behind you.

Another important part of the strategy is its employment-value proposition (something Enterprise’s Marie Artim talked about in the June Journal). Enterprise’s management training program and pay-for-performance models are exactly what its target audience wants in a first job (research is a powerful tool here). They combine to give the company an enormous edge for B players in an industry littered with C and D players. By focusing on talent that other companies overlook and by providing a compelling employment-value proposition, Enterprise has raised the bar on the types of individuals who work in the rental car industry (which is one reason why I won’t rent a car from anyone but Enterprise). It’s no wonder why it’s the largest rental car company in North America. Designing a “Blue Ocean” Talent Strategy

While you’re buying Moneyball, I also suggest you purchase Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant by W. Chan Kim and Ren?e Mauborgne. One of my key takeaways from this book is that it’s often better to swim for the “blue ocean” of unexplored market spaces than it is to swim in the shark-infested “red oceans” with all of your competitors. In the talent market, most attempts at workforce and talent planning are red-ocean strategies. They are focused on reacting to the future business needs of the company and the headcount needed to support them. With this type of limited forecasting model, you’re bound to end up competing for the same scarce skillsets as hundreds of other companies. A disruptive talent strategy will also look at the supply and demand economics of the talent marketplace and identify places where better or lower-tier talent can be inserted into the mix and the risks and rewards for doing so. It will identify the places where no one else looks for talent, and leverage the resources unique to your organization. This often requires developing rather than purchasing talent, and should absolutely defy some of our conventional wisdom of just targeting A players.

Dave Lefkow is currently the CEO of talentspark (www.talentsparkconsulting.com), a consulting firm that helps companies use technology to gain a competitive advantage for talent, and a regular contributor to ERE on human capital, technology, and branding related subjects. He is also an international speaker on human capital trends and best practices, having spoken in countries as close as Canada and as far away as Malaysia and Australia. His consulting work has spanned a wide variety of industries and recruiting challenges with companies like Starbucks, Boeing, HP, Microsoft, Expedia, Washington Mutual, Nike and Swedish Medical Center.

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12 Comments on “Recruiting B Players

  1. I like this article and I think it pretty much applies to all teams in life. There are spots for people who don’t necessarily fit into the ‘cookie cutter’ idea of ‘top talent.’

    UNIQUE talent that fits together to become a intellgent and forward moving team within your organization can be just as effective. I think that too often, hiring authorities get wrapped up in this ‘A game’ and boot out B players who can be valuable pieces.

  2. Great article, Dave. Thought provoking.

    I have a different perspective on what you are calling ‘B Players.’ The Oakland A’s and Enterprise Rent-A-Car define talent differently than their competitors. I think their goal is still to hire the best, the ‘A Players,’ it’s just that their definition of an A Player is different. They excel because they have a different perspective, based on research, about what it takes to be a successful, or star, employee in their organizations.

    I’m not sure they are settling for second-best at all, and their business success actually seems to show that they are, in fact, getting a lot of high quality players onto their teams.

    Bill

  3. I applaud David?s article. A great read and very thought provoking to me. I?ve seen firsthand how many of my company?s ?superstars? were exactly those only considered ?B? players by most other organizations. To us, they are ?A?s?.

  4. Thanks for the comments Bill.

    I did not mean to imply that Enterprise – or the A’s -are settling for second best. They just have different definitions of what makes an employee great and how to build effective teams. I use the term ‘B player’ to describe how other teams might view their players.

  5. A-player based on pedigree is different than A-player based on core competencies. The latter reads like a B-player but is ripe for plucking. Some people simply blossom later in their careers.

    I would never hire anyone I thought was less than an A-player simply based on competencies and potential. If they haven’t yet realized that potential (cough, cough…sorry for using our brand statement), that’s fine (though sometimes challenging to convince the hiring managers). I LOVE the idea of helping them reach that place at my company. B-player experience is just fine by me, especially if they are early in their career and convince me that they are capable of more and know how to get stuff done.

    Without the so-called ‘B-players’, who would the ‘A-players’ be leading? All of the pedigree MBAs that come in stating that they want to work on ‘strategy’ (let’s hear it for execution, folks…it’s where the rubber meets the road and we all have to do some of it…I’m personally OK walking to first base) or ‘own a P&L’…it makes my eyeballs roll to the back of my head.

    There’s lots of room for A-players, but the proof is in the pudding. Everyone who comes in the door has the opportunity to be A-B-C or D players.

    Great article, Dave.

  6. DL-

    According to Forbes, the NYY had a 2005 value of $950M, revenues of $264M; the OAK, a value of $185M, $116M revenues – and carried a greater debt to value load. In 2000, the NYY franchise was valued at $548M, OAK at $134M.

    Now which franchise realized a more impressive business performance?

  7. Thanks Steve – I wondered if someone would say that as I was writing this article. Definitely something I wrestled with a bit. Here’s the conclusion I came to:

    I would say that the measure of the success of a general manager is in putting the best team on the field. beyond that, NY is obviously the beneficiary of a better location and bigger market opportunity than Oakland – and there’s not much else Oakland can do but put the best team they can field out there. Imagine how little attendance they would get if they had a horrible team and how little they would be worth. In all, I think they’ve maximized their market opportunity, even though in dollars and cents, NY will always come out on top.

    Enterprise has also maximized their market opportunity – which can in this case be measured in dollars and cents. They are the biggest and in my opinion the best rental car company in the industry.

  8. This is a rather interesting analogy. From my experience however, there has been a preoccupation with a lot of companies to hire the so called Superstars that have what I call the pedigrees…..MBA, CA.

    I do come across Type B employees and feel strongly they may be in some cases better suited to the company and far motivated to do a great job. I personally to not like have to professional deal with Type A candidates because in most cases they are arrogant and feel they are entitled to the job. The question of whether or not they are the best fit is debatable.

    There is certainly a strong proccupation in business to Higher type A players………the companies themselves are vulnerable to low productivity and possibly turnover. Type B players tend to be more reliable and loyal in most cases. We are not certainly here to generalize……..but having the best and the brightest and the smartest employees does not guarantee instant productivity or instant increase of sales revenue. It certainly creates a lot of corporate politics and endless debates amongst the elite employees while the TYPE b are busy doing the job.

  9. I agree with the your conclusion on one level; however, it isn’t possible to make the claim that the Oakland franchise would be worth less or have alower attendance figures if they had a lesser team on the field (anyone old enough to remember the 1962 Mets knows this) without conjecture.

    To your point about maximizing the market opportunity, Oakland also has territory issues that have been imposed by MLB. Then again, the Dodger have a value that is less than half the NYY.

    However, here’s where the A/B issue comes to light – could Oakland increase their value if they had different people in marketing? How is it that the Yankees continue to separate themselves from the pack in terms of value despite the restrictions (e.g., revenue sharing) place upon them by MLB? When value increases and debt/value decreases, someone is really performing…

    The lesson here is that (a) measurement will solidify intuition and (b) what is defined as successful requires multiple metrics – some of which may fly in the face of the very intuition.

  10. Great article. My two cents?

    What Billy Beene, the general manager of the A?s, looks at are the ‘behind the scenes’ stats that you don?t find on the sports page. Things like who hits in the clutch, who can draw the most walks, who never commits an error in the last 3 innings, etc.

    The A?s send out their scouts and assign their interns to either go get this info or to sit down and create the metrics for it. So that, in the war room during draft day, the info has been identified and organized and displayed in a manner that ‘business decisions’ can be made?intelligently.

    So?in workforce world?where and how do you get those ‘behind the scenes’ numbers? Or, are you going to just look at the sports page on someone?their resume? Keep in mind the source of that information?the candidate.

    Just think if Barry Bonds got to write his own articles for ESPN. ‘Steroids? What steroids? My head grew 3 sizes naturally.’ – lol

    So getting these numbers today mostly comes down to reference checks which have become legally hard to do. I don?t think your general corporate recruiter would ‘push the policy’ of a company that says, ‘Sorry, we can just give employment dates and if they are eligible for re-hire.’

    During my third party agency days, we could not even submit a resume to a hiring manager unless we had talked to their bosses at 2 of their last 3 employers and got a full review of the candidate. If their company had a ‘no reference’ policy?we called them at home. If we couldn?t get it?we dropped the candidate. If your candidate was good?their former bosses wanted to help them. FYI, I don?t remember any of our placements/contractors getting fired. It was quite the opposite.

    What continually blows my mind today is that in a lot of companies their standard procedure is to do a reference check towards the end of the hiring process and not at the beginning. When I see companies that make offers to candidates that say ‘offer pending reference check,’ my jaw drops. If it comes back negative?wow?think of all the money and time that just got wasted that could have been stopped with a simple 5-10 minute call. The call duration of negative reference checks don?t last very long.

    Anyways?its this deep background information that Moneyball preaches. There are countless tools in the Talent Management Systems (TMS) industry to do this for internal talent (I?m not sure how well any of them work). But, unless you have figured out a way to identity and track work history on external talent, applying the Moneyball techniques to recruiting will prove difficult because the ‘gut feelings’ you get during an hour interview just don?t count.

    Regards,

    Certified Yankee Hater

  11. Like in Lake Wobegone- everyone is above average. One would assume that the majority of available people in the economy are ‘C’ players. If thats the case, it seems like a good idea would be to take ‘C’ players, develop them up to ‘B’ standards, and go to market against ‘A’ players- pocketing the margin difference if the marketplace does not care to pay the existing ‘A’ premium in a given transaction.

    I think we all know that there is good, great, and good enough, and which to select varies by the context.

    I’ve been mulling compensation- and (‘Moneyball’) since Hunter talked about it a few weeks ago- it seems the jury is still quite out on Moneyball- and that there is something unusual happening right now in the way people are getting paid.

    A subjct for a future blog post….

    Great subject Dave- but dont try to sell this to Wendell Williams !

  12. While I appreciate Sean’s comments regarding conducting references at the end of a recruiting cycle, please consider the bandwidth issue that corporate recruiters have. Contacting references is not simply a ‘5-10 minute phone call.’ We all know that a phone call that we think will be 5 minutes turns into 30 or 40–especially if you are digging for crucial information. And how about if we want to recruit that reference? If we contacted ALL the references for ALL the candidates we’re considering before we reach an interview or offer stage, consider how much time that takes. As a corporate recruiter, time is of the essence–particularly with the constant disruptions, sporatic fires, and reporting of metrics that needs to be generated–issues I don’t recall occurring when I was on the contingency side. Also, if you are with a company that conducts formal background checks, it makes sense to contact the references at that stage. A lot of candidates prefer that you NOT contact their references until you are further in the process because their references may already be inundated by calls as it is. And who really gives a bad reference?

    As far as A players are concerned, do we really consider someone to be an A player because they had the high LSAT or GMAT score that allowed them to get into a ‘top’ grad school over the individual who is equally as accomplished in terms of academics and professional experience? Do we want a stepford community or a diversified workforce?

    In any event, I love this article–and not just because I’m an Oakland A’s fan and found Moneyball to be fascinating! After all, the true fans are all about the game, not the money the sport generates.

    I also respect Enterprise. It was the first company that I knew of that valued college graduates with a humanities education (being able to think, write, and speak effectively are underrated skills and are often more important than being an excel monkey or coder).

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