The Genius of Top Notch Talent
Think about the time that you spend working with the bottom 20% – 30% of your workforce. What are you getting back for the time you are spending? What’s your return on investment with that time? If you aren’t getting substantial performance improvement why don’t you let them go? Most business owners tell me that they hold on to marginal talent because are not sure they will get anyone better. They don’t create a big enough pool of qualified candidates and they aren’t being selective enough when they are hiring so the are settling for “good enough” people.
I was thinking about this as I read about one of The Container Store’s “Foundation Principles” called 3=1 in this article by Mike Jagger. He was at a conference and sat next to Garrett Boone, one of the founders of The Container Store where Garret explained the concept:
“Garrett explained to me that 1=3 means that one great person equals three good people. When you have a great employee, you get three times the productivity and can afford to extensively train them, communicate to them and pay them much more than what a competitor could afford to pay. Garrett argued that if you’ve hired appropriately, you could pay your people double what they’d get somewhere else while still keeping the overall payroll numbers consistent with, or lower than, competitors. Dead weight is expensive.”
I was really struck by the truth in this. We can all pick out those top performers in our organization that make the whole place work. What if we held out for the top 5% – 10% of the talent available in every position in the company. We aren’t talking about hiring MBA’s to be your office administrator, but looking for only top notch talent for that office administrator position when it is open.
How does The Container Store do that? If one great person is worth three average people, they can afford to pay double the going rate, provide terrific benefits and training and still come out ahead. Where could you do that? What would it do for your business?
Brad Farris is a small business advisor with Anchor Advisors, Ltd. in Chicago, Il. Since 2001 Anchor Advisors has been helping creative professional firms to grow, by helping them clarify their purpose, get the most from their people, keep their eye on key performance measures, and implement consistent processes. Brad is also the author of The Business Owner’s Champion: 6 Practices to Build your Nerve and your Business.
Brad, this is a valuable lesson for anyone hiring. And it’s completely true. I think about my own staff and who I rely on the most. Those people definitely do the work of three people and I am happy to both compensate and incentivize them. Now we are taking it a step further…we are spending time figuring out what traits those people posess so we can hire for them.
September 8th, 2010 at 4:35 PM[...] This post was mentioned on Twitter by Todd Defren, Gini Dietrich. Gini Dietrich said: Love this post from @blfarris on spending your time with the right employees http://j.mp/9jZ02i [...]
September 8th, 2010 at 4:49 PMBrad,
Yes, in theory.
I do agree with this all but there are many pitfalls along the way …
- to attract “great” you often have to be great
- to hire “great” you have to know what great looks like
- to develop “great” you have to have great development programs
- to retain “great” you have to keep your organization great
The Dunning-Kruger effect is a classic example of what this happens so rarely: http://opinionator.blogs.nytimes.com/2010/06/20/the-anosognosics-dilemma-1/
~kiersten
September 9th, 2010 at 12:56 PMKiersten:
You raise excellent points, in order to attract great we have to be great – we have to set high expectations for ourselves and our existing team. But if we don’t do that what are we worried about? If we don’t want to set higher expectations and perform better, why are we looking for great talent?
As for the Dunning-Kruger effect; the best cure for blind spots is to have a diversity of opinions. We always recommend interviewing with two interviewers to one candidate, so that you get the advantage of multiple vantage points.
Sometimes the decision to keep lower performing talent is a reflection that the manager or owner isn’t willing to be held to that higher standard themselves, but for those that are – I think it’s a great principle.
Thanks for the interaction!
Brad
September 9th, 2010 at 1:53 PMGini:
What tool (or tools) are you using to find those traits and then how are you shaping your recruiting and interviewing in order to get more of the ones you want and less of those that you don’t?
September 9th, 2010 at 1:54 PM