COSTLY MISTAKES THAT DROWN AN ORGANIZATION IN A SEA OF MEDIOCRITY

Talent Wins. If you look at the most admired and successful companies all around the world, those who have found a way to attract and retain the best talent, top the list. Apple was named the most admired company in America in 2022 by Forbes Magazine for the 15th consecutive year due to its “blistering speed of product development.” Berkshire Hathaway has been on the Forbes list of most admired organizations year after year; they are known for buying organizations at a discount and running them extremely efficiently. From Southwest Airlines’ service and efficiency focus to the exceptional brand management of Proctor and Gamble, there are many organizations who share the “Most Admired Company” status based on a myriad of different business concepts and classifications.More importantly, whether selected for product management, exceptional service, investing, or for any other category, these organizations all have one thing in common — they make finding and growing the best talent a top priority. Do you think Apple employs good Product Managers? Of course they do! They are known to have the best Product Managers in the world today! How did they get the talent? They got it by developing it from within or acquiring it from outside of their organization. The bottom line — talent wins. It is not easy to get where these “Most Admired”organizations are, and it is even harder to stay there. There are several costly mistakes that can keep an organization from ever reaching its potential and kill the chance of it ever joining the list of most admired companies.

PAYING BELOW MARKETVALUE FOR TALENT.

We have all heard the phrase, “you get what you pay for.” This has never been truer than when it comes to paying for great talent. When the demand is high for talent and the supply is low, attracting A-Players is difficult. Unless a firm has an unbelievably strong Value Proposition, the candidate pool will likely be filled with those who are unhappy or out of a job, because top talent is often happily employed and making things happen. When you pay below market value for talent, you attract the wrong people, the B- and C-Players. This will force you to make the best decision in your interview process based on some of the worst talent in the marketplace. You may hire the best B- or CPlayer available from the pool you have to choose from, however, they will still be a B- or C-Player. They will still miss performance targets and bring your organization closer to that middle ground of mediocrity. It is critical to find out what compensation it will take to bring the A-Players on board to your organization. Paying market rates ensures you remain competitive in the talent game.

MAINTAINING A LONG ARDUOUS HIRING PROCESS

The purpose of an interview and hiring process is to identify the top potential prospects for a position, interview them to ensure they have the experience, skillsets, and track record that you are looking for, and to SELL the candidates on why they should work for your organization. It is not a contest to see who can make the other blink or trip-up, nor is it an endurance race.
A cautionary tale: We once worked with a Fortune 100 company whose headquarters is located two hours from any major city; this aspect alone made the interview process seem like an Ironman Triathlon. But that was just the beginning. After three telephone interviews with an internal recruiter, one telephone interview with human resources, and another telephone interview with the hiring manager, the candidate was then asked to complete a Caliper test. If the candidate made it through the five telephone interviews and the Caliper test, they were called a few weeks later for a series of personal interviews — where the interviewers actively tried to catch the interviewee messing up. Any little mistake meant dismissal from the hiring process. If the candidate managed to be successful through all of that, they were still not done. The next step required the candidate to spend a day with a psychologist where they took a series of tests and faced a battery of questions including, “How was your relationship with your father?” If that went well and the company decided to extend an offer, the offer had to be approved by the CEO. The total process lasted a whopping two months from start to finish. It goes without saying, this organization struggled to hire anyone and many of their open positions remained open for a year or more. Due to the limited supply of A-Players in the market, the length of the hiring process is a very important
consideration. A good hiring process should last no longer than three weeks — any longer and candidates will leave the process, decide to stay where they are, find other opportunities to pursue, and/or accept other jobs. Make it a priority to keep your hiring process down to 3 weeks or less to ensure you don’t lose the best talent.

LACK OF DEFINED CAREER PATHS

Top performers get promoted. They set career goals mand are focused on overachievement in the areas that they are measured. They are driven by what they need to do to advance to the next level. The primary reason A-Players consider new opportunities is the potential for advancement. They want the ability to develop and grow their experience, skills and knowledge. They are often risk takers and enjoy the challenge a new environment presents.
When the goal is to hire top talent, it is imperative to map out the potential career path available, even if the path is dependent upon many variables. As long as the possibility exists, the position will hold a much higher chance of attracting the caliber of talent desired. This is not only important for hiring, but also for  keeping existing top performers happy with their career growth and your organization.

REFUSING TO HIRE
EXTERNAL AGENCIES OR
HIRING MULTIPLE AGENCIES

Finding and attracting top talent and A-Players is not easy. It’s ironic that despite this fact, many companies continue to think they can accomplish this task independently by not using external recruiting agencies. What this does, however, is place the burden on internal HR and recruiters to rely strictly on referrals, ads, and job boards for sourcing talent. When this happens, the chances of filling any position with an A-Player become extremely slim. Referrals are great but are very limited in volume. Current employees may be enticed to share names of prospects to collect the bonus, but a name is only the beginning. Someone will still have to call the referrals to qualify them and to get them interested in the position and the company. This in and of itself can be a daunting task, as it is a common practice today for many people to not return phone calls. It is becoming common knowledge that A-Players are not looking at or responding to job ads, nor do they have their resumes posted on job boards. They cannot be located by a keyword search. Why? The answer is quite simple — most are happily employed, knocking the cover off the ball, and overachieving with one of your competitors. They don’t have the time or desire to look at job boards or ads because they are NOT looking for a job. This leaves the B- and C-Players who have their resumes posted and are actively searching the job boards to answer your ads and apply for your jobs. Many of the candidates in this arena have been downsized from their positions due to lack of performance or their job was expendable. The process of posting ads and searching job boards will yield results, but the results will be the best available candidates from the worst talent pool. The only thing worse than not using outside agencies to find A-Players, is to use as many recruiting agencies as you can on the same search. This creates a non-exclusive, contingency search environment, and to the executive search firms who participate, this means the Indy 500. The search parameters change from “How do we find you the best talent in the market?” to “How quickly can we fill this search to beat the competition?” Searches of this nature are a race, and it becomes about the speed rather than the quality of talent. The initial results will yield a large number of candidates to choose from, the majority however will be job board and database candidates. Again, typically not the A-Players that perform at the top 10% of the spectrum. When multiple firms are competing in a race, 9 times out of 10, it will lead to making the best choice out of the worst talent available in the market. Do you really want to start those engines? Companies who excel in the art of talent acquisition understand that using the right executive recruiter or search firm is not a cost-prohibitive transaction, it is an investment. By engaging an experienced resource to deliver top talent, the A-Players who will outperform the competition, companies gain a strategic advantage, allowing them the best choice from the absolute best talent available. A decision in the long run, that results in an exponential ROI!

CEASE INTERVIEWING
WHEN ALL POSITIONS HAVE BEEN FILLED

It is normal for organizations to cease all talent acquisition activities once current open positions have been filled. However, that is not a good idea. As the unemployment rate continues to drop, the shortage of good talent will only get worse. If a company adopts the principle of only hiring the best talent in the market, the time-to-fill (TTF) metric will continue to grow as the talent pool narrows and the A-Players become more difficult to find. Open positions for periods of 6 to 12 months will become common. The cost of an open position can often be astronomical and may impede the achievement of company initiatives. How do we combat this problem? Never stop interviewing. There are limited A-Players in the marketplace, and no one has a crystal ball that can tell you when they’ll be ready to make a change. Life happens, acquisitions take place, project funding changes or a new CEO can come on board bringing their own team with them. Whatever the situation may be to cause an A-Player to consider another employment opportunity, it is critical for a company in today’s market to be prepared and open to interviewing them, whether a position is currently available or not. By simply eliminating the phrase and the mindset that “We have no openings” and replacing it with the mantra “We can always make an opening for an A Player,” the potential for maximizing your talent base and growth increase tenfold.

TOLERATING
LOW PERFORMERS 

Jack Welch, past CEO of GE and one of the top
CEOs of all time, made a policy each year of letting the bottom 10% of performers go in every division. The idea was to replace them with A-Players, thus continually building his organization with an influx of strong new talent. It’s great to have a wonderful culture in an organization where everyone is happy and there is no goal pressure but allowing individuals to miss performance targets year after year has tremendous consequences. It conditions the company and the employees to accept and tolerate below level behavior and drowns the organization in a sea of mediocrity. No matter how good your product or service is, without great talent, your organization can’t compete. Bill Gates of Microsoft summed it up  succinctly: “Take away my 20 best people, and virtually overnight, Microsoft becomes a mediocre company.” Poor performance management and lack of employee development and accountability can degrade the talent management process and drive A Players away from the organization. For those companies who truly seek to be at the top of  their game, it is critical to set minimum standards of expectation for performance at all levels of the organization and to consistently monitor and evaluate behavior based on the criteria once established.“ Steve Jobs of Apple, stated in an interview with Walter Isaacson, “I realized that A-Players like to work with A- Players, they just didn’t like working with C-Players.”
Do not become tolerant of sub-par performance and risk losing your top producers. When employees fall below the minimum acceptable level, give them an opportunity to make up the difference. If they are not willing or unable to do that, then tough management decisions need to be made.

LACK OF TRAINING
AND DEVELOPMENT

Leadership and training are critical to A-Players. They know their value and they expect to advance and grow within the organization. Management guru, Peter Drucker, developed the concept of a knowledge worker in 1959. Drucker was one of the first to predict major changes in society based on this idea. He saw the shift of business and the economy away from success in manufacturing or the ability to
make products to success from the ability to generate and use knowledge. When companies equipped employees with information through training, development and education, they then could make better decisions which allowed them to perform better, and thus the organization would grow. You can bet that the most admired companies on Forbes’ list have extensive training and development plans for every employee that not only focus on what they can do to improve their performance, but also to help them with their future career goals within the organization. Educated employees tend to take responsibility for their productivity. They are innovative and often manage themselves. A study on talent in 2009 found when comparing organizations with high quality development programs against those that did not, the median revenue per employee was doubled. This is a clear indication that employee training programs can actually pay for themselves.

“What’s worse than training your employees and losing them? Not training them and keeping them.”
— Zig Ziglar

ABSENCE OF A
PERFORMANCE
MANAGEMENT SYSTEM 

Business intelligence is the new buzzword in corporate America. You can’t read the Wall Street Journal or any other business publication for that matter without hearing about KPI’s, ratios and dashboards. Today is the age of information. Technology has created an environment where unbelievable amounts of data and information can be retrieved at the click of a button. Why would we not take advantage of this opportunity to evaluate and
refine performance based on trends and insight that we now have at our fingertips? This detailed level of information is called Business Intelligence and allows us the ability to do just that, revolutionizing performance management capabilities overnight. A good business intelligence system allows a company to set clearly defined goals, track activity metrics and results in a concise and timely format and provides the ability to evaluate the data effectively. More important, however, is the capability of the system to present the information in a way that it can be easily read, and problem areas diagnosed quickly. The underlying value of any performance management tool is that it can pinpoint specific areas of deficiency to performance targets – allowing the employee to receive targeted training and coaching to improve performance and maximize potential. A secondary benefit of a good BI system is that it also shares the positive achievement of the participants by identifying areas where performance exceeds
expectations, giving opportunities for recognition. Adopting a performance management system is no longer a luxury. It is a necessity for an y company who wants to achieve success in today’s competitive market.
In a recent study from the MIT Sloan Management Review and IBM, they surveyed over 3000 top performing companies in 100 different countries. Among the key results of study were that top performing organizations use business analytics and business intelligence five times more than lower performing organizations. We advocate for establishing a culture of performance based on metrics. As a manager, the best asset of a good performance management system is that it puts the focus back on individual accountability and individual performance to goal. Don’t let the competition leave you behind. Invest in a good  business intelligence system for your firm and get the insight you need to grow your business.