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Business Strategy

Chapter 5 of Building A High Performing Team on Purpose – Your Talent Management

This is part five of the eBook, Building a High Performing Team on Purpose.


Talent Management: Hire and promote candidates based on competencies that support delivering your business strategy

“Excellent” said Mr Burns, pushing the buttons on his imaginary flute with both hands.  Seated at his desk he looked up towards Smithers, instructing his trusted assistant to go out and swoop up all the outstanding talent who had lost their jobs during the COVID-19 crisis.  Smithers gave his typical groan when he knew his boss had given him an impossible task that he had to find a way to work.  Wayland moved to protest to Monty, only to find himself directed to the doorway with a loud “NOW!”  

Besides the fact that no one actually wants to work for Mr. Burns, the groan of Smithers is due to the insight that there is not actually the treasure trove of talent that is assumed to be out there.  What he can count on is the sea of resumes that will crash through his inbox, requiring a lot of work to sift through.  It’s not going to be that easy to find great talent.  They will probably end up re-hiring Homer.


The resume of a poor performer sometimes looks very similar to that of a high performer

Have you ever heard this saying? 

“Nobody got fired for buying IBM!” 

This phrase became famous several decades ago and represents the “safe bet” of choosing computers, much like why no large corporation chooses anyone but a Big Four accounting firm to conduct their audit.  If you choose the safe bet and it doesn’t work out, well you are not to blame and were just plain unlucky, weren’t you?

If you’re a business owner or leader in charge of your own fate, you don’t need to live by this mantra.   There is no butt-covering required and so you are in the box seat to avoid following what everyone else is doing.  I have a feeling you knew this already.  So then why does this candidate profile often ring true?


  • Industry experience  – “our industry is very different and so you need to know who is who and the terminology”.
  • Systems knowledge – “our system can be difficult to navigate and our training is not up to scratch yet”
  • Good references – “Their past employers thought they were good”


In Chapter 3: Your Organisational Design,  I mentioned that managers often focus on “crystallised intelligence” (what a person knows right now, such as the capital of Switzerland), rather than “fluid intelligence” (the ability to seek out and absorb new knowledge) when defining what they are looking for.  This is often due to managers being time poor, or in my language I view that as being energy poor.  They just want someone to come in ready made to “hit the ground running.”  

Sometimes, it is necessary to prioritise crystallised intelligence if there is none that exists in the company or to balance up an inexperienced team.  Also, you sometimes need some crystallised knowledge as a ticket to play regardless of how talented someone is.  It’s just that the requirement is too often overstated and it is not a source of competitive advantage to do so continually as it only catches you up in the short term.  If this is your approach it may mean that you are not organised with your workforce planning and/or your staff turnover is too high.  


Constantly chasing your tail is not how you hire for a high performing team on purpose.

But wait… if a finance person has no idea about Microsoft Excel, that rings alarm bells for me!  In some cases, systems knowledge is more important as an indicator, rather than the specific skill itself (albeit the skills also being useful).  Using this example of Microsoft Excel, if in a finance position, all a candidate knows how to do is SUM, then this is possibly an indication they haven’t really explored its power.  

They don’t need to know how to do a combination IF(AND(OR… statement specifically, you just need to be someone curious and smart enough to figure it out.  It’s a possible indicator of analytical thinking and learning curiosity.  You want to know their natural energy goes towards the important parts of the role.  Hiring for a system specifically (often people think of their ERP) will severely limit the talent pool you can choose from and the most capable people will surpass most others in 6 months anyway.

Another common mistake is to overly prioritise existing industry and product knowledge.  This might help in the short term because the manager doesn’t need to put in much effort to train them.  But this crystallised knowledge is less valuable than learning agility and influencing ability.  There will be many people who have bounced around the industry as sales people and know a lot of terms and technical jargon, but lack the ability to have a proper conversation with a business owner or to learn new products that are required to remain competitive in the market.  The manager may also assume that the industry person knows a bunch of things that they actually don’t, until they find out two years later when the sales results are not there.

Nearly every industry has a challenger brand or one that is looking to deliver a premium product or service to the market.  If this doesn’t exist, there is probably a replacement industry on its way to disrupt the entire market.  Businesses that are looking to build and maintain a competitive advantage, but are stuck in these old ways of looking at prospective employees are missing a golden opportunity.  To amplify how much this is going to become even more important, in a recent World Economic Forum study, they predicted that 54% of employees will require re-skilling and re-training by 2022.


So why are people still hiring on criteria that does not correlate with high performance?  The most common reasons are:

  • Having a short-term view and wanting to just fill a gap
  • A lack of interest in spending time on training and development
  • Missing knowledge on what actually drives performance (even if intuitively it is known)
  • Never having experienced what it is like to hire a true high performer on purpose
  • Because everybody else uses the same criteria

I find that small-medium business owners and leaders are best placed to come to the realisation that hiring based on the resume and references is fraught with danger.  It usually takes a few poor performers for the realisation to set in that there must be a better way.  They are the ones that experience immense pain, due to negative impact on performance, the toxicity of culture and the increased workload and stress for that leader.  


Exercise

Let’s look at a position in your company that you might want to hire for in the future.  I will use an example of a Sales Manager for illustrative purposes (the list won’t be exhaustive).  Write down a list of what you would see from a high performer versus a low performer.

  1. List the things that a high performer does
  • Develops, clarifies and gains buy in for the sales strategy across the executive team
  • Hires sales people based off talent for sales, their attitude and aptitude
  • Work with those not suited to sales or the company to move to a different job
  • Invests in their own personal learning and development, particularly leadership and management
  • Spends time out on the road with the sales team, providing feedback and coaching
  • Makes the right judgement call as to when to step in and when to let a sales person make their own mistakes
  • Work collaboratively with operations and other important internal stakeholders to align their priorities 
  1. What would a poor performer be doing?
  • Spend too much time selling directly themselves
  • Justify to the executive team that the reason targets are not hit are due to poor sales staff
  • Complain about operations, finance, pricing, the market, customers
  • Avoid having difficult conversations with people until it gets to breaking point and then create an environment of fear through constant ultimatums
  • Spend little time coaching and developing their staff
  • Solve problems for customers and then throw their team under the bus
  • Say yes to everyone, including the sales team, customers, suppliers, internal stakeholders

Whether you agree with this list or not isn’t the main point here and each situation will of course be different and so the specific context would change the priorities.  Most would agree that the first list is significantly better than the second list.  But what do you notice?  These are all behaviours that you can observe.  Each list of high performers or low performers could apply to someone from the industry, or outside of the industry. 


Hiring for talent and mindset means leveraging the natural energy of people

It’s better to leverage the natural energy of the person than to fight against it.  Issues are presented if you are constantly using your own energy to try and push this person in the direction you want.  When you give an employee your energy, whether that be effort to help them learn, providing them insight into priorities or to set up the right relationships – you want them to take this and build on it.  You don’t want your energy to just be lost.  This is why so many business owners and leaders are exhausted by their people.  They are expending so much energy on their people and getting very little in return.

If I were to say to hire based on things like talent, attitude and learning agility, well that would make sense right?  Most people would be nodding their heads to that and then say “Yeah, but right now we just need experience.  We don’t have the luxury to do that at the moment.”  Besides the cost of getting it wrong, one bad experienced hire will set you back 6-12 months or even longer.  All the while the person who has the right mindset, who furthers the right positive culture in your company and whose natural behaviours perfectly suit the role could have been learning your business.

The issue with poor performers is that it is never the issue that a manager says that they have an issue with this person due to their current lack of knowledge.  Assuming the issue is not due to the manager’s inability to lead and develop this person, the issue with the employee’s performance is nearly always due to one of the following:

  • The work they are meant to be focusing on is not what they are focusing on.   They seem to find time for tasks that are less important and will justify why they don’t have time for the most valuable activities from the manager or business’s perspective
  • Their attitude towards work is about what they can take from the company, not what they can give
  • Their attitude towards other people rubs them up the wrong way or they are toxic for the culture
  • They are not learning things fast enough, having the repeatedly ask the same question and then still get it wrong

Some of you might be thinking, “So, you want me to hire young and inexperienced people all the time?”  No, that’s not the message.  It’s about the fact that people prioritise the wrong things and so there is a need to push one message to balance the ledger.  

However, to answer this concern more specifically, let’s break down experience for a moment.  The problem with experience (and in particular years of experience) is that it is not specific enough.  One year in Company A working for Manager A may be significantly more valuable than five years in Company B working for Manager B.  Even within Company A and Manager A, Employee 1 took every opportunity to learn and apply what they learnt, whilst Employee 2 sat back and didn’t take in anything.  If Manager A was a great teacher and coach, but not great at moving on poor performers then both Employee 1 and Employee 2 could have similar looking resumes.  

It’s important to know that hiring for talent doesn’t simply mean hiring young people, as sometimes people mistakenly think. The assumption that a young person will be keen and open to learning is not always true.  The strategy to hire for talent works just as well when looking at a fifty-year-old who may bring transferable skills and abilities with a greater thirst for learning than some twenty-year-olds.  The message is that it is about the person, not the piece of paper of where they have been.


Be enlightened enough to know that you are not a genius people-reader

“I’m a great judge of character.”   Said no one who understands confirmation bias.

Some of you may have read an article I wrote a while back on confirmation bias.  In particular, the example of the guy in the red jumper stood out for a lot of people.  The story goes like this…you are arriving at a party and your friend is leaving. You ask how the party is that they say, “Great! Except avoid the guy in the red jumper.” You enter the party and then later on notice the guy in the red jumper. He looks like a creep and you avoid him.

Now change that around and when your friend leaves, they say to you “Great! Make sure you speak with the guy in the red shirt, he’s eccentric but such an interesting and lovely person.” When you see him at the party you are instantly drawn to talk to him. Same guy, different outcome. 

As human beings we hate uncertainty.  The unsettling feeling this gives compels us to find an answer that we can tell ourselves is the right one.  During a hiring process, this is constantly happening with hiring managers.  The first look at the resume.  The first meeting with that person.  Whether you feel positively or negatively about that person you will start to look for reasons why they are right or why they are wrong.  

Confirmation bias is just one of many biases that exist during a hiring process.  When people present a certain way that reminds us of ourselves or someone else we like, we instantly feel good about that person and are more likely to hire them.  Just remember, knowing all of your mates, not all of them would be the best employee, or if they would be, they would certainly not be right for every role you might have.  

Conformity bias is when there are multiple people in a selection process and the majority of people or perhaps the most powerful person gives a view on a candidate.  Once that view is out there, everyone else falls into line and ignores the observations they had that contradict that person’s view.

There is one last bias I will mention which is comparison bias, which results in hiring the best from a bad bunch or missing out on that right person. That is, human beings love the number three for some reason.  Three blind mice, Neapolitan Chocolate and Gold, Silver Bronze.  There seems to be a rule of three that exists in hiring that is we need three candidates to compare and to pick the best from that shortlist.  What if all three are wrong?  What if you only see one person and they are right and you lose them to another company because you were waiting for another two to compare them to.

I could go on as there are at least ten different types of biases that are swaying you towards hiring a poor performer.  Step one is to be aware of them and admit you are not immune.  This will lead you to… 


Use a robust selection process and multiple objective assessments

“Our hiring process has worked for us before.   It’s just that you can never really know.”

Well, even a broken clock is right twice a day.

The assessments that exist today that will help you make a more accurate decision to hire have been around for a long time.  However, the uptake of using those assessments is still relatively low when compared to how many people are hired, particularly in small-medium businesses.  

To make things clear, I need to tell you that I have interviewed thousands of people.  I have reviewed the personality profiles and aptitude results in-depth of at least several hundreds of people, if not in the thousands.  These assessments are from a world leading psychometric assessment company, which yes – it does make a difference.  Most importantly, I have been a part of discussions with managers after the person has been hired to review what actually happened.

I could talk to you about studies that have looked at predictive validity and the strength of aptitude testing, structured behavioural interviews and personality profiles.  Most people I speak with find that direct personal experience is more valuable.  So I will tell you that across the past 20 years that I have a lot of direct data from all the different situations I have seen.  The many success stories of situations where the assessments predicted a high performer have been great.  However, it is perhaps when people have chosen to go against the assessments and instead favour criteria that relates to biases, resumes or simply recruitment fatigue (choosing someone because they want to stop having the recruit) that even more value has been achieved. If I didn’t have people going against the recommendation from time-to-time, then I couldn’t have contrasting data to review. 

So it’s important to use a holistic approach with valid assessments to uncover a more comprehensive view of a person you are potentially bringing onto your payroll.  This is best illustrated by the Venn Diagram below:

Yes, it’s more work and yes, it costs more money.  But if you aren’t convinced that it is worth the effort to hire the right person then you may need more trial and error experiences until you get there.  Seeing what I have seen, I want as many people to stop going through the process of learning from their own mistakes.  The challenge for me to try to get across the message to people that they aren’t a mind reader and that just because they want this candidate to be the right one, it doesn’t make it so.  

We are fighting against human nature here.  What is encouraging though, is that with each business leader we work with who is open to learning new things, who values the right people and has the discipline to apply the right process, that we are slowly seeing a change towards hiring the right people consistently.  This is the most important point around this whole series and for every chapter: When people tell you that you are really lucky to have a high performing team, I want you to think to yourself and to tell them that it was not luck, it was on purpose.


Key take-aways:

  • Challenging the industry with a differentiated strategy requires a different type of workforce, so with a deliberate talent strategy to hire, retain and develop talent that competition is not fishing for can create an inimitable competitive advantage
  • Hiring people more on talent and mindset than on their existing technical knowledge gives you a better chance of building a high performing team
  • In today’s context, knowledge is evolving and roles are changing, so the ability and willingness for employees to learn will be key


Recommended actions:

  • Following the review of your strategy and your organisational and job design, you will have the criteria in which to hire against 
  • Complete forward-looking workforce planning activities to plan out how you will hire for the business ahead of simply replacing exits
  • Hire based off the strategically required competencies, talent, attitude and aptitude
  • Use valid and robust assessments in combination to identify a clear and accurate view of candidates


You can read Chapter 4: Your Leadership here.

Categories
Business Strategy

Building A High Performing Team On Purpose

building-high-performing-teams


An 8-part self-guided series for small to medium business owners and their leadership teams.


If you believe that your people need to be a source of competitive advantage then this read is for you.

There is often a debate about the greatest of all time in various sports.  

I’ve been watching The Last Dance on Netflix, which has hit number one as the most watched documentary at the moment.  The show chronicles Michael Jordan and the 1998 Chicago Bulls in their quest for winning their third championship in a row and sixth in eight years.

This program has reignited the debate about who is the greatest basketball player of all time, which most people say is still Michael Jordan.  Although in recent times, some had been pushing for LeBron James as the greatest.  The eras were very different though.  The competition was different, the way the game was played was different and the lens was different. 

Take cricket for example.  If we compare eras, David Boon in the 1980s didn’t need to be an athlete to be great, but if he were born in 1990 instead of 1960, we would either not know his name at all or be witnessing a slimmed-down version of Boonie.  In the AFL, the top 10 highest single player, single-game goal scoring records are from 1995 and earlier. This is because the game has moved away from scoring through one full forward. The best performance of the 100m sprint in the entire year across all events in 1985 was Carl Lewis at 9.98 seconds.  He would have come 7th at the 2016 Rio Olympics.  The list can go on…

The debate about who the better player was from different decades will always remain a debate, because you cannot compare eras of sporting greats.  This is simply because people get better and the game changes. It’s not that people wanted to run slower back in the 80s.  It was also not that it was considered a good idea to have a beer gut as a professional cricketer.  It’s that people got away with it because the standards were different.  



How is this relevant to you?

The game you’re in is also changing and your competition is getting better.  The year 2020 seemed like a long way away not that long ago.  You can’t expect to be successful when you are doing what you or your competitors did 30 years ago, 20 or even 10 years ago.  And if your people practices haven’t substantially improved since back then, you will be left behind.  On top of that, the rate of change externally over these past few years has been exponential. Take the Gig Economy, the fourth industrial revolution, the four different generations in the workforce and now this global crisis that has us all working from home – your playing field is starting to look very different.

In some sports, players performing like they did only 5 years ago would see them benched. Similarly, in business and with your people performance, if you play like you did back in 2019, then as we enter into the post-COVID-19 era you could get benched.


You can no longer afford to be left behind if you want to survive this next wave of change and exploit the opportunities presented to move ahead of your competitors.

I’ve had the pleasure of working with business leaders and senior executives structuring, hiring and building high performing teams as a part of their strategy. The businesses I worked with who are challenging their industries or those offering premium products, shared a common belief: the growth of their business and their competitive difference cannot work without their people delivering outcomes aligned to their strategy. 

These are the people who:

  • Consistently produce your desired outcomes towards your strategy.
  • Genuinely and pro-actively display behaviours in support of the company, their own learning and to help their colleagues.
  • Are committed and aligned to the business for the foreseeable future

We call them high-performers.

You’re probably sensing that where I’m heading is that people are a pivotal part of your play in this changing landscape.  But I’m not just talking in the generic sense that you hear all the time like that “people are your greatest asset” or “there is no business without people”.  These statements don’t get to the heart of what you need to do.  Sometimes, some people are your greatest liability.  Sometimes, your business is better off with less people. You cannot have a motherhood statement approach to your people strategy and expect it to deliver a competitive advantage. You need to act with precision. 

This is an 8-part series that’s going to help you navigate the transition back to work after this global crisis, and then rebuild and position your business to win. 

We’ll delve into the prominent questions that are in every business leader’s minds: “we’re returning to work after COVID, now what?”,  “what’s really changed?”,  “what will remain the same?” and others.

I will answer all of the above questions so that you can hopefully avoid the pitfalls and take advantage of the opportunities. 

I’ll also remind you of the three biggest trends influencing humans at work that should not be forgotten, simply because we are dealing with a global pandemic. 

The name of the series, Building a High Performing Team on Purpose, comes from knowing that sometimes a manager of a team or business has an accidental high performing team.  As Carl Sloane from Harvard Business School once said,

One of the biggest mistakes a leader can make is “confusing the size of the enterprise or success of the enterprise with the individual’s persona.

There are managers who inherit an already high performing team, only to fail next time when they haven’t had that head start. There are those who have had fortunate timing resulting in their numbers being inflated.   

The series is about giving you deliberate actions to take that allow you to repeatedly build a high performing team, no matter what the starting position is or how lucky you have been that year.

Every Thursday for the next 8 weeks, we’ll cover one part of the series:

  1. Transitioning after a COVID-19: what are the small, medium and big challenges ahead?
  2. Your Business Strategy: is it still relevant?
  3. Your Organisational Design: is it right to support your strategy?
  4. Your Leadership: are your leaders equipped to deal with the challenges they are about to face?
  5. Your Talent Management: do you have the right talent and are you nurturing them to strive?
  6. Your Learning and Development: how should you invest in your people?
  7. Your Employee Value Proposition: is your EVP compelling and real, in order to attract and retain talent?
  8. And finally, how to bring it all together so that the sum of each part provides greater combined value overall.

I’ll share stories, lessons and offer you guides to help you self-assess your business and how to think through some of the challenges ahead.


Stay tuned.

Categories
Business Strategy

COVID19 restrictions are lifting… what’s next for business owners?

covid19-business-owner-advice

Reflecting on the last couple of months, many of our thinking styles, choices and actions are likely to be the result of intuitive, flash decisions made quickly. It triggered a comparison to the book by Daniel Kahneman, Thinking Fast and Slow. 

The book talks about the conflict between your intuitive, fast brain and the slow, analytical brain. You may currently be experiencing some conflict, what you’re having to do within your business, how you meant to be thinking and what the external forces are doing as well.

This blog draws three ideas from the book, discussing how they relate to business owners thinking about their people and their business in the context of COVID19.

1. Fast brain vs slow brain

This is the crisis management that business owners have been in over the last month or two. You have the intuitive brain thinking, ‘I need to make these fast decisions, make sure that I’m on my toes and making the right call for my business’, whereas many of these decisions require a slower, analytical brain and need a lot of thought behind them.

Decisions around redundancies or standing people down, moving to part time, whether to go onto Jobkeeper… For some businesses, it’s not simple. You’re thinking about whether to use the Jobkeeper enabling directions or not, thinking ‘What’s going on with my staff, how are they feeling? 

These questions are seemingly intuitive decisions, but actually when you stop and consider the implications, they require slower and more analytical consideration. 

The example in Thinking Fast and Slow gives this idea of the bat and the ball. 

The bat and ball cost a dollar and 10 cents together. The bat is $1 more than the ball. Therefore, what does the bat cost and what does the ball cost? The answer, of course, is the bat costs a dollar and the ball costs 10 cents… or does it? 

For many of us who haven’t read the book and who aren’t mathematical geniuses, we will come up with the same result.  However, the difference between a dollar and 10 cents is, of course, 90 cents so that’s not correct. The correct answer is a dollar and five cents. A dollar and five cents for the bat is a dollar more than five cents for the ball.


It’s time to slow down your thinking

Think about the business decisions that you’re making now.

If you use our intuitive brain, you might be coming up with the wrong decision whether to do something or not do something. A question to ask yourself is, do you have space in your calendar, in amongst all of the craziness that’s going on out there, to slow down your brain and to be able to think analytically about some of these really big decisions? 

Whether you decide to do something or not, you need to be able to slow things down amongst the crisis. 


2. The path of least resistance 

The second idea is around cognitive ease. This is when the brain takes the path of least resistance to conserve energy. In the Stone Age, cave men and women would survive better if they were in a familiar environment, which makes sense. 

It’s a similar concept when a new starter joins an organisation. Typically, managers tend to talk at them on their first day. The fact is, the new hire is not taking in anything the manager says.  Giving them important information is a waste of time because they’re taking in the fact that there’s a photocopier by the wall and a coffee machine in the open plan kitchen. 

They’re not listening to you because they’re processing the unfamiliar surroundings. 

However, once they realise that these things are all there and they’re familiar with their environment, then they’re ready for you to talk to them about strategy and their role. 


High value activities for business owners

Similarly for business owners right now, there’s so much information coming your way. Whether it’s the stimulus package announcements from the government and Jobkeeper, or information coming from your business about revenue performance and how your people are feeling. 

Even having more video conference meetings is more tiring than normal meetings because of all the things you need to set up and plan for. It can sap your energy and drain your brain.

You may find yourself doing the equivalent of sitting in the corner doing a crossword puzzle or whatever that looks like in your job because your brain is saying, ‘I’m just going to focus on this because I can’, when there could be other things you should be working on. 

So my question to you is: Do you have a list of five to seven high value activities for your job as a business owner that you should be spending time on, scheduled in your calendar at a time when you have the most energy? Because if you don’t, you will find that you spend that time on those trivial tasks that don’t create value.

 

3. Sunk cost fallacy

There’s an example in the book about a conference. You book the flights, take the time away and spend your energy to attend this two day conference. You get there and day one is terrible, the speakers are no good and the content is not useful. 

You think, okay this was a bad decision, but you’ve gone all the way there so you might as well go to the second day and see what happens. Lo and behold, the second day is just as bad as the first. 

That’s a sunk cost fallacy. 

You knew Day 2 was likely to be just as poor as Day 1, but because you spent all that time and money, you decided to attend anyway.

What you should have done is look at that second day and go, how should I best spend that day to create the most value to myself and my business? 

Similarly, right now we’re making decisions to change our businesses to deal with this crisis. You may have gone down a particular path but at some point, your environment is going to change again and the business will have to adapt. 

If you succumb to the sunk cost fallacy or the fact that you’ve invested all this time and effort in one direction, you might not make the right decision based on what is right at the current point in time. 

Maybe this isn’t something you’re faced with right now but we’re flagging that this could be the case down the track and to be aware of it when it does occur.

 

We always welcome questions, so send any our way through here.