Sharing equity with your team can be a powerful motivator, and there are two basic ways most firms do it.
Every business has the occasional fire. When it hits, you should have plenty of people who we call “Firefighters” while avoiding folks we label “Snow Cones.
“Every business, from successful startups to well-established corporate giants, hits a rough patch or two. It’s just a part of doing business.
But if you’re going to weather those storms as an organization, you’ll need people who can handle the heat and won’t melt under pressure. In other words, you should be hiring plenty of who we might call “Firefighters” while avoiding bringing on folks we might label “Snow Cones.” Let me explain. Continue reading Are Your Employees Firefighters or Snow Cones?
A word of caution for any entrepreneur who has founded a business and remains active in it: you might need to fire your CEO – yourself.
Of course, every owner of a growing business knows what it’s like to play multiple roles. But let’s focus on the distinction between two of them: owner and CEO.
When you’re hiring, think beyond the skills and experience a candidate might have and assess whether you want a patriot or a mercenary.
When you’re thinking about hiring people, especially those in mission-critical-type positions, you need to use caution because the stakes are so high anytime you make a bad hire. But beyond whether they are an A, B or C Player and the skills and experience a candidate might have, you also need to assess whether they are a patriot or a mercenary. Let me explain.
Patriots are employees who seek to join your company because they believe in your organization’s purpose and mission. They want to contribute to the cause. Maybe they are drawn by what your company does or how you do it because it resonates deeply with their own personal beliefs. This can be a very powerful draw for some job candidates, many of whom might even be willing to make personal sacrifices like taking less pay, relocating their family or even working long hours for the opportunity to be part of your organization. Patriots are also deeply loyal to the organization and tend to stick around even when times are tough and the bullets start flying. We often see startups filled with people like this who choose a job based on its higher purpose rather than higher pay because the organization doesn’t yet have the resources to offer much in terms of compensation.
Mercenaries, on the other hand, choose their next job based on how it will benefit them as an individual. You can identify a mercenary right away just by looking at their resume, where you’ll find lots of short tenures and plenty of job-hopping – something that’s common in job areas like sales and software developers. That’s not to take anything away from a mercenary’s skills: they are usually very talented and in demand. The tradeoff is that, unlike the patriot, if a mercenary’s personal needs aren’t being met, they are likely to jump ship at the first sign of trouble. Usually, they are just there for the money.
Why The Distinction Matters
One reason its critical to understand whether you are hiring a patriot or a mercenary is that your choice will impact your culture. Patriots are the people who live your culture on a daily basis and do things the way you want them done. Mercenaries, on the other hand, don’t always think the rules apply to them – especially if they are producing results.
While mercenaries can be very valuable to the growth of your company, you need to understand that they also carry a risk to your culture – at least depending on your business model. If you run a bond trading firm, for example, you might rely on a staff of 100% mercenaries – and that’s a good thing. But for most of us, especially those of us who want to build a company and a culture for the long haul, we need to be careful about how many mercenaries we have on staff relative to our patriots.
Consider the example of a company a friend of mine owns that operates in the government contracting space. It’s a tough business that relies a lot on relationships and social networks to be successful. That means that having a top-notch business development person is critical to any company’s ability to land new business. These folks have a very specialized, and valuable, skill-set – which means they can be hard to find and retain.
In the case of my friend’s company, he was fortunate to hire one of the best business developers around. And this guy delivered: he landed several large orders for the company (that he was well compensated for, by the way.)
But it also became apparent that digesting the work involved with those contracts was going to take my friend’s company at least a year to work through before they would be able to go out and bid on any new business.
Guess what happened? My friend’s business developer jumped ship rather than risk earning less by waiting for the company to chase new work.
This is a classic case of what happens when you hire a mercenary versus a patriot, someone who would have been willing to shift roles or jobs in the interim as a way to stay with the company and be part of its success over the long haul.
Both patriots and mercenaries can play important roles in your organization’s success. Just know what you’re hiring up front so you can plan best for the long run of your company.
Many companies rate their talent well above average. Besides being untrue, this is a dangerous strategy as your top performers will leave you if you do.In the mythical town of Lake Wobegon, made famous by Garrison Keillor on National Public Radio, it is said that all the children are above average.While you might laugh at that joke, it’s worth asking: are all the people in your organization rated above average and how do honestly assess the talent in your organization?
In my work with the Inc. CEO Project, we’ve actually found that most of the CEOs we work with tend to hand out inflated grades – especially to the members of their executive team, all of whom tend to receive above average appraisals.
In the HR world, this is called a “central tendency problem.” In other words, it’s statistically unlikely that every member of an executive team is delivering above-average performance. No doubt some of them are. But all of them?
Consider a recent report released by the Government Accountability Office, or GAO, which said that some 73% of 1.2 million high-level federal workers received performance scores of outstanding or fully successful. Just as surprisingly, just 0.5% of these employees delivered minimally successful or unacceptable work – which, if you do any work with the government, you know is not the case.
This helps illustrate the point about how crucial it is to take an honest and objective look at how the talent in your organization is performing. But how do you do that?
One approach is what GE famously took under Jack Welch when it placed people into performance bands: 20% of the company was exceeding expectations (A players); 60-70% was meeting expectations (B players); while the bottom 10-20% performed below expectations.
What this model told us was that most of the people in an organization perform at an average level, which makes sense. But what turned people off about this approach was that GE also fired the lowest performers each year with the idea that they could then hire A and B players to replace them.
The key lesson we can learn from this system of defining who is an A, B, or C player, is that there is value in seeing how the talent in your organization stacks up. So next time you conduct performance reviews, have your HR team make a list of how many people performed at each level. Clearly, if you find that you have a bunch of low achievers, you have a big problem on your hands! But if most everyone falls into the over-achieving bracket, you also need to reassess how you’re evaluating your talent.
One key reason why this is so important is that if you allow a central tendency problem to persist, you will quickly alienate your true A players. If your truly exceptional performers feel like they are being lumped in with lesser players and being rewarded the same way, they will leave and look for an organization that will recognize and reward their capability.
That means you will be effectively downgrading your talent across the board; something no organization can afford to do.
What you can do instead is that if you have a problem with honestly assessing your talent, it’s time to reboot the system and reset expectations. Make it more demanding by shifting the entire curve downward. What used to be outstanding should now be considered average. What used to be considered good is now below average. Doing this allows you to be more discriminant about how you allocate everything from raises and promotions to stock options to your true top performers.
While it might be nice to live in a place like Lake Wobegon, be wary if you find that everyone in your organization thinks they are above average. It probably means your performance appraisal system is broken – and your company’s long-term performance might be at risk because of it.
What do you do when someone who is unquestionably brilliant is also a jerk?
We all work with someone who is unquestionably brilliant. You know the type: the person who consistently comes up with great insights and ideas and who can cut to the quick far faster than anyone else in the organization. It’s hard not to step back and admire how the person’s brain works.
At the same time, such people can begin to think their gifts place them above everyone else in the organization. They tend to hog all the airtime at meetings by intimidating and maybe even ridiculing those who might have the audacity to offer their own take on a situation–thus suppressing collaboration and participation throughout the rest of the organization. They also follow their own rules and are evenabusive to the rest of the staff. They aren’t nice people to be around. In other words, these people are jerks–which creates real issues within your organization.
But since they are brilliant, what should you, as the leader of the organization, do about it?
Netflix CEO Reed Hastings has been very clear about what his organization does with its brilliant jerks: It gets rid of them. As he has said in the past about them: “Some companies tolerate them. For us, the cost to effective teamwork is too high.”
What Hastings came to realize is that regardless of how smart or even how productive such employees might be, they can actually begin to rip an organization apart from the inside if they don’t buy into the organization’s values and embrace working collaboratively.
In my upcoming book, Great CEOs Are Lazy, I call these folks “cultural terrorists” because of how destructive they can be to an organization. Certainly, your first option should potentially be to use coaching as a way to polish a brilliant jerk’s prickly edges. Obviously, you can’t make anyone a nicer person, but perhaps you can make the person aware of how damaging her behavior is to peers and see if she is willing to make changes accordingly.
If these folks are unable to change their behavior, however, then they leave you no choice but to exit them from the organization. By doing so, you’re making a powerful statement to the rest of your team about how important your culture is–what is tolerated and what is not. The longer you let them remain, the more damage they cause inside your culture and to your own reputation as a leader. People will lose trust in your abilities, which can undermine all the hard work you’ve done to build a strong team in the first place.
When you exit a cultural terrorist, it should be known within the organization that the person is no longer with you because of her behavior, not due to her performance on the job. This will set a tone about the kind of culture you want to build and the kinds of behaviors you’ll accept–and the kinds you won’t.
There are organizations where brilliant jerks are welcomed and where they thrive. For example, I know of several prominent consulting firms where individual contributions are valued more than teamwork. And that’s OK if that’s the kind of organization you’re trying to build.
But if you’re like Netflix and believe there is greater collaborative power through teamwork, then you need to act now when it comes to dealing with your brilliant jerks. You can’t afford to wait until after the damage has been done.
Great companies look at the skill and the will of the potential hire, but they spend just as much time on cultural fit. And many use these four simple questions to determine that fit.
When most people go about the process of hiring on a new employee, they tend to focus on “skill” and “will.” In other words, they look at what skills a person has–like their experience, areas of expertise, and other things they list on their resume–as well as whether that person is willing and interested in working for the company.
But there’s a third category of analysis that most people tend to leave out: culture fit. And frankly, if you want to spend a large amount of your life in contact with them. You don’t get to pick your family, but you can pick your employees!
While we didn’t know it at the time, the most important thing we ever got graded on back in kindergarten was how well we worked and played with others. The same thing is true when it comes to making great hires.
We all know people who are incredibly bright and competent, but who are also not very nice people. They tend to be selfish and self-absorbed and seem to suck the energy out of the room. You simply don’t want to spend time with them. I call people like this “cultural terrorists” because of the damage they can wreak on an organization. That’s why the best companies do everything they can to avoid hiring these people in the first place.
But how do you know how to assess whether someone is a cultural fit or not?
I’ve found that the companies who do the best job at screening potential hires for cultural fit ask some variation of these four simple questions:
Would I like to have a cocktail with this individual? The best interviewers begin by asking whether they’d be willing to spend an hour or so talking casually with this person after work. Are they interesting enough to have a conversation with? Or are they difficult to deal with, socially awkward, or even so self-absorbed you can’t get a word in edgewise?
Would I play a round of golf with them? Golf is not only a great way to spend a day networking and talking shop; it’s also an investment of four to five hours of your time. Is this person someone you’d be willing to ride along in a cart with or even walk beside for that long? If you don’t play golf, substitute, “go to a baseball game” and see if you are excited or thinking of ways to get out of it.
Would you sit next to this person on a flight to Tokyo? Upping the stakes even higher here, but is this the kind of person you could tolerate chatting with over an 11-hour international flight or would you be tempted to lock them (our yourself) in the bathroom instead?
Would you want this person in your foxhole? It’s one thing to ask yourself how you might get along with someone in the best of times. But how do you think this person would react to the worst of them? If you found yourself in the middle of a battlefield, say, with bullets and explosions all around you, do you think you could count on this person to watch your back? Will they remain cool and collected or will they freak out and run for the hills? Assessing how someone might react to a stressful situation is critical for every entrepreneur to ask because sooner or later, you’ll be facing that kind of situation in your business. And you’ll want to count on your team to stand their ground no matter what the odds are.
Now if you can answer yes to all four of these questions, and the candidate also passes the skill and will test, what are you waiting for: make the offer!
But, if you hesitated on answering any of these culture fit type questions, and questioned whether you would truly enjoy working with this person, then just say no. After all, life is too short to work with people you don’t like.