By Joseph Skursky, President of Market Leader Solutions
Some time ago my company had a project that was not fun or rewarding for anyone – a massive reduction in force. Literally thousands of lives were affected by the outcome, and in it, there were some clear lessons to be learned for leadership and HR responsibilities.
The mission was to identify the top 25%-30% of the workforce that should be retained. Everyone in the company completed a psychometric assessment so that the results would be objective. Each group was partitioned so the selection process would be specific to retaining the top people in each department.
In one of the groups, management wanted to identify the top 25% of the department. Once we understood the key success factors for the role, we created three sorts with multiple factors in each:
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A broad set of criteria that would quickly divide top and bottom – this was the first 80/20
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A finer set of criteria to justify why someone would remain in the top group, or move to the middle – this was the second 80/20
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Additional things we frequently review in situations like these are: Attitude Toward Honesty, Respect for Policies, and Job Ethic
Through these sorts we found that only 8% of people actually made it to the final top group, so we did something we never do – we lowered the bar and found only 13%…so we had to lower it yet again and still only reached 22%. I say this with great pain because lowering the standard is a recipe for disaster. Yet it happens every day, and not just with this company.
The conversation with my HR contact was pretty interesting and went something like this:
HR: “We needed 25%, not 22%.”
Me: ”You don’t have 25%, you hired poorly.”
HR: “But we need 25% in this group.”
Me: “But you don’t have 25%, I gave you 22%, and you really only have 8% who are actually ‘top’.”
Through this conversation it occurred to me – either top leadership or the HR department has an inclusive mindset so they can hit their numbers. Lowering the bar is not a problem in their minds.
Inclusion versus Exclusion causes Confusion
Lowering the bar to “include” always leads to failure, and was one component of why the company was in a reduction in force situation in the first place. They lost the competitive edge of insisting on higher standards.
Gordon Ramsey once said that, “standards are the staple of any business.”
This is true in customer service, production, even reputation, so why not in hiring, promoting, and most of all, leadership?
Maintaining standards requires a mindset of exclusion, or better still, exclusiveness. This is where critical judgment comes into play by knowing what is important and how to stack rank. All things are not equal in business, and this is the crossroads that leadership and HR must face with a new way of thinking.
The pace of business, communications, and news keeps people more on their heels than their toes. Symptomatically, this results in many things being urgent and important, and we know that this causes great confusion which prohibits excellent execution.
When you lower standards, you create too many options where some of them actually start to look good, or at least reasonable, which confuses the truly important issues. This is an “inclusion” mindset and is the heart of the problem inside of many businesses today.
Poor Leadership is to blame
Of all the groups in our project, most of the leadership team completed their assessments last. It was no surprise that applying similar criteria to them as we did to the rest of the groups would have eliminated at least 70% of these “sacred cows” without question.
It’s no surprise then, that over 47% of the total workforce was disengaged, and over 38% of those people were looking to leave even before knowing about the reduction in force. The assessments showed these things with great clarity.
Even among the top 22% that we identified, many of them have track records of discipline and attitude problems. This will always be the case when leadership isn’t doing its job. Top performers simply don’t respond to poor leadership and their “acting out” is one of the first symptoms revealed.
With leadership being in such a shambles, it’s difficult to state whether these are symptoms or additional problems, but for now, let’s call them problems:
- Failure to hire well
- Failure to promote well
Hiring well begins with knowing what is really required for success, then matching candidates who possess both the characteristic attributes and achievements to meet the standards for hiring them. I refer to achievements versus experience because experience really tells little about what capabilities the individual has to perform their role successfully. Don’t be so narrow-minded though to think that only achievements within an industry are relevant. A person who has the right mix of attributes can achieve similar results in related processes.
One more thing to look for so you hire well – intelligent people. As my friend and trusted colleague, Mark Herbert says, “You can teach smart people to do almost anything.” I agree with that and will take it one step further, and that is to hire people with high emotional intelligence (EQ). EQ was one of the key factors in our determination of who remained in the “top” group, and was consistent throughout the organization.
Promoting well goes beyond traditional criteria and encompasses emotional intelligence with leadership competencies at the core. What it does not do is promote based on simply doing an excellent job in a particular role, seniority, or worse yet, based on political pull.
As we reviewed those who had been promoted from within, there was overwhelming evidence that the criteria was based on past performance, job knowledge, seniority, or politics. Emotional intelligence was characteristically low as was Personal Accountability, Accountability for Others, Attitude about Honesty, and Job Ethic. That is no recipe for building a strong leadership team.
Raise Your Standards
Possibly the most shocking thing about this entirely true story is that the company isn’t downsizing because of the economy or lack of a viable market opportunity. They are in one of the markets that is growing rapidly.
A solid case could be made that their overconfidence in a robust market was the beginning of a disastrous downward spiral plagued with poor leadership, poor hiring practices, and even worse promoting practices. No matter what caused their current circumstance, the choices they made in their yesterdays could have been better had they applied wisdom, critical judgment, and high standards throughout the organization from the top down.
Perhaps the worst news is yet to come for this company. While they identified and most likely retained the top 22% that we identified, the leadership team remains intact. It doesn’t take a brain surgeon to figure out that top performers will opt out of this company of incompetent, politically-charged so-called leaders. In truth, the real tragedy has only just begun for this company.
Growing up, my dad often told me to “learn lessons from other people’s failures so you don’t have to learn them the hard way.” My greatest hope is that you will learn the key lessons from this failing company so you never, ever have to endure the pain and struggles that they have.
HR has an opportunity to reverse the trend shown in hindsight by this company. Will you raise the standards in your company and stand fast when the heat is applied? It may not be easy, but it’s far easier than losing 70% of your workforce.
Leadership has an obligation to demonstrate competency by building people, building solid teams, and growing the company. Leaders, will you drive raised standards into your own mind and the mindset of the people around you to insist that performance, commitment, and competency to lead…not politics or anything else…are the only route to growth and advancement?
Written by Joseph Skursky, President of Market Leader Solutions For almost 20 years, Joseph Skursky has been growing businesses and advising leaders in companies across North America. His model of Leadership, People, and Execution provides a clear roadmap to grow almost any business. It has been field-tested and proven effective for over 9 years. Joseph Skursky helps companies hire with confidence, manage without frustration, and increase both productivity and profitability. His “Hire Hard, Manage Easy” system has earned the respect of colleagues and clients alike. More importantly, it delivers consistent results.
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