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Jack Welch was the CEO of General Electric from 1981 to 2001. Under his leadership the GE stock went up by 4,000 per cent, making it the most valuable company in the world. Fortune named him the ‘Manager of the Century’ in 1999
Suzy Welch is a former editor of Harvard Business Review. She is also the co-author of Jack Welch’s latest book Winning
You can e-mail Jack and Suzy Welch questions at winning@nytimes.com
(Please include your name, occupation, city and country)
My company will double in size over the next year, which means we need to bring on lots of employees (as in hundreds) very quickly. Hiring is hard enough at a normal pace. Any suggestion on getting it right while going so fast?
–Lars Dalgaard, Palo Alto, Calif.
To start with, congratulations are in order. First, on your success. And second for facing the reality that you could blow it. If there is one way that rapidly growing businesses tend to self-destruct, it is by taking on hordes of new people who cannot deliver the "goods" that made the companies take off in the first place. You seem to know that. Now you just need to know how to stop yourself anyway.
Look, we know growth is thrilling, especially when you've worked for months, or more likely years, laying its groundwork. For anyone who is at the controls as an enterprise finally lifts off, the last thing you want to do is throttle back. But if you don't get this big new wave of hiring right, you will wish you did. As you note, hiring in normal times is not easy. In a growth spurt like yours, it is really hard. Companies just tend to drop all their defenses, open the gates and let the masses flow in.
One way to combat that tendency is to make sure you get religious about all the usual hiring best-practices. Test all candidates against your core values, conduct multiple interviews for each candidate and when checking references, be sure your people listen carefully for what is being said and what is not.
With your massive hiring requirements, though, we would suggest you also add a simple but galvanising technique to the hiring process: the Hiring Batting Average (HBA). This technique is something we have discussed with several groups of rapidly growing companies like yours. While new, we think it can really improve the chances of hiring correctly under high-pressure, high-speed circumstances. Here's how it works.
Every candidate for a job at your company must be interviewed by at least three people in the organisation beyond the hiring manager, and each must sign off with a ‘Hire’ or ‘Don't Hire’ vote. No may bes allowed. Fast-forward six months. Every new hire gets evaluated by his manager on how he's performed against expectations: below, meets or exceeds. Soon enough, and with enough critical mass, you can start to compare every interviewer's ‘Hire’ recommendations with actual performance.
For instance, say a manager named Emily has interviewed and approved ten candidates and, six months out, eight of them are performing at or above expectations. Emily's HBA would be .800. That impressive score let's you know Emily is a first-rate evaluator of talent and she should be rewarded accordingly. By contrast, say Emily's colleague John has given the nod to 12 hires and, after six months, only four are working out, for an HBA of .333. That average might be very good in baseball, but not in hiring. Keep John in his day job and away from picking people!
HBA delivers two other powerful benefits. At the front end, it has a way of getting current employees to actually engage – brain and soul – in the interview process. The last thing busy employees want to do is sit down for a half hour with some random candidate. After a while, all the shiny faces begin to look and sound the same. But if employees know they will ultimately be held accountable for their ‘verdicts’ – with a hard number, no less – interviews take a different and more intense light. They go from chit-chat to real conversation. After the hiring, HBA has a way of motivating interviewers to stay in closer contact with the people to whom they've given their ‘Hire’ stamp, and can even prompt them into ad-hoc mentoring relationships. After all, when more of their hires succeed, the higher their average goes. It's a win-win for them and the company.
Ultimately, for a fast-growing company to hire correctly, every old employee has to care passionately about every new employee coming aboard. And for that to happen, employees have to own the hiring process, taking responsibility for picking the best people and integrating them successfully. HBA gives you a way to measure and to inspire both. And for you right now, that's the whole ball game.
We're constantly being told that hierarchies are bad and we must flatten companies to make them more effective. But don't companies need some layers in order to organise for success?
–David Gionet, Toronto
Don't take another step – you're right at the edge of the old "Come on, one more layer won't hurt us!" slippery slope that has tripped up more managers, and companies, than perhaps any other natural disaster.
OK, maybe natural disaster is an awfully strong term to use here, but the organisational compulsion to insert layers is just about as inexorable as, say, hurricane season every year, and can be just as damaging too. The only difference is that layers can be prevented. And they must be. The reasons, as you suggest, should not be new to anyone.
In a world where faster is not just better, layers slow down everything. Take decision-making. The more layers, the more people who have to thump their rubber stamp. Or take communicating change. Layers make that process – hard enough as it already is – like that children's whispering game, Telephone. Every time a piece of information passes through a person, it morphs a little. Layers do that too, adding spin, interpretation and buzz with every telling.
But perhaps the worst outcome of layers is meddling. When there are a lot of layers, it usually means managers have too few people reporting to them. Tom in Kansas City can have, basically, three sales reps he's responsible for, or Maria in Toronto can be boss to two financial analysts and an administrative assistant. So what do Tom and Mary do with their massive underutilisation? They end up baby-sitting their direct reports, or worse, doing their jobs for them. Talk about killing morale and initiative!
But let's not harp on the all-too-familiar consequences of layers. Your job is to fight them, even if it is against your organisation's gravitational pull. "Uh-oh, we've got more sales," people say, "We better add more district managers in the field," or, "More employees? Better add a few positions at headquarters."
What is right when it comes to layers? You'll know you're there if you're, well, uncomfortable. That is, you've probably gotten to the right level of layers if your company is 50 percent flatter than you'd like.
Look, we're not saying this is the end of the world. We're just saying you should think of every layer as a bad layer. And like a hurricane, if you see one coming your way, batten down your hatches. Better yet, escape to higher ground and let the danger pass you by.
What is lousy leadership? Are there different categories of bad leaders?
–Goran Milic, Zagreb, Croatia
Now, why would you ask that question? Certainly not because you want to be a lousy leader yourself. It can only be because you're checking your instincts about someone you know. May be even the person who writes your paycheck.
And in that, you're not alone. We have written in a previous column about employees who are inveterate boss haters but we've never given bad bosses their due. So herewith are a few of the most familiar ways leaders can get it wrong.
The first, and perhaps most frustrating way, that some people blow leadership is by being know-it-alls. They can tell you how the world works, what corporate is thinking, how it will backfire if you try this or that and why you can't change the product one tiny iota. Sometimes, these blowhards get their swagger from a few positive experiences. But usually they're just victims of their own bad personalities.
They don't listen, and that ‘deafness’ makes it very hard for new ideas to get heard, debated, expanded or improved. No single person, no matter how smart, can take a business to its apex. For that, you need every voice heard. And know-it-all leadership creates a deadly silence.
If know-it-alls are too much in your face, a second kind of lousy leader is too little. We're talking about emotionally distant bosses. Sure, these remote leaders attend meetings and other requisite functions, but if possible, all the messy, sweaty people stuff would be delegated to human resources managers on another floor. Like know-it-alls, this breed of leader is dangerous, but for a different reason. They don't engage, which means they can't inspire. Leaders, after all, need followers to get anything done. And followers need passion for their fuel.
A third category of lousy leadership is comprised of bosses who are just plain jerks – nasty, bullying or insensitive, or all three.
A reader wrote us recently, "My boss is abusive, by which I mean disrespectful, finger-pointing and sometimes even paranoid." Such leaders are usually protected because they deliver the numbers. But, with their destructive personalities, they rarely win their people's trust. That's no way to run a business, which is why these types of leaders self-destruct.
The next type of lousy leadership is at the other end of the spectrum: being too nice. These bosses have no edge, no capacity to make hard decisions. They say yes to the last person in their office, and then spend hours trying to clean up the confusion they've created. Such bosses usually defend themselves by saying they're trying to build consensus. What they really are is scared. Their real agenda is self-preservation – good old CYA.
Which leads to a final version of lousy leadership, which is not unrelated – bosses who do not have the guts to differentiate. The facts are, not all investment opportunities are created equal. But some leaders can't face into that reality.
As a result, promising growth opportunities too often don't get the outsized infusions of cash and people they need. But leaders who don't differentiate usually do the most damage when it comes to people. Unwilling to deliver candid, rigorous performance reviews, they give every employee the same kind of bland, mushy, ‘nice job’ sign off. And when rewards are doled out, they give star performers not much more than the laggards. Now, you can call this egalitarian approach kind or fair but it's really just weakness. And, when it comes to building a thriving enterprise where people have an opportunity to grow and succeed, weakness just doesn't cut it.
We hardly expect lousy leaders to read this column and see themselves. Part of being a lousy leader, no matter what the category, is lack of self-awareness. But if you see your boss in the above groupings, take heart. When it's finally your turn to lead, you'll know what not to do.
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