Chapter Eight

Aligning the Stars

In astronomical terms, we know that the nearest star to Earth is the sun, which serves as the constant source of most of the energy on our planet. We also know that novas are stars that draw attention because they brighten very significantly very rapidly. More dramatic even than the nova, the extremely luminous supernovae can cause a burst of radiation that often briefly outshines an entire galaxy before it fades over weeks or months, sometimes causing the star itself to destruct. Although rare in number, during its short role on the celestial stage, a supernova can radiate as much energy as the sun will emit over its entire life span, often causing the creation of new stars.

Like their celestial counterparts, human stars create energy in the organization, often causing explosions of ideas that send shock waves throughout the industry. The human supernovae also influence the formation of other luminaries. To position your company for growth in a global economy and to create the agility to respond to future unforeseen turbulence, you need to create the atmospheric conditions that will allow the unvarying sun to shine, the novae to influence, and the supernovae to explode. But traditional approaches won’t work. Instead, you’ll need a new way of thinking about how to draw the best from these brightest, which will require your thinking of your legacy in new ways—ways that will foster trust, evoke excellence, and drive the business.

Why Traditional Approaches Won’t Work

Conventional views of leadership are somewhat superficial—a list of expectations, characteristics, traits, and values that sets us up for disappointment and proves unrealistic. We too often expect our leaders to provide a bigger-than-life parental figure who rescues us from our messy selves, a hero who can set things right when we can’t. Stars don’t have these fantasies and wouldn’t welcome this sort of leadership, even if it were humanly possible. Stars want exemplary leaders, ones who inspire, guide, and encourage; but they neither want nor demand the human equivalent of a Border Collie because they don’t consider themselves sheep-like.

In years past, young men entered the same profession as their fathers, and they remained there until retirement. People developed a sense of community and identity with their peers and coworkers. The company’s leader acted as a kind of mayor as much as he did the sheep dog. Words like “visionary” and “innovator” didn’t usually apply. The word “leader” had more to do with status and power than responsibility or accountability. Times have changed, but our needs haven’t.

A New Need for Community

Research tells us that the needs for inclusion, affection, and control shape us throughout our lives. Traditionally, the combined contributions of the family, the church, the community, and the organization satisfied our needs. Now, with dispersed teams, virtual workplaces, divided families, and decreased church attendance, satisfaction of basic human needs falls overmuch to the organization. Additionally, when people work long hours—as stars tend to do—they have fewer hours for leisure and life balance. Consequently, they rely more on those at work to fulfill their basic needs. That’s one of the reasons organizational culture has become more significant.

Among other things, culture defines a coherent value system for those in the organization. As author and leadership theorist John Gardner put it, “The community teaches. If it is healthy and coherent, the community imparts a coherent value system. If it is fragmented or sterile or degenerate, lessons are taught anyway—but not lessons that heal and strengthen. It is community and culture that hold the individual in a framework of values; when the framework disintegrates, individual value systems disintegrate.”¹ When culture fades, individuals often experience a loss of meaning, a sense of powerlessness. They lose the conviction that they can influence the events of their lives or community. Too often, highly accomplished people, left without moorings by the disintegration of group norms and torn from any context of shared obligations, have gotten drunk on self—or they have left to find a community of people who will augment and elevate their best work.

Last spring I visited a restaurant in a location that attracts young people during spring break. Each table boasted different sweatshirts with different university logos, but each table had at least one person wearing a shirt with writing on it. The TV in the bar flashed both live March Madness games and updates from games not showing. Virtually everyone in that establishment wanted to feel connected to the excitement of basketball games or to a university he or she attended or hoped to attend. It’s what we do. We crave connectedness.

Those who aspire to lead stars recognize that even though they won’t usually wear a company logo on their shirts, stars want others to identify them as a member of something important. Groucho Marx once said, “I don’t want to belong to any club that would have me as one of its members.” Stars have a different mantra. They want to boast about their membership in an organization, and they respect the person that recognizes their talents and manages the culture in which it can thrive.

Stars require a new paradigm, one that sees leadership as a process, not a title—something that confers responsibility, not just privilege and power. This process involves the leader shining the light into the darkness, inducing others to pursue organizational objectives, and influencing outcomes—exceptional outcomes. They inspire because they model the way through exemplary behavior and stellar decision-making. In Chapter Three, I outlined the constructs of a stellar organization: excellence, talent, culture, and strategy. As the leader, you have three main responsibilities related to creating this kind of organization: make decisions, develop the bench, and drive the business. When you tie these three to the requisite aspects of the stellar organization, you’ll take huge strides in developing a new and different approach to leadership. Decades ago Einstein said, “Perfection of means and confusion of ends seems to characterize our age.” The age to which he referred has long passed, but the syndrome of which he speaks has not. The time has come for something better; history holds the key to what that something should be.

Sometimes It’s the Boss’s Fault

At the end of the Vietnam War, a considerable strain of skepticism aimed at national and Air Force leadership ran through the fighter force. Some pilots concluded that the leadership did not care about them. Less than five years after the war ended, an exodus of pilots, displeased with the Air Force, voted with their feet as they walked into commercial airline jobs. Then-captain Ron Keys expressed their collective feelings eloquently in a paper that has since become famous as the “Dear Boss” letter.

Keys and others in the Tactical Air Command had received orders to write down their concerns so they could be forwarded to General Creech. Keys had no intention of putting in his papers to get out of the Air Force and hadn’t even planned to write anything, except that his boss said it was both mandatory and urgent that he do so.

In September 2012, I had the privilege of hearing retired General Ron Keys address the Air Force Association conference when he recalled the circumstances of the now-famous “Dear Boss” letter.²

I have summarized the letter:

Dear Boss,

Well, I quit. I’ve finally run out of drive or devotion or rationalizations or whatever it was that kept me in the Air Force this long. Why leave flying fighters and a promising career? I’m resigning because I’m tired. Ten years and 2,000 hours in a great fighter, and all the time I’ve been doing more with less—and I’m tired of it.

I thought I could do it just like all the rest thought they could... and we did it for a while...but now it’s not the job. I can do it. I did it. I can still do it—but I won’t. I’m too tired. Tired of the extremely poor leadership of our senior commanders—people who can’t even pronounce esprit de corps. And let me clue you—in the fighter business when you’re out of esprit, you’re out of corps—to the tune of 22,000 in the next five years.

Why hang around in an organization that rewards excellence with no punishment? I’ve worked hard. I’ve established myself; I can do the job better than anyone else—does that make a difference?

It’s the organization itself. A system that allows people that lack the aptitude or the ability to do the job. Once they’re in, you can’t get them out. So now we have lower quality people with motivation problems, and the commander won’t allow anyone to jettison them. If you haven’t noticed, that leaves us with a lot of people in fighters, but very few fighter pilots.

And the clincher—integrity. Hide as much as you can...particularly from the higher headquarters that could help you if only they knew. They never will though—staff will see to that: “Don’t say that to the general!” Ah well, put if off until it becomes a crisis—maybe it will be overcome by events. Maybe if we ignore it, it won’t be a problem.

And that’s why I’m resigning...long hours with little support, entitlements eroded, integrity a mockery, zero visible career progression, and senior commanders evidently totally missing the point (and everyone afraid or forbidden to inform them).

I’ve been to the mountain and looked over and I’ve seen the big picture—and it wasn’t of the Air Force.³

After writing the letter, Ron Keys went on to serve 27 more years in the Air Force, retiring at its highest rank. A virtuoso by any measure, he held responsibilities at the highest level of the Air Force, accumulated more than 4,000 flying hours (including more than 300 hours of combat time), and commanded several squadrons and wings, the Fighter Weapons School, and organizations reporting directly to major commands.

The Dear Boss letter stands as a legend because it captures the frustrations exceptional performers have always felt and outlines what those who lead them should do differently. Top performers want access to their bosses, resources, other motivated people to work with, career progression, and integrity. Most of all they want bosses who listen to them—to what they say and don’t say—in other words, a new way of leading.

A New Model of Leadership

Though stellar organizations require the qualities traditionally associated with leadership, such as intelligence, toughness, determination, and vision for success, the list doesn’t offer a complete picture of what leadership requires. Leading others to accomplish results also requires self-awareness, self-regulation, motivation, empathy, and social skills. Common sense suggests, and my personal observations confirm, that without a responsive, fair orientation, people can have the best training, an analytical mind, and an endless supply of great ideas, but they still won’t be the kinds of leaders that will attract and retain the stars.

What explains the differences between leaders who rise steadily through the ranks and derailed executives whose careers mysteriously jump the track short of them reaching their potential? When people quickly find the fast track, show they can get the job done, and offer enough intellectual acumen to succeed and still don’t lead effectively, we have to suspect that flawed leadership style is the culprit. Even those leaders who have studied management theories find themselves wondering what they should actually do to improve.

The F² Leadership Model explains the behaviors—not skills, talents, attitudes, or preferences—executives need to display to be effective. F² leaders indicate a balanced concern for both task accomplishment and people issues. They are firm but fair leaders whom others trust, leaders who commit themselves to both relationship behavior and impressive results.

The F²Leadership Model shows the tension that exists between the opposing forces of firmness and fairness and challenges us to ask ourselves how to have both a clear task orientation and an appreciation for the people who achieve the results.

Both prescriptive and descriptive, the four-quadrant model allows leaders to understand their own behavior relative to their direct reports, but by its nature, it implies a preferred way of behaving. The model explains what leaders should do to be effective instead of merely describing what they tend to do or prefer to do. Keep in mind, the model represents an ideal, so no person fits into one quadrant all the time. Leaders who want to be more effective strive for F²behavior, but they occasionally drift into one of the other quadrants. When this happens, problems occur.

More receiver-oriented than leader-driven, the model keeps the leader’s focus on those who count—the stars in the organization who will define success. It helps leaders figure out whether they are losing balance—tending to act too much like either Genghis Khan or Mr. Rogers.

The Aggressor

The upper-left quadrant represents a traditional approach to leadership—too forceful and aggressive. The person whose behavior fits into this quadrant displays too much dominance and control and general insensitivity to others. Often aggressors justify their behavior because, in the short run, it gets results, but in the long run, the stars in the organization can’t and won’t flourish with this style. Though many of these leaders acknowledge their autocratic style of leadership, they see no reason to change—until the stars take their talent elsewhere.

The Quit ’N Stay

The lower-left quadrant represents people who commit neither to task accomplishment nor to building relationships. Cautious, unassertive, secretive, or submissive, people who display Quit ’n stay behavior too much or too often usually don’t make it to the level of executive in organizations. These leaders don’t even qualify for “ordinary” status. Stars don’t respect the quit ’n stays who tend to drag their feet on decisions, take forever to accomplish a task, and avoid changes that will cause upheaval in their lives. Consequently, behavior in this quadrant represents the surest and fastest way to fail—and to lose exceptional performers who have no patience for anyone who would settle for average or below average performance.

The Accommodator

The lower-right quadrant describes the accommodator, the highly sociable, overly optimistic, talkative, and eager-to-please person. These leaders tend to gloss over conflicts, ignore troubling facts, give in for the sake of harmony, or spend inappropriate amounts of time socializing at work. Leaders who can’t make tough decisions or who won’t give negative feedback fit into the accommodator quadrant. Though friendly and pleasant to work for, when the stars start to tally results, accommodators come up short.

The F² Leader

The upper-right quadrant describes successful, magnetic executives—leaders who tend to demonstrate a collaborative and democratic leadership style. Although highly skilled in task accomplishment, they don’t sacrifice the rules of civility in the process.

Visionary and strategic, F² leaders consistently strive to influence others, shape ideas, and impact outcomes through persuasion and logic, no coercion. Direct reports, peers, and other leaders value F² leaders because they not only get things done, they do so in a manner that motivates the people around them. Their balanced leadership style brings out the best performance in others, and accounts, in large part, for their success. F² leaders challenge others to deliver their best; they stay focused; and they demand excellence. They allow the situation, not their own mood or tendencies, to determine the degree of forcefulness they use. They don’t shy away from the tough calls, but those in their chain of command don’t find them domineering or controlling.

Trust: The Glue That Makes Stars Stick Around

“Trust” has become a conversational shuttlecock that people bat around—assuming everyone defines the word in the same ways and values it to the same degree. Everybody seems to agree that trust is a good thing. They just don’t all agree on exactly why.

Trust has four main constructs. The first and most obvious involves faith in people, that they won’t lie, cheat, or steal—a sort of “honor code” genus of trust. A client or direct report wants to think, “I can rely on this person to do what’s right simply because it’s the right thing to do. This person has always conducted himself/herself with honor and integrity, so I have no reason to worry about continuing with this relationship.”

The second part addresses my belief in your competence. I have to trust that you have the ability or skills to deliver on your promises. I trust my daughter to keep my books and invoice my clients, but I wouldn’t trust her to take out my appendix—even on a good day.

The third aspect of trust relates to reliability or consistency of performance over time. I may trust your integrity and value your product, but if you can’t consistently deliver above-average performance, I ultimately won’t trust you. You have to offer a proven track record.

The fourth characteristic of trust involves my feeling that you have my best interest at heart. I trust that you want me to succeed or benefit, independently of other factors. I trust you when I think you will look out for me.

What price do leaders pay when trust wanes? The most dramatic price usually entails loss of valued customers. When you deliver world-class products or services, clients develop loyalty to you. But if you can’t distribute them in some reliable fashion, even the most devoted of your fans won’t stick around. Or, if you give customers any reason to question your ethics, they’re gone.

The second price includes loss of key talent. Top performers simply won’t tolerate situational integrity, incompetence, or substandard performance. Like the pilots described in the “Dear Boss” letter, they will leave. Stars take pride in their work, and if you won’t let them do their best work at your place of business, they will take their talent to your competitor.

A third price involves the contagious nature of low trust. When senior leaders cheat on their expenses, overcharge customers, sell inferior products, or offer second-rate service, some employees eagerly pick up the unprincipled gauntlet. They start expensing meals they didn’t eat, billing for services not rendered, and doing the wrong thing for a perceived “right” reason like helping the company. Eventually leaders spend all their time looking behind doors—ones they’ve hidden behind too often.

There’s a simple solution. Trust and offer trustworthiness, and do both consistently. Not only ethically desirable, steadiness, dependability and predictability are also practical. When leaders don’t behave in expected ways, they cause nerve-wracking insecurity for those who rely on them. Inconsistency, the enemy of trust, is one of its fastest-moving destroyers. Conversely, predictability defines the heart of trust, and stars expect it. They want consistent messages and standards. Even when they benefit from favoritism, stars resent inconsistency because it engenders cynicism in the rest of the organization.

Therefore, keep policies and standards consistent. When leaders play favorites, allow a few pet performers to bend the rules, or tolerate malcontents, others notice. If you establish a rule, everyone should be required to uphold it. If you don’t consider an issue important enough to have a company policy about, don’t bother with it. In other words, don’t have a policy about something unless you will fire your most valuable employee for violating it.

Expect competence, high-quality performance, and civilized behavior from everyone. Although the same standards of behavior should apply to the genius, technical expert, top salesperson, rainmaker, or company curmudgeon, often they don’t. Instead, leaders tend to overlook people who operate at one end of the continuum or the other. Too often top performers and the profoundly unpleasant or under-performing employees get away with aberrant behavior simply because the leader chooses to avoid confrontation.

Look decisions, especially the tough ones, squarely in the eye, and make the call. Even when you get the decision wrong, others will react to your decisiveness more favorably than they would waffling. Give honest feedback, address rumors, and communicate candidly. Then do these:

• Admit mistakes.

• Apologize.

• Put yourself in the emotional shoes of others.

• Control your temper.

• Ask and listen.

• Change your mind when new information indicates you should.

• Follow the rules—all the rules—even the ones you don’t agree with.

• Be realistic in your expectations.

Stars expect much of their leaders. Gardner also wrote that stars want leaders who “create the conditions and climate of challenge, expectation, and opportunity. They can remove the obstacles, unearth the buried gifts, and release the world-renewing energies.”⁴ To lift them and move them, leaders have to believe in their people and give them reason to believe in return. History teaches us that sometimes circumstances create situations that cause leaders to flounder or to flourish.

For instance, October 28, 2012, marked the 50th anniversary of the Cuban Missile Crisis—the central crisis of Kennedy’s presidency—and perhaps of the entire Cold War. In an attempt to establish a Soviet nuclear presence just 90 miles off the coast of Florida, Khrushchev sent Russian ships carrying nuclear warheads to Cuba. Emboldened by Kennedy’s failure at the Bay of Pigs, Khrushchev stated that Kennedy would do anything to prevent nuclear war: “Kennedy doesn’t have a strong background, nor generally speaking, does he have the courage to stand up to a serious challenge.” He assured Cuba’s Che Guevara that “You don’t have to worry. There will be no big reaction from the US side.”

The Soviets and Cubans underestimated Kennedy. Following an October 14 reconnaissance trip over Cuba, for the first time in history the Strategic Air Command advanced its alert posture to DEFCON 2, one step short of nuclear war.

Kennedy resisted calls for direct engagement and ordered, instead, a naval blockade of Cuba. The move prevented the Soviet ships from gaining entry to the island and bought time for cooler heads to prevail. On October 22, Kennedy declared that any missile launched from Cuba would warrant a full-scale retaliatory attack by the United States against the Soviet Union. On October 24, Russian ships carrying missiles to Cuba turned back, and when Khrushchev agreed on October 28 to withdraw the missiles and dismantle the missile sites, the crisis ended as suddenly as it had begun.

More than a year earlier, however, Kennedy’s leadership during the Bay of Pigs invasion had not turned out so well. In fact, historians often blame Kennedy’s failed leadership during the Bay of Pigs crisis for the ultimate boldness that caused the missile crisis.

The purpose of the Bay of Pigs invasion had been to touch off a nationwide uprising to against Castro, which members of the Eisenhower administration had put into place at the end of their tenure. When Kennedy took office, he abolished Eisenhower’s Planning and Operation Coordinating Board, thereby eliminating the checks and balances inherent in Eisenhower’s council.

By financing and directing anti-Castro Cuban exiles, the United States hoped to overthrow Castro. It didn’t work. On April 17, 1961, the landing of 1,453 Cuban exiles on the southwestern coast of Cuba turned, within 72 hours, into a complete disaster, resulting in the capture of 1,179 invaders and the deaths of the remaining 274.

Not only did the offensive fail, it also aggravated already-hostile relations between the United States and Cuba, intensified international Cold War tensions, and inspired the Soviet Union to install missiles with nuclear warheads in Cuba the following year.

Most historians agree that Kennedy and the participants who planned the invasion made some fundamental errors in judgment that they didn’t repeat during the missile crisis:

• Perhaps naiveté, hubris, or inexperience caused Kennedy to disregard Eisenhower’s plans and the input of dissenting voices during the planning of the Bay of Pigs invasion. No such over-confidence guided his judgment during the missile crisis.

• Kennedy made the decision to invade Cuba based on the theory that the incursion would start a large-scale uprising, a miscalculation that proved later to be erroneous and costly. He more successfully based his conclusions on definitive information during the missile crisis.

• In general, the United States created an impression of irresolution in the invasion when it did not show enough aggression in its support of Cuban rebels. Kennedy specifically compromised the U.S. commitment when he refused the air support needed to protect the exiles. Conversely, Kennedy’s firmness in his negotiations with Khrushchev during the missile crisis showed the Russian leader that he had been mistaken in his assumptions that Kennedy would not have the courage to stand up to a serious challenge.

• During the Bay of Pigs invasion planning sessions, a high degree of cohesion and pressure to conform existed among CIA members. They hesitated to challenge one another and intentionally kept dissenting opinions, when someone had the nerve to express them, from the President. They sidestepped methodical research, planning, and checks and balances, focusing instead on the Machiavellian approach that overthrowing Castro justified any means to that end. Kennedy did not question or uncover their subterfuge and shoddy research until it was too late.

• Kennedy allowed members of the invasion planning group to think affiliation with him and top CIA and military leaders rendered them invulnerable. They shared the illusion that they were insulated because of the secrecy and presidential involvement, so they invented justification for their actions. Kennedy tolerated no such illusions during the missile crisis.

• During the initial discussions of the invasion, Kennedy voiced his opinion before he heard from his experts. He needed dispassionate data, but he heard echoes instead, thereby dooming any chance for robust examination of all angles and possibilities.

Kennedy’s leadership during his short tenure in the White House offers some of the most profound leadership lessons of modern time. First, the same man led in both situations—one a complete fiasco, the other a disaster averted. He shows us that leaders can learn from mistakes, as long as they show a willingness to examine what went wrong and commit to a different course of action.

Second, he illustrates that a failure—even one as large as the Bay of Pigs invasion—need not define a leader’s tenure. Historians now laud Kennedy for his pressure under fire, his willingness to compromise with Khrushchev, his resolve, his diplomacy, and his courage. He drew a metaphorical line in the Atlantic and warned of dire consequences if Khrushchev dared cross it, but he also negotiated a peaceful resolution that avoided nuclear war and gave Americans reason to trust his leadership. He had star performers advising him in both situations, but his leadership drew the best from the brightest when he changed his leadership approach.⁵

Instead of Paying Top Dollar for Talent, Get Top Talent for the Dollars You Pay

In the 1960s, Laurence Peter began to notice incompetence. He observed that whereas some people function competently, others rise above their level of competence and habitually bungle their jobs, frustrate their coworkers, and erode efficiency. He concluded that for every job that exists in the world, there is someone, somewhere, who cannot do it. Given sufficient time and enough promotions, however, that person would get the job. Peter searched for the underlying principle that would explain why so many important positions were occupied by persons incompetent to fulfill the duties of their offices.

He developed “The Peter Principle,” a belief that posits that when organizations promote based on achievement, success, and merit, employees will eventually be promoted beyond their level of ability and rise to their level of incompetence. If people don’t advance solely based on their track records, what else remains? Potential.

The principle holds that in a hierarchy, people will receive promotions so long as they work competently. Eventually they will be promoted to a position at which they are no longer competent—their level of incompetence. Too often, there they remain, unable to earn further promotions, but also clogging the pipeline for those who can still move up. Often virtuosos fill the roles of those who wait impatiently.

Frequently a person’s cognitive skills have proven adequate at one level but will prove insufficient when the problems become more complex, the surprises more frequent, and the priorities less stable. Sometimes individuals with exceptional tactical abilities excel at getting the work finished and the product out the door. Similarly, some people can handle a budget but don’t understand how to function in a role that has profit/loss responsibilities. They simply lack the quantitative reasoning to play in the tougher league.

The employee’s incompetence, however, is not necessarily a result of the higher-ranking position being more difficult. It may be that the new position requires different work skills which the employee does not possess. For example, an engineer with great technical skill might get promoted to project manager, only to discover he lacks the interpersonal skills required to lead a team.

Peter offered advice for those who lead virtuosos—those he called “super-competent.” As he noted, competent managers will promote a super-competent for the betterment of the organization. Incompetent managers, however, will feel intimidated and threatened by those who excel too much.⁶

As you examine your hiring and promotion systems, consider the following for avoiding the Peter Principle:

• Develop an “up or out” policy that requires termination of an employee who fails to advance, either through promotion or skill development. Those who remain in positions for which they have shown incompetence compromise general morale and cause resentment from those beneath them in the organization who perceive they are being kept from advancement by an incompetent.

• Create solo contributor tracks. Too many organizations with the “up or out” framework fail to recognize that not every virtuoso will make a good leader. Find a way to let them do their best work without having the additional duties related to leading others.

• Promote slowly and methodically only those who have demonstrated the skills and cognitive abilities to perform at the next level.

• Identify virtuosos at every level in the organization, and don’t lose sight of them as they progress through the pipeline. Star performers, by their nature, disrupt the perceived natural order of most organization. Sometimes incompetent managers resent them and withhold mentoring. If you find these stars working for an incompetent manager who resists developing or promoting them, as the senior leader, step in.

• Don’t promote for effort. Though laudable, effort alone doesn’t drive the business. Results do. Promote when you see results that exceed your expectations.

• Avoid developing an egalitarian organization. Senior leaders don’t have to start in the mail room. Virtuosos can frequently jump into advanced roles, even when they are new to the company. (Exception: In family-owned businesses, I encourage the owners to have their children literally start on the lowest rung of the ladder, often as summer workers while they are still in high school. When you stand to inherit the family company, knowing every level of the business makes sense.)

• Train people for new positions. Before they take on the title or promotion, have them shadow the current person. Hire them a coach who specializes in preparing people for promotion, have them enroll in formal training, or find some other way for them to learn the requisite skills.

• Use consultants or contractors for short-term, specialized projects. Training internal people for these kinds of situations wastes time and sets the person up for failure.

• Evaluate evaluators. Bosses promote or recommend their direct reports for promotion. Look at the boss’ track record. How many promotions have worked out? Some bosses who lack gold standards themselves simply can’t recognize gold when they see it. Stellar performers sometimes project. They think others figure things out as quickly as they do, even when no evidence exists to support the notion.

Hire for Talent; You Can Buy Experience by the Pound

A few years ago, I saw Moneyball, the blockbuster movie based on Michael Lewis’s best-seller Moneyball: The Art of Winning an Unfair Game. The movie has been successful for some obvious reasons, like America’s love of baseball and Brad Pitt. But I liked it for an imperceptible one. It illustrated the advice I’ve been giving clients for years: hire for talent; you can buy experience by the pound.

Brad Pitt plays Billy Beane, a one-time phenomenon who flamed out in the big leagues and who later went to work as the general manager for the Oakland Athletics. As the movie opens, the franchise faces the loss of their three best players. Because the team doesn’t enjoy the financial position of perennial favorites like the Yankees and the Red Sox, Beane realizes he needs to radically change how he evaluates what players can bring to the squad. Then he meets Peter Brand, the first and best talent decision Beane made during his journey to success.

Brand was a 25-year-old recent Yale economics graduate who specialized in sabermetrics, a scientific approach that uses objective, empirical baseball statistics that measure in-game activity.

Beane realizes Brand understands how to subvert the system of assessing players that’s been in place for nearly a century. However, as the duo begin to acquire less-than-first-round choices, they face stiff resistance from both the As’ longtime scouts and the team’s manager, Art Howe. They experience a bumpy start, but ultimately, Beane and Brand prevail.

Let’s look at the lessons for leaders:

• Like business leaders today, Beane faced severe economic restraints—chains that did not hinder his competitors. In 2002, The Athletics paid approximately $41 million in salary while competitors like the New York Yankees spent more than $125 million in payroll that same season. The team’s smaller revenues forced Oakland to find players undervalued by the market. Clearly, the economic playing field wasn’t level, so Beane needed new ideas. If he had embraced the traditional approach of hiring for experience, Oakland could never have maintained a competitive edge.

• Beane did not possess the talent to analyze players, so he hired Brand for his expertise. Most importantly, he took the advice he received from Brand.

• The current economic situation will not allow you to do what you’ve always done and get the same payoff. You, too, need a new approach to hiring the talent that will allow you to outplay your competition. Often you won’t have the budget for the most experienced player, but if you objectively analyze the talent you can afford, you too can win.

Teams that value sabermetrics are often said to be playing “moneyball.” Baseball traditionalists, in particular some scouts and media members, decry the sabermetric revolution and have disparaged Moneyball for emphasizing sabermetrics over more traditional methods of player evaluation. Nevertheless, the front offices of major league teams like the St. Louis Cardinals, the New York Mets, the Yankees, the San Diego Padres, the Boston Red Sox, the Washington Nationals, the Arizona Diamondbacks, and others have hired full-time sabermetric analysts. The general managers of these teams understand what I tell all my clients: Instead of paying top dollar for talent, get top talent for the dollars you pay. Ironically, virtuosos don’t work for pay, but the pay allows them to practice their passion. The paycheck is a scorecard and requisite part of the deal, not the deal.

Why the CEO and Not HR?

Until and unless you reach virtuoso status in your organization—meaning you have a critical number of virtuosos—you should expect that the B and C players will block the hiring and promotion of those they find threatening. Eventually the stars can overwhelm the mediocrity of C players in the succession process, but until then, CEOs, not HR, must stay actively engaged in the selection process.

It all starts with recruitment. The CEO must take over decision-making as it relates to policies, processes, and best practices. This will involve setting specific hiring goals and the requirement that only virtuosos—or those who show the potential to become virtuosos in the near future—can join the company in key positions. But it also involves putting recruitment squarely in the laps of the hiring managers. Encourage them to build their networks and to stay in touch with the exceptional performers in your industry. You all know who they are, and chances are, one of your people knows each of them by two degrees of separation. With the advent of LinkedIn and other social networks, keeping track of the best and brightest has never been easier. Then, require more accountability from your people. If you hold hiring managers responsible for the caliber of talent they bring in and tie their performance ratings and bonuses to these responsibilities, you’ll see instant improvement.

HR Won’t Hire the Talking Dog

A man shopping at a garage sale spies a sign above a dog: “Talking dog. $10.”

The man asks the dog, “Can you really talk?”

“Sure,” answers the dog.

“That’s amazing. What’s your story? Why are you being sold?”

“Well,” says the dog. “I recently returned from Afghanistan where I worked for the U.S. Army. Because I’m a dog, I was able to spy behind enemy lines. I’d then return to the base and debrief with the generals. Before that, I was in Iraq working for the State Department, reporting directly to Hillary Clinton. The Iraqi leaders didn’t notice when I’d slip into secret meetings, so I’d listen and then fly back to the Pentagon to debrief Secretary Clinton and the president. Then, I met my master, and he wanted me to retire and come live with him here. And now he’s selling me. I don’t know why.”

“Wow,” said the man. “Hang on, I’ll be back.”

The man returns to the dog’s owner, “I can’t believe you have a talking dog! That’s amazing!”

“Yup, it’s a talking dog all right,” answers the man, in a bored tone.

“Well, I’ll take him,” he says, handing the man 10 dollars. “But, I gotta ask. Why are you selling a talking dog?”

The man looks at him impatiently and replies, “Cause he’s a liar. He never even met Hillary Clinton.”

When I work with clients to improve selection or succession planning, I often encounter an inability to spot exceptional talent and a general unwillingness to hire those who embody it—usually because it doesn’t come tidily packaged. Instead of a decision-maker saying, “Wow! This is a talking dog! What else matters?” people start to examine the talent rubrics they created in some off-site meeting and evaluate the candidate according to the measures. My experience has taught me that there are four reasons for this behavior, reasons people don’t hire the best and brightest:

1. They simply don’t know what gold looks like, but they do know how to evaluate a person against the pre-set metrics. They wouldn’t spot a talking dog if it bit them before it spoke.

2. They feel threatened by the idea of hiring someone who might outshine them.

3. Status quo talent practices make them feel secure, replete with all the random metrics.

4. Star performers can be high maintenance—challenging traditional approaches, insisting on innovation and improvement, killing sacred cows, and generally making a nuisance of themselves. Average people are easier to manage.

I don’t advocate hiring liars, but I do challenge clients to avoid establishing arbitrary criteria in their hiring and promoting plans. Too often decision-makers focus on the wrong things, like subjective standards, experience, or conditions for a given job. These observations forced me to question whether most companies would have hired their industry’s equivalent to Steve Jobs.

As I mentioned in Chapter Six, Steve Jobs was not a model boss or human being, tidily packaged for emulation. According to biographer Walter Isaacson and most accounts, Jobs was neither typical nor particularly likable, but he did display talking-dog characteristics. A college dropout, Steve Jobs launched a startup in his parents’ garage that he built into the world’s most valuable company. Not always nice and occasionally not very smart, he was a genius—his imaginative leaps instinctive, unexpected, and magical.⁷ His insights came out of the blue, wherever that is. We will remember him as the greatest business executive of our era, and history will place him in the virtuoso hall of fame, but would your company have hired him?

Continuing to hire average performers won’t position you for a competitive advantage, much less an exceptional advantage. You’ll need to do more. If you want a Steve Jobs or a talking dog, you have to create an environment in which they can do their best work. Or, you can let your competition hire them. Your choice.

The Final Two Steps

Once the CEO starts taking more responsibility for the selection and succession-planning processes, the next step involves what I call “Culling the Cs.” That means you ask, and require your managers to ask, the “Two-Question Two-Step”:

1. Would you hire this person again?

2. Would you be sorry to see this person leave?

If the answer to either is “no,” you probably need to start the culling process. If the answer to both is “no,” you should start the process for replacing the person. Jack Welch, who in the annals of business remains the gold standard for identifying top talent, estimated he devoted one-third of his time to improving talent. I don’t know too many other CEOs who could make the same claim. But then, Jack Welch left a legacy unlike that of most others.

Conclusion

On January 19, 2013, St. Louis lost an icon, one of the greatest hitters in baseball, Stan “The Man” Musial. In 22 major-league seasons, all of them in St. Louis, Mr. Musial led the Cardinals to three world championships, won seven batting titles, and earned the National League’s most valuable player designation three times. He built a career, a brand, and a legacy—one that will live on in St. Louis, Cardinal, and baseball history.

Throughout the world of baseball, fans knew Musial for his unorthodox corkscrew-style batting stance. In St. Louis, we knew him as the premier ambassador of the game—our own favorite son. He lacked the flamboyance of some of his contemporaries, let alone the baseball greats of today. But he offered much more—a role model for leaders who want to leave a legacy.

Mr. Musial wasn’t flashy, big, particularly fast, or conventional in his batting. But he was the best Stan Musial we’ve ever had. He didn’t raise the bar; he set it. He showed us that legacy-making takes talent and the ability to consistently deliver exceptional performance. Even injured, he played the game full out, explaining, “There may be someone there who’s never seen me play before.”

And he was a nice guy. Always ready to sign autographs for the kids or to greet fans with his low-keyed “Whattayasay, whattayasay,” Musial carved his own place in St. Louis history during a time when we were known for shoes and beer.

Musial walked to the plate with one thing in mind: do the job. I have shelves lining the walls of my office, each definitively defining the salient traits of leaders. Mr. Musial offers a simpler explanation. Consistently deliver superior performance, and be a person people respect. Deliver superior performance for the clients that already support you, but even when you’re injured, play your biggest game in case a new client has never seen you play before.

We understand legacies when we’re discussing baseball, but we have a harder time articulating what we mean when it comes to business. People like Jack Welch knew what he had to do to align his stars, to position his company for growth, and to create the atmospheric conditions that allowed his stars to shine. He didn’t set out to become a star himself; he fashioned a company that set a gold standard for the industry. That’s the kind of legacy that will draw the best from your brightest.