Over the last 27 years, I have spent the majority of my professional life as a serial entrepreneur. I have been a long time member and a speaker to YPO (Young Presidents Organization), EO (Entrepreneur’s Organization) TEC and Vistage. I have had countless conversations with friends over long bike rides or glasses of red wine about why some businesses grow and others do not. I continue to experience this 1first hand with the 22 Entrepreneurs that I personally coach today. The majority of Entrepreneurs are distracted by day to day activities and don’t spend enough time on the things that will truly grow their company.
Our role as leaders of our firms is to grow the company and protect the shareholders. Over the years as a CEO, I have learned that by focusing on 5 things and only 5 things, I was able to dramatically grow my companies and have seen my friends, peers & clients do the same. Here they are:
3. Right People in the Right Jobs
4. Key Relationships
As an Ironman, I learned the importance of having the right people in the right jobs. Having just completed my 7th Ironman event, my team has had a drastic impact on my performance and my ability to continue to get better as an athlete even as I continue to age. My team includes my triathlon coach, swim coach, personal trainer, physical therapist, acupuncturist and chiropractor.
In this inaugural issue, we will focus on one segment of having the right people in the right jobs. In an ideal world, all of our hires will come from trusted friends or employees of the company. This however is not reality for all hires. So how do you know if you have the right person in the right job? How do you eliminate hiring mistakes? How do you hire more people like your top performers? Do you wonder why your team does not get along? Do your projects get done on time? You can increase your probability of success through the use of assessments.
I have used assessments in my company since 1995. It gave me a great look under the hood at my existing team, helped me identify why some people excelled and why others did not. It gave me a great look at prospective employees before hiring them, dramatically reducing my turnover rate and costs of hiring and training. These instruments helped me identify why most of my top sales people exhibited the same behavioral traits and values. 70% of the top sales people in firms in the U.S. ranked the same value as #1. I want to know this before I hire them, not 6 months later. They helped me determine in advance whether somebody has drive and determination, is good at building relationships, their ability to multi-task, work as a member of a team or prefers working alone, whether they are good at systems and processes or are loose with details. They helped me understand who the best performers are in certain jobs so I could hire people with the same assessment values. An assessment measures their behaviors (how they do what they do) and their motivators (why they do what they do). I also like that they only take 15 minutes to complete and are inexpensive.
The Assessment Report not only defines unique behavior, but gives you an understanding of what motivates your employees for greater success. With this capability, these versatile management tools can be used to hire the right person, get employees off to a fast start, revitalize current employees, improve communication and build sound employee-manager relationships. Using assessments in your hiring process makes you more certain about your selection and decreases the risk of costly hiring mistakes. Ritz Carlton was able to reduce their turnover rate by 62% over a 17 year period with the use of assessments and by hiring more people like their top performers. This reduced training and turnover expenses by over $12,000 per employee, saving the company $93 million per year. Mercedes Benz had similar challenges with a 66% turnover among their 3400 sales people costing the company over $33 million per year. Top Mercedes Benz sales people sold an average of 222 vehicles during one year compared to all Mercedes Benz sales people who sold an average of 89 vehicles per year. Those studied through a benchmark process delivered 2.5 times the results when compared to all sales people nationwide. The bottom line is that these tools make a difference!
Computers Have Manuals-Why Not People? The key to successful team management and team growth is knowledge of each person’s unique behaviors and what motivates those behaviors. With this knowledge, people can be effectively coached by maximizing strengths to achieve the organization’s goals. Apply the results of the assessment report to create improved morale, increased productivity, personal development plans and win-win situations for everyone.
Featured Image Credit: http://www.flickr.com/photos/sillygwailo/