Building a new business comes with a lot of uncertainty, but there's one thing companies can do to make the odds of survival as favorable as possible.
In this podcast, we talk with lecturer Jeff Hyman about how to identify, attract, and retain rockstar employees. Then we talk with Bernie Banks, Kellogg’s associate dean for leadership development and a retired brigadier general in the U.S. Army, about how to develop leadership talent from the ground up.
Jessica LOVE: Building a new business comes with a lot of uncertainty—your business model may be untested, you haven’t been around long enough to build a reputation, and being new to the scene often means you are working with a tight budget.
But Kellogg School lecturer Jeff Hyman says there's one thing companies can do to make the odds of survival as favorable as possible.
Jeff HYMAN: If I can recruit the best possible people, it is my competitive advantage. It's more than technology. It's more than branding. It's more than raising the most money. If I can put the best people on the field, I'm going to win the game.
LOVE: But as anyone who has tried to recruit candidates knows, luring rock stars to your company is no simple task.
And once they join you, keeping them around and performing is a different puzzle altogether, as Bernie Banks notes.
Bernie BANKS: Individuals routinely leave organizations because they don't feel as if they're challenged enough. When they ask for more challenge, organizations fail to think creatively about how they might provide it.
LOVE: Welcome to the Kellogg Insight podcast. I’m your host, Jessica Love. Today our producer Fred Schmalz talks to Jeff Hyman about how to attract “rock star” performers who can make your company shine. Hyman is an adjunct lecturer of management and organizations at Kellogg as well as the chief talent officer at Strong Suit Executive Search.
In our second segment, Schmalz talks to Bernie Banks, Kellogg’s associate dean for leadership development and a retired brigadier general in the U.S. Army. Banks takes a very different approach to filling your organization with rock stars: developing them yourselves—which can sometimes mean taking a chance on people who might not be rock stars—at least not yet.
Stay with us.
Fred SCHMALZ: In the last 25 years, Jeff Hyman has hired more than 3,000 people. He’s made a career out of identifying top-performing employees who consistently outshine others in their vision, dedication, and productivity.
These “rock stars,” as Hyman calls them, perform in the top 5 percent of people available at a given pay range. How significant is that? Well, according to Hyman, rock stars are several times more productive than the average worker.
Okay, sounds great. But how do you find someone like that?
Hyman says it begins with thinking about branding. Not product branding or customer branding. But branding your company as an outstanding employer.
Take Google and Deloitte, for example.
HYMAN: Google's employer brand is all about we hire wicked smart people.
Other companies are all about a fun work–life balance experience.
Deloitte has done a great job branding themselves around the career path and the variety of challenges that new employees are going to have as they join, right?
You need to really think about and hone a differentiated positioning for your employer brand, and that will be compelling to the right people. For the wrong people, they will opt out.
SCHMALZ: Part of that positioning lies in writing compelling job descriptions for every position at your firm.
Forget the bullet-point list of requirements stating that your ideal candidate has a particular degree and X number of years of experience. All those do is weed people out.
HYMAN: You want to weed people in.
It's more of a job invitation. We're inviting you to have a confidential discussion with us. Make it focused on the company, the industry, the opportunity. Don't narrow the funnel by having a laundry list of requirements. You'll get to that in the interview. God forbid you have so many candidates that you got to talk to in a job market like this—that's a high-class problem.
SCHMALZ: In addition to weeding people in, you may want to rethink your interactions with candidates. Interviewing candidates is fine, but don’t count on the interview all by itself to identify a potential high performer.
First of all, Hyman says, taking what candidates say at face value isn’t always that helpful. Many people will promote themselves during interviews—often to the point of straining the truth—trying to make themselves seem like rock stars even if they aren’t.
Second, interviewers are susceptible to their own confirmation biases. It’s easy to decide within the first few seconds of meeting someone that they are or are not a rock star, and then spend the rest of the interview looking for evidence to confirm your opinion.
And third, most business leaders are not that well-versed in interviewing—much less in conducting a consistent set of interviews for a pool of candidates.
HYMAN: Most interviewers conduct an unstructured interview. They pick a bunch of questions randomly from the air. They're not in any kind of sequence or structure, and they wind up with a mishmash.
The end of that interview, you don't really know that much more than when you started.
SCHMALZ: So Hyman recommends putting less emphasis on questions and answers and more emphasis on what candidates actually do. Namely, he suggests test-driving candidates by having them complete an exercise that simulates the kind of work they’d perform at your company. That’s where you’ll learn if a candidate truly has the potential to be your next rock star.
Once you find your rock star and are ready to make an offer they won’t refuse, it’s crucial not to skimp on salary. While money isn’t the main motivator for high performers, it can both attract them and signal to them that you value the contribution they will make.
But every company has a ceiling on what they can pay and how many people they can bring on board. Hyman has some advice on how you get the most bang for your buck when hiring.
HYMAN: Rather than hiring a big team and paying average because you have a fixed amount of money that you can afford to pay, divide that amongst a smaller number of people who are absolute rock stars, hugely productive, and you'll wind up paying the same amount.
I always tell my clients, hire three rock stars, pay them like eight, and you get the result of 10.
SCHMALZ: But do you really need all those rock stars? Can’t you get away with hiring a few, you know, backup singers?
Not according to Hyman.
HYMAN: I don't understand business leaders who say, "I'm going to get a couple of rock stars and then surround them with those B players, those people who just make the work happen." I don't understand that mindset. I think that's very dangerous, I don't think you ever have to settle. When you do, your other rock stars take note, and they're more and more likely to leave. They become resentful because you've lowered the bar. Rock stars want to work with rock stars. They aspire to challenge. They aspire to greatness. When you assemble that team, you get much lower attrition, it’s much easier to recruit your next rock star, and it starts to spiral in the upward direction. It doesn't take much to start to spiral down when you let B players on the bus.
SCHMALZ: Any organization can benefit from an injection of new talent. But what about companies that want—or need—to develop their own talent?
Over the course of more than 30 years as an officer in the U.S. Army, Bernie Banks, now an associate dean for leadership development at Kellogg, has learned to take a very different approach to talent.
His approach is built on the idea that if you’re a leader, your job is to develop other leaders. And the best way to do that is to look at each and every member of your team and figure out how to grow them into a high performer.
Banks refers to this as “betting on everyone.”
BANKS: The military inherently understands that they are trying to build capability in their people every day because they don't know what their people are going to be exposed to on any given day. And so this notion of: you bet on everyone, you provide immersive experiences, you have challenge, you deal with setback, you engage in reflection, you try to figure out what constitutes smart risk, those are all things that are very much part of how the military approaches developing talent within its ranks.
SCHMALZ: Banks points out that for many organizations, including the army, investing in the team you have—instead of worrying about the team you want—is the only way to ensure that your team is capable of doing what it needs to do.
BANKS: You have to try to make them into the most capable person they can be because tomorrow you might be presented with a threat where you don't have the luxury of saying, "Well, hold on, I'm going to go hire X, Y, or Z."
SCHMALZ: This is where you might be thinking, “Investing in everyone sounds like a great idea. But who has those resources?”
The good news is that, according to Banks, the only resource you need is time, and maybe not even that much of it.
BANKS: Fifteen minutes of having the right conversation can save you 15 hours of a person behaving in a manner that's not consistent with how you would have them behave.
It does not mean that everyone will become an outstanding or amazing leader, but if you add up all those small investments, the aggregate across an organization can be massive.
SCHMALZ: But there’s another strategy that may make some managers uncomfortable:
To create a culture in which everyone is a potential rock star, you also have to be willing to give opportunities to people who aren’t that experienced.
This is something that younger companies will sometimes do—because they have no choice. But more established companies often wait too long to give new performers the chance to step on stage.
BANKS: Instead of saying, "Hey, we're going to put you in when you have probably 70 percent of the competencies required for this role, we'll wait until you have 90 percent." That's just wasted time for that individual. They're still progressing, but they're not progressing as fast as they could.
SCHMALZ: Of course, it’s a risk for the company to let a junior person take on a big challenge. This is where Banks stresses the importance of distinguishing smart risk from dumb risk.
BANKS: Dumb risk is when somebody is not within striking distance of what is required, so instead of having 70 percent of the capability, they have 30, 40 percent.
Smart risk is when you say, "Hey, somebody probably has 70 percent of the capability necessary to blow this experience out of the water, and we're going to provide them the resources and the support structure such that they can fill in their gaps through the talents of others." We put them into this context where if, in fact, they don't achieve total success, we can absorb that setback.
SCHMALZ: Leaders also have to weigh the risks of not acting. Banks finds it shortsighted when leaders refuse to think beyond promotions.
BANKS: They think in terms of, "Well, we don't have an opening to take you up to the next level" of whatever role you're looking at, as opposed to saying, "I don't have to promote you to provide you a challenging experience. Are there ways in which in your current role I can give you new challenging opportunities that you value?"
SCHMALZ: One way to support younger workers while they take on new challenges is to have them head a team that includes a more experienced colleague. That way, the younger worker gets the chance to be in charge, and the more experienced one is there to support them.
BANKS: But that takes a culture that recognizes that it's not just about formal title and being in charge, it's about how do I provide the right set of experiences to maximize the developmental potential that exists within the firm. Not everybody's culture can do that.
SCHMALZ: Let’s say you do give someone the chance to prove themselves. There will be times when they take a smart risk and stumble. Leaders have to let their teams know that their setbacks are not going to cause them to automatically be cast aside.
BANKS: In a world where people are under intense pressure to perform every quarter to a certain standard, embracing that notion that failure is a necessary part of the pathway to success can be very difficult. Companies say all the time, "Fail fast, fail forward, we want you to take smart risk, we want you to be innovative." Yet when you examine what they actually measure and reward, risk-taking is not part of it, but it's absolutely essential if you're going to grow the capabilities such that somebody can ultimately have a shot at one day progressing to the C-Suite.
LOVE: This program was produced by Jessica Love, Fred Schmalz, Emily Stone, and Michael Spikes. It was written by Anne Ford.
Special thanks to our guests, Jeff Hyman and Bernie Banks.
You can stream or download our monthly podcast from iTunes, Google Play, or our website, where you can read more about attracting and retaining high performers. Visit us at insight.kellogg.northwestern.edu. We’ll be back next month with another episode of the Kellogg Insight podcast.