The Agile Scaleup

Trumps Harvard

"...keeping you great" Ten Minutes with the Growth Guy

HEADLINES:

Trumps Harvard -- we had many experienced CEOs and executives that have been through the Harvard negotiation courses (purportedly the best) who raved that Dr. Victoria Medvec's (Northwestern University) detailed 10 step process for handling complex negotiations clearly trumps anything they had learned before -- she is the Jim Collins of Negotiation, backing up her approach with solid research and "in-field" experience since she's often the chief negotiator on multi-million dollar deals. She was the opening four hour workshop this week at the Sales and Marketing Summit -- following is a summary of top ideas from the faculty:

Name price first! -- There are six steps that must occur before you name price first. However, what is clear from the research is that whoever names price first achieves one key objective -- strengthening the relationship instead of damaging it. By letting the other person name price first, in most cases what you're countering with is subtlety saying "that your product, service, business, etc." isn't worth what you think it is -- and for many this can be downright insulting. By offering price first, you put the other party in the position of countering. This is very, very important and the opposite of what most of us were taught.

Make offers face-to-face or via phone -- NEVER send in your proposal via email, fax, or mail. First, this prevents you from being rejected outright without the ability to defend your proposal. Second, synchronous communication lets you gauge reactions immediately and make adjustments if necessary. Third, pushing for all synchronous communication (face-to-face or phone) can shorten lengthy negotiations from months to days -- again, she has the real world experience and research. And she showed us how to get around the purchasing agent, even   when the RFP explicitly states you can't talk to anyone but the purchasing agent.

Reactive vs. proactive service -- Randy Schwantz, author of The Wedge, drove home the point that what most of us call "great service" (which is generally a key differentiator when you're not strictly the low price competitor) is really just reacting to customer issues as they come up i.e. "hey, if it breaks we'll fix it in 24 hours, etc." What we need to do is bundle all these "service" pieces into a proactive service offering, give it a name like "Gold Service" and use it to truly differentiate our offering from the competition.

Challenge sales candidate in first interview -- Dave Kurlan, CEO of Objective Management (for 30 years the leading sales organization assessment tool used by professionals around the world), emphasized the importance of making the first interview with a potential sales candidate a challenging event i.e. act like the kinds of customers they will encounter on first sales calls -- rushed, making them wait, not overly friendly, guarded -- and see how they react in the first five minutes of the interview (great sales candidates will figure out what you're doing and actually enjoy the challenge). The second interview then is the "good cop" interview. He suggested renting the movie "Antitrust" and watch the great recruiting scene.

iPhone will ultimately fail -- Laura Ries, author of "Branding," made a strong case for why markets diverge instead of converge, giving growth firms the opportunity to pick new niches within a specific industry i.e. within   technology, something IBM used to own in total, Microsoft now owns the operating   system, Dell/HP the PCs, Oracle the databases, and IBM just services. Thus she predicts the iPhone will have limited success. Like her, I see business people with a phone, PDA, and iPod because each does its job superbly whereas combo units (note the death of TV, DVD combo units) have to sacrifice key aspects to integrate.

The answer is yes...now what is the question? -- John DiJulius, author of "Secret Service," wowed us with his motivational presentation style while delivering concrete substance on driving superior service. We walked through an exercise where we outlined several key situations in our businesses where we're tempted to say "no" and how our teams should handle without saying "no." I loved the Disney example where a child that was a ¼" too short to get on a ride, but had waited in line for an hour (despite the   various warnings about height restrictions) leaves the ride operator in a huge bind of having to say "no." Instead, they are instructed to give the child a certificate that lets them cut to the front of the line the next time they visit Disney and are tall enough. How much is that child going to bug their parents to come back to Disney!!! Brilliant solution. You can find similar solutions in your business.

2008 Sales and Marketing Summit -- next year's Summit, with a whole new faculty, will be April 22 -- 23, 2008. We've not picked a location, but you can lock in the dates. And so many of the CEOs attending, like always, wished they had brought more of their team. Hope to see you teams next year   and this fall at our Growth Summit October 23 -- 24 in Las Vegas.

Billionaire Advice

 "...keeping you great" Ten Minutes with the Growth Guy

HEADLINES: (what I learned up at MIT this week)

Radical change requires radical stability -- Robert "Jake" Jacobs was our first presenter in the Advanced Business Program I chaired up at MIT. He explained "why" the Rockefeller Habits of meeting rhythms and quarterly themes are so important. They provide a kind of stability that most employees need if they are to deal with the change leaders of growth firms are often thrusting onto their organizations. This is why it's said "if you want to move faster, pulse faster." The more you change, the more stability you need.

Use paying-labor vs. paid labor -- Jim Gilmore, author of "The Experience Economy," suggested we all think of things in our business where we could get people to actually pay to do some work for us (THINK   -- working dude ranches and Dennis Tito paying $20 million to fly into space). In fact, there's a company called Vocation Vacations where you pay to work i.e. as an evening bartender in a British Pub for a week. Gilmore himself uses paying   labor to help organize their annual "ThinkAbout" event. Here's a link to more info on paying-labor including a link to Gilmore's article on the subject -- what about having people pay a contest fee to submit their designs for your new packaging?

99% of processing time is wasted -- Guy Parsons, co-founder of the Lean Institute, delivered a fast-paced workshop on applying Lean to all our companies -- the Toyota method we must all use so we can double revenue with the same number of people. Two key tools are Value-Maps and a one-page   form called A3. Value-Maps let you document that a billing process that takes three days might only have 14 minutes of actually labor being performed -- the best Value-Map booklet is "Learning to See" by John Shook -- here's a link to learn more and purchase --

"Rocks" or Priorities need more detail -- the biggest criticism I receive about the One-Page Plan is that there needs to be some additional worksheets to help people flush-out the details behind their individual "Rocks" or Priorities. I've found the answer!!! Its Toyota's A3 one-pager (named after the European equivalent of an 11 x 17 sheet of paper -- the same as the One-Page   Plan). Here's a link to see a completed A3. In addition, here's a link to templates and info about A3s -- stay tuned for more info

Why Toyota might lose -- Jim Womack, co-author of the original book about Toyota "The Machine That Changed the World" which was just re-released, wrote a piece on Toyota and why they might lose -- if you read just one article this week, read this one -- it's below under DETAILS (reprinted with permission).

Scarcity focuses the mind -- Evan Chrapko co-founded one of the top technology firms in Canada, DocSpace, selling it for almost $600 million. They turned down an offer of $12 million for the company when they barely had enough food to eat. The VCs visited their home furnished with furniture from   dump heaps and walked past the garden where they were growing some vegetables. When the VCs asked "but don't you need the money" his answer was "we can live like this forever." Side story -- one of the MIT participants is funded by one of the top VC firms in the U.S. His BMW had broken down, so he borrowed his mothers old Acura. He still has it years later. When the VCs visited him, he took them around in the Acura and saw him have to open his door to pay tolls since the drivers-side window doesn't work. The VCs were impressed. All his time and resources are directed at the business.

Alex d'Arbeloff, co-founder of multi-billion dollar Teradyne, concluded our executive program with a very simple piece of advice. In the 37 years he built and operated Teradyne he would pick one specific project each year that he would spearhead -- a pet project he thought would help take Teradyne to the next level. Looking back, it was these specific projects that had tremendous impact. What is the one personal initiative you're going to spearhead in your firm? This is often different from the #1 priority for the company. For me, it's writing another book in 2007. Last year it was recruiting Patrick Thean to run Gazelles.

DETAILS:

Latest Note from Jim Womack, founder of The Lean Institute:

Simon & Schuster has just re-issued "The Machine That Changed the World," which Dan Jones, Dan Roos, and I co-authored 17 years ago. Doubtless, our publisher has noticed the current Toyota boom when any book with "Toyota" on the cover sells.

Fortunately, Machine is still the best description of the complete Toyota business system - product development, supplier management, dealing with the customer, fulfilling orders from raw materials through production, and management of the global enterprise. It still has a story to tell. As new CEO Alan Mulally remarked to Ford employees when he arrived in Detroit last fall, it is the best summary of why Toyota is winning.

But in fact Toyota has already won. It's just a matter of totaling units sold and revenues during 2007 to know exactly when to transfer the industry leader's jersey from GM to Toyota. Much more important from a business standpoint, Toyota won the profitability race years ago.

The interesting question for the future is not the precise day Toyota wins but how Toyota can lose. The conventional wisdom is that it may fumble on quality (as evidenced by recent recalls) or go soft on costs or stumble in trying to make Lexus a truly elite brand or fail to gain a stable production and sales base in the emerging markets of China and India.

And these could happen. But if they do they will be symptoms, not the root cause. Toyota's real challenge for the future is to introduce and sustain lean management and lean leadership at every point in a rapidly growing organization.

It's sobering to realize that many new employees at Toyota read Jeff Liker's "The Toyota Way" and Jeff and Dave Meier's "The Toyota Way Field Book" (which every lean thinker should read as well) to try to understand the company they have joined. Toyota's traditional way of creating managers by hiring them straight from high school or college and carefully coaching them over many years to become seasoned Toyota-style leaders is being severely strained by Toyota's breakneck growth rate. There are too many new pupils and not enough mature teachers as Toyota opens new plants, engineering centers, and supplier development groups across the world.

Toyota's great risk, the way it can lose, is that its new managers and the managers in its new suppliers will revert to the old, mass-production mentality of the companies or schools they have come from. If this happens, Toyota's management performance will regress toward the mean. Instead of moving the whole world to embrace lean management, Toyota will become just another company. And that will be a tragic failure for us all.

What does Toyota need to teach its new lean managers? Obviously, the specific methods (tools) for conducting production, product design, supplier management, and sales are important. But these are the easy part. The heart of the lean manager's knowledge is strategy deployment originating with senior managers, A3 problem solving for line managers in the middle of the organization, and standardized work for primary supervisors near the bottom.

And at every level Toyota needs to teach its managers to utilize these concepts by going to the gemba. There, they need to lead by asking questions about the true business problem, the current condition causing the problem, a better condition (that is, a better process) that could address the problem, who must do what when to achieve this new condition (the future state), and what evidence will show that the problem has been addressed.

This means managing the organization's value-creating processes (value streams) by asking highly informed questions rather than managing results at the end of the reporting period. (The latter is simply another form of end-of-the-line quality inspection.) And it means avoiding a resort to orders on what to do next when matters seem to be getting out of hand.

Issuing crisp orders is the natural instinct of any boss. Indeed, most bosses seem to think that by virtue of their experience and authority, they should be able to solve any problem lower in the organization. But orders from the boss rather than informed questions take away the lower-level managers' responsibility for solving problems. They start a vicious circle in which lower-level managers wait to be told what to do by higher-level managers who are much further from the gemba where value is created and who inherently have less - not more - knowledge of the best thing to do.

Compared with the rest of us, Toyota has one major advantage. It never acquires companies or facilities. It expands by opening "greenfield" operations in new locations. So if it finds that it can't grow lean managers at the same   rate as sales it can simply slow down. And my bet is that Toyota will slow down if it senses that its management values are being diluted.

The rest of us face a harder problem. We already own and operate "brownfields" that urgently need a transformation in their management. Slowing down this transformation simply makes us fail faster!

In summary, Toyota can fail and if it does the root cause will be a failure to propagate its management system. We can also fail. And if we do the root cause will be a failure to transform our outdated mass-production approach to management. Thus it turns out that we all face the same challenge!

It follows that all of us in the Lean Community need to learn from each other about the best way to create lean managers and lean leaders. I'm happy to report that sharing our experience will be a key objective of the Lean Enterprise Institute as we begin our second decade next fall. We don't want anyone to fail.

Best regards,

Jim

Jim Womack
  Chairman and Founder
  Lean Enterprise Institute

P.S. For years -- and again in recent weeks as I have been speaking at lean conferences in Australia -- readers have come up to me to say that "Machine" was a great book about factories. And I hope this is true. But anyone who says this didn't understand the book. "Machine" is about factories and it is also about manufacturing more broadly. But it's much more important contribution is to describe for the first time a complete, lean business system, a new way of managing multi-function organizations that is relevant to any organization creating any type of value.

I'm hopeful that original readers will now give "Machine" a fresh look and that a new generation of readers will discover the book and read it for lessons on lean management going far beyond its lessons for lean production. Dan, Dan and I have written a new Foreword and Afterword for the re-issued book   to place it in historical perspective and to describe what we've learned in the years since it was published. And I autograph every copy from our web-based   bookstore at www.lean.org. Feel free to forward this message to suppliers, customers, or colleagues who are implementing lean - or should be.

If this e-letter was forwarded to you, visit LEI <http://www.lean.org> to subscribe. Just click the "Join" button on the right to get a free subscription and access to all the valuable content about implementing lean principles in production and service value streams.

The Three Most Important Pages Ever Written In Business

 "...keeping you great" Ten Minutes with the Growth Guy

HEADLINES: (Theme -- the "Council")

NOTE: Following is my latest "Growth Guy" syndicated column entitled "The Council: The Three Most Important Pages Ever Written in Business" -- please take ten minutes and scan the article -- thanks.

The three most important pages ever written for business leaders are pages 114 -- 116 in Jim Collins' landmark book Good to Great. It's a bold statement, but I've seen the transformational impact on leaders and their growth companies when the concept on these pages is implemented.

It was key to putting $160 million in Richard Kay's pocket; it's been critical in helping Brian Scudamore manage the growth of one of North America's top franchises; it repaired Lance Pederson's executive team; it aided Lee Prosenjak in designing their new dance studio and Scott Mesh in solving   a major staffing problem; it helped Larry Weinberg win two prestigious national awards; and it's already brought Nick Arrigan closer to his children.

This simple concept even underpinned one of the most successful U.S. college football seasons for a rookie coach in 2006 and was something that drove the success of the wealthiest entrepreneur of all time. What Collins outlines on these three pages are the eleven characteristics of what he calls "the Council."

Unlike the standard executive or management team meeting that's a weekly staple of most companies, this additional meeting is aimed solely at giving council to the CEO. It's not about consensus building; it's about generating "talk time" in an era when executives have been driven to silence by technology and left to solve problems via email.

It's about generating conversations around what's vital to the success of the business and helping the executive team discover and face "the brutal facts" as Jim Collins so aptly describes in Good to Great.

Structuring Success

"Players that shoot foul shots the same each time, make a lot of shots," notes Richard Kay, co-owner of the NBA Washington Wizards and founder of OTG Software. "The same in business. I felt my most important job was creating a consistent structure for being successful."

And successful they were. Launched in 1992, Kay's data management software firm grew to 450 employees with 12,000 customers, including more than 1,000 credit unions and over 500 hospitals. Going public in 2000, OTG was acquired by Legato in 2002 for $403 million, of which Kay owned 40%. Legato was then acquired by EMC for $1.3 billion while Kay was on the board of directors.

Underpinning this success was a simple meeting and accountability process that started with a 7am breakfast every Monday morning, including most Monday holidays, at the Bethesda Marriott Suites across from OTG's offices in Maryland. From the day Kay started OTG until the day it sold, he and his executive team stuck to this routine.

"The reason we met so early on Monday was we knew we were up against a lot of smart, well prepared competitors," recalls Kay. "This early start to the week motivated us to prepare and helped us generate excitement as the company grew. And some of the best conversations occurred on the walks over and back from these meetings."

Following Kay's "council" breakfast were a standard set of management, sales and marketing, software development, and finance/accounting meetings that often took the executive team (and department heads as they grew) through to lunch.

The key is that they had this additional breakfast meeting that was more open ended, giving the top team a chance to talk through the challenges facing the company every week. I sat in on some of these meetings and observed as Kay's team would debate, laugh, discuss, decide, and most importantly, talked openly and candidly with no set agenda. The more tactical issues were then handled during the follow-on functional meetings.

The STORM

1-800-GOT-Junk? is one of the fastest growing franchises in North America, adding 110 of their 315 franchisees in 2006 alone. Key to driving and managing this growth is a weekly 3.5 hour STORM (STrategic Operational Review Meeting) attended by a nine- member Leadership Team -- CEO, COO, CFO, VP IT, VP Strategy, VP Operations, VP Call Center and Director of People.

"We meet to engage in dialogue and debate focused on our Strategic Plan," explains founder and CEO Brian Scudamore. "We'll discuss and debate opportunities 6 months to 3 years out, a lifetime when your business is growing rapidly. We really try not to argue to be right but debate to really ensure we all get our fears and worries out on the table."

"Sometimes the discussions just continue to further align us in our goals and strategic opportunities facing the company. We have a set of Norms that we try to follow and respect to make the meeting as productive, focused and respectfully contentious. Considering the level of debate there is a ton of   respect too."

"The cool part about this STORM meeting is that we never get into any other issues. It's always strategic. If we have more tactical or urgent issues to discuss they are always held at other times," concludes Scudamore.

What Scudamore and his team understand is that if you want to move faster you have to pulse faster. Whereas most teams moving as fast as Scudamore's would exclaim there is no way they can take this much time each week to meet, Scudamore knows that the strategic issues must stay top of mind and be continuously tweaked.

Executive Team Health

Pat Lencioni, author of the best seller Five Dysfunctions of a Team, emphasizes the importance of a team being both Smart and Healthy -- Healthy defined as having a level of trust and understanding that allows conflicts to surface among the team members.

"The state of our relationship as a management team wasn't very good," describes Lance Pederson, CEO of Oregon-based Convergence Networks. "I think secretly each of us had issues with one another in more ways than one."

So starting in January of this year, Pederson, his business partner, and the VP of Sales and Marketing started meeting every Thursday morning at 6:00 AM at Sheri's, a local breakfast joint near their offices (they've recently switched to Friday mornings).
 
"At first I would say that our conversations weren't the greatest but we kept showing up each week," explains Pederson. "Eventually what started to happen was that we began to talk more and more about the future of the company and the things that we would like to see happen."

One recurring topic was how they would be able to bring on five new employers a day. "This is when I finally understood the term ‘blue sky' -- some of the things you come up with are pretty wild but if you can pull them off they would totally work," recalls Pederson.
 
The team then started to spend more time just talking about one another when they were younger and the crazy things they did. Lencioni has emphasized the importance of team members doing just this to develop a deeper level of understanding and trust.

"We would talk about our families and stuff like that," notes Pederson. "Now for most that probably doesn't sound like a big deal but I just so happen to be one of those guys that is pretty much dead serious all day long at work." The informal breakfast setting worked out better for Pederson because he didn't feel pressure to have to discuss strictly business -- he knew that his team would have time to cover the tactical issues of running the company in a more formal meeting later on in the day.
 
"I could go on and on at how beneficial it has been for us, but the bottom line is that we are more connected as a management team in every facet. We no longer spend countless hours debating the semantics of a point. We accept each other for who we are because we know each other at a deeper level than we previously did," explains Pederson.

"As we all know running a great company starts at the top. If your management team isn't on the same page then the rest of the organization doesn't stand a chance."

Major Decisions

Lee Prosenjak, founder of Colorado-based Cherry Creek Dance, started his Council October of 2006. Rotating breakfast places Friday mornings at 7:45am so they don't get bored with the menu, they'll often bring in an expert to help facilitate the discussion.

"We invited in a real estate broker one morning when we knew we were going to talk about where to move our location," explains Prosenjak. "The whole team was then a part of the planning process, engaging in a blue sky conversation to design the perfect new space. In speaking with the broker afterwards, he walked away with as much from the discussion as we did from him."

Scott Mesh, co-founder of Los Ninos, a New York-based provider of early childhood services, has tackled similar big issues at their Friday lunch meeting. Separate from their Monday morning management meeting, though with the same management team, the purpose is to dig into one topic deeply a bit more informally.

"The goal is to get to the bottom of big hairy problems," notes Mesh. "For instance, last summer we lost five case managers over a change in their Service Coordination (SC) Plan and compensation plans. That got our attention!"

Mesh used their Friday lunches to talk through and reexamine every aspect of the compensation plans, core values, and management of the staff and decided to create a new Senior SC position. This new position provided an additional salary step with added responsibilities, allowing Los Ninos to "hire up"   and provide a career path for their existing SCs.

"Morale turned around 180 degrees," beamed Mesh. "And we're growing significantly again. Many of the issues facing our firm need significant talk time, which you have to schedule or it just doesn't happen."

Longer Sessions

Larry Weinberg's executive team has had lunch every Monday for the past several years, following their management meetings. And he credits these luncheons to why his McLean, Virginia-based firm, BOWA Builders won National Remodeler of The Year in 2006. These meetings were also critical in designing and maintaining the kind of work environment that led to Weinberg being named one of the "Best Bosses" in the U.S. by FORTUNE Small Business magazine in 2005.

In fact, they've found the informal strategic discussion time so valuable that they no longer consider lunch once a week enough. "With the pressures of the day and the interruptions of the waiter, we sometimes come away frustrated," notes Weinberg.

As a result, they started scheduling quarterly CEO council retreats. "Sometimes we combine them with an industry conference or an educational event. Two of the retreats are just all day talk time away from the office," explains Weinberg. "It's too numerous to describe all the concrete ideas we've hatched   during these sessions -- just know they've been crucial to our success."

A Long Walk

For Nick Arrigan, Senior Account Manager of New Jersey-based Vega Consulting Solutions, the idea of the leadership "council" spurred him to start weekly walks with his children individually. Recalling his first week, Arrigan shared "it was like a typical sappy Broadway review. We laughed, we cried, it was amazing."

It was another weekly walk that was behind the successful first season for Bret Bielema, coach of the Capitol One Bowl Champion Wisconsin Badgers college football team. Following in the footsteps of the legendary Barry Alvarez, who took the Badgers to eight bowl wins in 16 seasons, all eyes were on Bielema, the second youngest coach in U.S. college football.

Though Alvarez and Bielema talked frequently, every Thursday Alvarez and Bielema took a scheduled hour and half walk. Noted Bielema, in a Wisconsin State Journal interview "During the season, it was about games that weekend, matchups. I'll usually go in there with a couple thoughts, questions to bounce off him about the direction of the program. We've really become good friends, more than anything else."

And when Alvarez asked if it was OK if he missed the Capitol One Bowl game, since he was doing color commentary for the Fiesta Bowl on the same day, Bielema responded affirmatively, so long as they still did their Thursday walk -- which was scheduled on a Saturday to keep it two days before the game like in the regular season.

Now that's sticking to a routine!

I hope the pattern of success is apparent. Like John D. Rockefeller's daily luncheon with his directors, getting regularly scheduled talk time is crucial to the success of your company. Locate your copy of Good to Great and get a "council" in place.

 

150 Candidates Line Up for Aquire

 "...keeping you great" Ten Minutes with the Growth Guy

HEADLINES: (Theme -- sourcing employees)

Sourcing employees article -- Mike Frommelt, Principal and Co-Founder of KeyStone Search (and new EO member) authored an excellent and short article on sourcing employees -- complete article under DETAILS below -- take five minutes and scan this article. Thanks Mike.

150 deep at booth for job fair -- Lois Melbourne, CEO of Acquire, participated in a MBA summer job fair and had candidates lined up 150 deep. Corporations like Wells Fargo, TI, Bank of America and others kept coming to her booth and asking "who are you guys and what did you do???"

Inspired by Trench Safety -- a while back I shared Trench Safety's recruitment brochure. Based on their brochure, Melbourne designed one for Aquire -- here's a link to download a copy.

Best Places to Work in Texas -- noted Melbourne, "We did no advanced marketing prep for the job fair. The students had done web research on the company prior to the job fair (as any candidate we would consider hiring does these days). On the web site they found two things they said impressed them: 1. our customer list; 2. our award for "Best Places to Work in Texas" -- here's a link -- this is why it's   important to apply for these awards!

"Remarkable" word of mouth -- "At the job fair we started handing out the brochures to the candidates we spoke to that really clicked with us. We started getting people coming to us asking for the brochure   and telling us it was impressive, which told us people were showing it off elsewhere in the lobby or in the job fair," described Melbourne.

Bragging rights -- concludes Melbourne "I believe this type of positioning will be more and more important to the newer generation of workers coming on board. They want to respect their employer and what to be able to brag about the workplace environment."

Speaking of sourcing employees -- I'm going on my first tour of India: Mumbai, Bangalore, Hyderabad and New Delhi May 9 -- 14. I'll be leading one-day Rockefeller Habits public workshops hosted by Bob Potini with E Gen Solutions.

DETAILS:

Sourcing: The Missing Link to Great Hiring

All CEOs interested in growth aspire to fill their teams with "A Players". Unfortunately, despite the many books and articles on how assess and evaluate talent, hiring the best every time can still be elusive.
 
One key reason is the lack of attention, or lack of understanding, of one of the most critical pieces of great hiring: Sourcing. If you are not fishing in the right body of water, you will never land the trophy.
 
Like many things in business, good sourcing starts with the right mindset.

The Mindset:
Recruitment is a sales process, not a human resources process. Don't get me wrong, I'm not putting down the HR community. Certain HR types can make great recruiters, but they are generally trained to screen and assess, not source. Ask yourself this, "Is my HR person able (or even willing), to pick up the phone tomorrow, call one of our competitors, and solicit their VP of Sales to leave that company and join ours?" If not, you have a screener, not a sourcer. Recruiting is a sales function. It is the process of "selling" the vision of an organization, and convincing a candidate to "buy" (join the company). Because it is so similar to sales, an easy way to illustrate the recruiting process is through the 100 year old, tried and true "sales continuum". (diagram below).

For recruitment, the continuum represents the entire pool of "minimally qualified" candidates in any particular region or industry, for an open position.

Always available
On the far left are the people who are always ready to move. You know the types, 25 cents more an hour and they're gone, never been happy with any employer, no employer has ever been happy with them, etc... These are the first to apply when you put your feelers out. They scan Monster and Career Builder from their employer's PC and apply for your job, using the other guy's equipment. They will do the same thing on yours, if you hire them!

Never available
On the far right are the never candidates. You can't move them from their current position, even with a crowbar. They love their employer, have golden handcuffs, work two minutes from home, etc...

Maybe available
The middle section represents the maybes, the people who may move, if they are presented the "right" opportunity. This could be more responsibility, a better working environment, a chance to be a part of something really exciting,   etc. Every individual has their own hot buttons.

Where the A Players are
Studying the continuum, you will quickly see where A Players generally reside; Toward the right, closer to the "Never" category. Why is this? Put simply, these people are successful in their current companies. They may not be 100% happy, but they keep their nose to the grindstone, work hard to succeed, and are generally paid accordingly. Also, they are highly regarded by their co-workers, giving them a sort of "first among equals" status. Basically, everything you would love them to be in your company. These people do not scan the classifieds, or Monster, they work hard all week and spend their free time with family, significant others, etc... If they do become extremely unhappy, they simply take a few of the recruiter calls coming in regularly, and confidentially explore opportunities.

So, how do you get to them? The following are six ways to start sourcing more A Players.

1. Write "exciting" and "descriptive" ads -- Verne Harnish gives some great examples on how to do this on Gazelles.com, so I won't repeat it here, but do make sure you include information regarding culture and values. Good people move for culture, not money. Studies have shown that great people look for three things in their employer 1) "Where are we going 2) "What is our plan to get there" and 3) "How do I factor into that plan". If you can't paint a compelling picture of your corporate vision and culture while answering those questions, you will not be very successful in luring A Players.
2. Build a recruitment database. Let all employees know that the organization is committed to talent, and that you are always recruiting, even if you have no official openings. Any time you or any of your people, go to an event, bring back as many names/titles/information as you can and enter them into a database. Also, make sure all your vendors and customers are in that database, as they can be great referral sources. For a small company, you can use Outlook or ACT! to manage this very inexpensively.
3. Get a sales minded individual to manage recruitment. Once you have a database, you need someone to call potential candidates. Again, this has to be a person with a strong sales orientation, who is not afraid to make cold calls. I suggest if you are adding people quickly, you may want to pull someone from your sales group to handle recruiting. Of course, you still have to pay them like a salesperson. This will quickly raise the number of A Players coming across your desk. TopGrading by Brad Smart reminds us that only A Players will hire other A Players. The     same is true of referrals; A Players more often refer A Players. As you build your database, develop a method of identifying the A Players in their respective fields and industries and call them first.
4. Don't rely on personal networks: Nearly every CEO I know believes they have a wide, diverse,     and willing network capable of producing almost anything with a few phone calls. Although this may be true for getting tickets to the big game, when it comes to recruitment, its simply not enough. Take this example: As an executive search consultant, when I recruit on a C-Level position with regional parameters, I will make an average of 150 targeted phone calls. For example, all CFOs with manufacturing experience in a three state area. For a search with a national scope I will often make 250-300 calls. These calls generally result in 12-15 candidates strong enough to interview. From there, 4-6 will be strong enough to present to my client, and usually only one or two will ultimately be worthy of an offer after evaluating cultural fit, skillsets, track record and potential for growth. Here's the eye opener - only about 10% of the people I will contact in that initial round of 150- 300 calls will be a part of my existing "network" or database. The rest are developed through original research and start out as pure cold calls. I spend the majority of my work life talking with executives, yet my "network" only accounts for 10% of my calls on any given search! Even if you have 200 A Players in your network, you cannot possibly     know enough people to give you a complete scan of any major market or industry, as it relates to a particular position. You must rely on the networks of others to ensure you have evaluated the whole field of talent.
5. Be "broad" when asking for referrals: When you call (or your recruiter calls) and asks for referrals, do not ask "Who do you know that can fill our Director of Marketing job?" When     asked this question, people automatically try to think of others they know who are "looking." The truth is, A Players, are never really "looking." Ask instead, "Who are the very best Marketing people in XYZ Industry, or Anytown, U.S.A.?" This question they can usually answer with a few     relevant names. Let them know you will not be using their name when you call these people. This will maximize the number of referrals you will receive. If you have a good, sales oriented recruiter, they will create interest in the role and your organization when they reach those A Players.
6. Get your culture aligned before starting an employee referral program:
   Formal employee referral programs rarely work. Most of the ones offering trips, cash or the like are desperate attempts to create candidate flow into an unattractive environment. The truth is, if your culture is not healthy, invigorating and well aligned around your core values, employees simply will not refer A Players. I do not know many people who will "sell out" their best friends     and top colleagues for a trip to Tahiti, or $2000 in cash. Remember, A Players are nearly always currently employed and have done well for themselves in their careers by making smart moves. If there is not a compelling reason to leave their current employer (usually cultural in nature), they will hold tight. There are many great resources available on cultural/values alignment,     including Gazelles.com, The Rockefeller Habits and jimcollins.com, just to name a few.

Of course, all of these suggestions will only provide results if they are part of both a well thought out plan and sincere intent to hire the very best. Many companies I encounter claim to be "all about talent" but then refuse to make sourcing a priority in terms of time and/or dollars. Sourcing, and overall   recruiting, is like anything else - what you get out of it will be a function of what you put into it.
Happy Hunting!

Mike Frommelt is Principal and Co-Founder of KeyStone Search. He is also a new EO Member. KeyStone provides executive search services to CEOs who know the power of a well aligned corporate culture. [email protected],   www.keystonesearch.com

 

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