Are the right people in the right positions?

In an earlier post I talked about hiring well. In this chapter, we continue looking at employees. One area that I’ve seen neglected in all but the largest companies is that of re-evaluating employees and moving them around to the most efficient utilization within the organization. So how does a company go about doing that?

I talk frequently about the evolution of employees both from a business need and from an employee perspective. An early-stage startup business needs flexible people who are jacks-of-all-trades and masters of none. The need to ‘jump in and help’ is much greater in an early startup than in a billion-dollar corporation. That ability to jump in and help becomes a liability as the company grows large enough to have managers and specialists. Specialization in departments is the key to growing a business from $10 million to $100 million and beyond. So does that mean that most businesses start replacing their founding employees as soon as they reach $10 million? On the contrary, most businesses simply promote their generalists, jacks-of-all-trades to senior management positions as the company grows. Do these people grow with the company’s needs, specialize in some departments, and become experts? Sometimes, but mostly not.

Many large companies are filled with managers who know less about their departments than both their boss and their employees. These generalists are quick to offer to help and jump in – that is why they were hired in the first place, remember? But this ability is rarely a good thing for a manager. They are loved by their employees because they act just like one of the guys, always covering for their team and throwing themselves on any failures, knowing that their long service to the company and their ability in the early years to do what was needed will ensure that their departmental failures are overlooked. This behavior is not good for the business.

So am I saying that an HR optimization is simply the elimination of all tenured employees from a company? No, of course not. Some employees do indeed find a specialization and end up focusing on it as the company itself grows. These people represent truly the only group of employees that it pays to hang on to for extended periods of time. They grew with the company, grew into specialists, and yet hold a lot of wisdom – knowledge, and experience about failures in the early days. These are the employees who have been with Apple and Microsoft for 25+ years. The people at Google and Amazon have been there for over 15 years. There are very few of them, and they have shown upward progress within the companies, not simply because of tenure, but rather because they have changed as the needs of the company have changed.

So the real question is how do you separate the people who have changed with the needs of the company from the people who have merely hung on? After all, the latter group may very well be more liked by their staff, and their willingness to always say “yes” to helping others is seen as an asset. It is very challenging for most business owners, and even nonowner executives, to admit that these employees are replaceable.

However, for the betterment of the company, the trees need to be pruned on a regular basis. The only way that I’ve experienced this happening is by having an outsider come in to observe and evaluate management. Generally, this will be a management consultant or some similar outsider. Their job is to figure out if the people in the roles within the organization are the ideal people who would be hired if that position were open today, or if they are simply filling that role by default, or as a reward for being with the company a long time, or perhaps for being the only person who didn’t take a step back when the role needed to be filled during a busy growth phase in the past. A business consultant will be able to figure out who is accelerating the growth of the company, and who is slowing it down.

The one exception that I’ve experienced was in a Fortune 500 company years ago. I had been closely working with a senior employee who had been with the company for nearly 20 years. One of my jobs was to evaluate his performance and report back to management. As I got to know this person I started to recognize him as a very dedicated employee who had a bit too much generalist in him. I didn’t think he would be climbing the management ladder but felt that he would be a great asset to any quick response team in the company – essentially a “jump into the fire” team inside the organization.

I was surprised when I found out he had in fact years earlier been promoted to a large department manager. I was wondering if he had failed to be demoted back to a senior non-management employee. As it turned out he had not! He realized after a few years that he hated running a team of 40 people. He much preferred to be the guy in the trenches that others could turn to for help, rather than planning staff reviews and working with project managers and business analysts. He actually saw his own strengths and weaknesses and made the proactive decision to leave management. This was a big benefit to the company because he was able to do what he was good at, rather than be a shitty manager.

Unfortunately, after I was done with that client, I found out they had laid him off anyway. I didn’t hesitate one moment and recommended him to be brought onto a project I was now running for another Fortune 500 company. This new team needed precisely this kind of experience and energy. He was much more valuable as the lead triage guy than as a director or group manager. Of course, his experience level would pay at the level of a director!

This was not the only instance I’ve found someone a position after they were let go from a company I was consulting. If you read my earlier book I’m sure you will remember a few of those stories.

Excerpted From The Original

Beyond Sales: 50 Business Problems Every CEO Needs to Solve

Foreword by Roy H. Williams

Gene isn’t a journalist, but he is most definitely an investigator.
I was talking to a friend who employs about 250 people in 3 different companies when he mentioned that he had hired a specialist to figure out what was wrong with a company that was underperforming.
“Who did you hire?”
“A fellow named Gene Naftulyev.”
“He’s going to figure out what’s holding you back?”
“Yeah. He’s famous for it.”
“How famous?”
“Procter & Gamble. American Express. Kraft Foods. Target. They’re all clients of Gene’s.”
“What does he do, exactly?”
“He improves profits without spending money.”
“But how?”
“Process re-engineering, operational optimization, making business units autonomous, negotiating employee and consultant contracts and a hundred other things like that. It just depends on what you need. He refines the core of your business so that you become more efficient, have fewer frustrations and make more money. Naftulyev can always spot the problems and his fixes are famously quick and easy.”