HRP 1, 2, 3…Half Way There
In Seven Tenets to Talent Building I introduced the game plan to move your company from good to great through a Human Resource Planning (HRP) model. The gist is a simple notion that adding a lot of great employees across the ranks makes for a far more profitable, productive company. The math goes something like this: If revenues were $125,000,000 and the profit margin 11% with okay employees at the helm and in the trenches, then the same company—with all other things being equal—can perform far better with a higher talent base. In other words, you can literally raise the value of the firm to say, $130,000,000 in revenue with a 14% margin, doing the same good thing—more and better—by systematically injecting greater people-talent into the employment mix.
The numbers are HR-concocted of course for illustration only; but not unreasonable in the common sense realm where a vast majority of the great work produced is pushed out by about 25% of the company’s best people. Take it down to the personal level and it is even easier to grasp the math. Ever hear the one about the new guy who came into a job and did three, four or even ten times the good work than did the prior incumbent who sat in the same chair? Yes, yes, I believe we all know that story. We’ve seen it. Some of you have lived it. Indeed, you don’t need a research study, engagement survey or a silly putty ROI model to know that the people differentiators are statistically significant.
So how exactly do you go about it? I have written four posts on it so far—the Introduction so referenced—and HRP 1, 2 and 3 as follows:
- INTRO: Seven Tenets to Talent Building
- HRP 1: Talent Building is Not Recruiting;
- HRP 2: Inventory Your Talent Base; and
- HRP 3: High Performance Leadership.
We are now at the halfway point. That leaves us with four more big ideas:
- HRP 4: The Talent Pipeline
- HRP 5: Focus on Top Notch Performance
- HRP 6: Strategic Communications Infrastructure
- HRP 7: Knowledge Sharing as Universal Requirement
Continuous Talent Flow
Half way there is a nice even place to summarize lessons learned so far and take stock. This is especially relevant as we next proceed to chapter four about the Talent Pipeline. I alluded to this concept in HRP 1 by illustrating, first and foremost, that the recruiting gig is a numbers game of sorts– not an art, and hardly a science. Instead, it’s fortuitous. Yep, when you are fortunate enough to land a great worker, it usually isn’t because of your recruiting wizardry. Instead, more often than not you discovered a good employee because you were lucky. Good for you. This sunny side hire-up happens approximately 20% of the time.
On the down-flip, one in five conversely is not what you wanted. No, not at all. That is, you would not rehire about 20% of the people who you just employed. But no need to lament your lack of people-placement-pedigree when you miss the mark. This unkind fate also occurs pretty much because you were unlucky, not because you are a dumb-dumb recruiter. What relief, huh?! Although approximate to be sure, the 20% good / 20% not-so-good theory is real world enough to those of us in the hiring world to be dubbed a doctrine of sorts—The One in Five Doctrine, I call it. Pretty catchy, I know.
What matters here is the all important idea that you have a great opportunity and realistic shot at hiring successfully every time you have a job open. The vacancy itself is the key that opens the good door to the Great Room. The trick is to keep the door open by perpetually having jobs to fill—each one representing a 20% or so chance of bringing in high-performance people. It all boils down to having a continuous flow of talent—a pipeline if you will— into your organization at all times, regardless of economic indicators, hiring budgets, current headcount and all the rest of the excuses. By so doing you obviously increase your chances to bring in someone really good, maybe even super-lucky great. Wouldn’t that be nice? Yes indeed.
The One in Five Doctrine thus presented a jumping off point to get a grip on just how lucky you need to be to move your company from good to great. Put another way, how unlucky has the company been in the past regarding your recruitment misfortune to attract and retain the wrong people. Loyal readers learned in HRP 2 to take a talent inventory of their entire team by force ranking each worker from best performer to worst.
Once prioritized you slotted each staffer in categories and assigned a nifty color code to make the package pretty: Red means you are a High Potential; Blue means you have very good prospects for career Growth Potential; Green means you are an okay performer in a key role–a Strategic Retain that is; and Orange means you are among the largest group of satisfactory performers who show up, Meets Requirements but otherwise don’t light the world on fire. We tide things up in a pretty Yellow bow for anyone who we couldn’t yet judge cause they are Too New to Tell; Finally, at the bottom of the box was an ugly Purple tone that denotes a person-to-job mismatch–Over and Out they go within defined time frames. A rainbow matrix was offered that described all this and you can see it here now in Colorized PDF for your reference
Back to Our Story
Let’s now go back to where we left off in HRP 3 when discussing high performance leadership. In that post we illustrated with story a certain Vice President of Client Services who embarked on a new journey in his own leadership development through Human Resource Planning (HRP). An action plan lay before his VP-feet whereby the following occurred, leaving the star of our show a bit twisted:
- VP Client Services submitted his staff’s first-time talent assessment to the President- all looks rosy in the VP’s eyes- no position is open and no one is scheduled to be fired.
- President calls a meeting for the VP to explain and defend his staff inventory
- President allows for exceptional treatment of the VP’s few top performers
- President offers not budgeted additional headcount to replace the VP’s lowest ranking employees; but only if that’s what the VP ultimately chooses to do.
- HR is directed to support, not hinder any of the VP’s future termination decisions
- President asks the VP to reconsider his initial staff talent assessment, including whether-or-not he should let anyone go now or in the near future.
- Actions taken to reward top ranked workers and remove lowest ranking
- Process is drilled down one more level with VPs now driving it
These collective steps are the HRP implementation process in a nutshell. And step four—proactive hires to ultimately replace the status quo and step 5—aggressively supporting termination decisions;—are all about the Talent Pipeline. In stark contrast to traditional HR thinking, measured high turnover in most organizations can be a very good thing. In fact, it is critical to engage higher-than-normal, faster-than-average turnover to move your company from good to great. Who would have thought?
Switch HR, that’s who! That’s where we are going next.
Onward now to HRP 4: The Pipeline. Keep coming back!