WHAT THE CEO WANTS YOU TO KNOW
Using Business Acumen to Understand How Your Company Really Works

The Right People In the Right Jobs

There are many small shops around the world where the whole family is engaged in the business. The children help the mother and father in the shop, regardless of whether it is the best profession for them. The business may not match their natural talent, but making a living overshadows building a career by sharpening, polishing, and exploiting the natural talent. In those cases, family conflicts often arise, and the business doesn't expand much. This has been true for centuries.

Every business needs the right people in the right jobs. The modern corporation is built on the idea of professionals who use their particular talents to help the business expand. If the person making decisions is not suited to the job, the quality of the decisions is poor, and the whole company suffers. If the person is well matched to the job, she will get better and better at it, and she will get joy out of her work. The individual's capacity expands. If this is repeated throughout the company, the entire business expands.

Those leaders who deliver results consistently over a long period of time are the ones who recognize what an individual can do best. They link the business need and the person's natural talent. They take the time and effort to place individuals where their strengths can have the most impact.

Matching the person to the job begins with understanding what kinds of skills, attitudes, and aptitudes are required to accomplish the business priorities. Don't be surprised how often leaders in your work environment ignore this starting point.

If you were Sam Walton and you were trying to build a business, how would you select people to run the new stores you were building? Making money in that business means managing margin and inventory velocity and growing volume. If you can't figure out what kind of people can do that, you can forget about your dream of becoming bigger than Kmart.

Sam Walton defined the most important criterion for hiring in his business: common sense. He carefully selected people who met the criterion and developed and trained them. Employees were taught to watch sales, price, inventories, and customers like a hawk. And they had considerable autonomy to make decisions and take action.

Have you been to a Starbucks coffee shop? Did you notice its distinct ambience? What about the people who make the coffee? This could be a boring job, but they seem to enjoy the experience. Starbucks seems to have a knack for attracting and selecting people who fit the ambience. If Starbucks can't get those people and begins to deviate, fast growth could become a negative instead of a positive.

Natural talent is observable, if you take the time to watch. It's a matter of noticing which tasks come naturally to the person and energize him and others around him.

If you're in sales, you may have seen the person with the highest sales numbers get promoted to be sales manager — and totally flop. If his bosses had really observed him, they might have seen that he's an individual contributor. He thrives on getting the deal done. That's what gives him his kicks. He simply may not have the natural talent or desire to recruit other people and coach them to become superb producers. If he can't motivate other people and expand their capacity, he will not be successful in getting them to implement the business priority of increasing sales. Such a person makes a fantastic salesman but a lousy sales manager.

Consider, too, the mind-set required. Does the person have an inner drive to succeed? Is he open to change? What's the mind-set of a traditional plant manager if he's used to two inventory turns and you tell him you're going to thirty turns? What happens if he resists the idea? We've all seen people who agree to things in meetings, then go out the door and do the same old thing. If you have many of those kinds of people around, what happens to the company's ability to execute?

Sometimes when a person has worked at a company for years, the assumption is that the long time spent in the job gives her great command over the job. Yet as the real world changes, the company's business priorities shift, and the demands of the job may have changed. Recently, as Ford was making a shift to become "the world's leading consumer company providing automotive goods and services," it realized it needed certain competencies like brand management and consumer insight that many insiders had not fully developed. To achieve its new business priorities, Ford hired a lot of senior people from other companies. For example, Ford chose Wolfgang Reitzle, a former top executive from BMW, to head its premium brands group. Ford also launched several company-wide training efforts to promote consumer focus across the company.

Perhaps the best example of changing business needs is in the financial services industry. The CEOs of many of these companies are discovering that as the industry is going through global consolidation, they desperately lack leaders at all levels. Suddenly these firms have become huge and require more layers of leadership. Yet the companies do not have a pipeline of talented people who have the aptitude for leading a business on that scale. When the companies were smaller, the "excellent producers" got promoted, and somehow those individuals were expected to continue to sell while managing other people. Often, they continued to do what they loved to do — namely, sell — and neglected the managing part of the job. Their aptitude did not match the need to help others develop.

Many financial services firms have now begun to look for people who may not be the best individual contributors but have the attitude and aptitude to lead other people, who get their kicks from linking other people's energy to the business needs rather than by becoming the salesperson of the year.

Without the right people in the right jobs, a company cannot grow and thrive. In 1978, I visited a small company, then $200 million in sales, to discuss business strategy. The company was Intel, founded by three people we now call geniuses: Andy Grove, Gordon Moore, and the late Bob Noyce. These men had incredible energy, the ability to think out of the box, and the passion to create something new that would permanently alter the world and produce results for shareholders and employees. The secret of Andy Grove, who really led the company in terms of managing people and the organization, is putting the right people in the right jobs. I happened to be there when he got a call from an engineer at a large, well-known competitor. The engineer said he would take a pay cut to work for Intel because he, too, wanted to do something new and exciting. I learned later that the engineer was hired. His aptitude, attitude, and drive apparently matched the job and the needs of the company. Without people who fit, Intel could not have become the giant it is today.

Copyright © 2001 Ram Charan. Published by Crown Business a division of Random House, Inc