News

Right People in the Right Place

Posted on: June 13, 2017
Tags: planning, People

The single biggest success factor in any business is ensuring that the right people are in the right place (“People”).  Jim Collins made this thought popular in his book “Good to Great”.  Simple concept.  Nothing surprising.  Every management team understands this.  Yet, few get this right!

The primary elements in getting the right people in the right place are:

  • CEO – leadership is the foundation
  • Right Place – strategic plan dictates organizational structure
  • Right People – performance, culture, and feedback
  • Wrong People – make the tough decisions
  • Family Members – must perform to expectations
  • Succession – plan ahead

CEO

Getting the right people in the right place begins with the CEO.  In privately held businesses, the entire organization is typically a reflection of the CEO, who is usually involved in all major talent decisions.  The ability to objectively assess talent and have the vision to understand what talent will be needed in the future is a fundamental role of the CEO.  Yet many CEO’s of small and middle market companies have blind spots when it comes to talent.  Also, it's typical to not spend the appropriate time and effort on hiring and developing talent. 

One of the first steps in improving an organization and creating value is to begin with increasing the performance of the CEO in the People area.  Many CEO’s are consumed with activities, including wearing multiple hats.  That is what has made them successful to date.  As CEO’s continue to grow their company, they should migrate away from daily activities and focus more time on long-term talent development.

Right Place

The first challenge is to determine what the “right seats” are.  You cannot begin with an assessment of the “right people” until you have defined the positions in which they sit.  Do not begin with the names of your team members in determining the optimal structure.  It’s a common mistake to create an organizational structure by accommodating the people you like or the people you think you can’t lose.  To determine a future organizational structure, you must begin with the strategic plan.  If the company does not have a plan, one needs to be developed.  The plan will include the optimal organizational structure, a gap analysis from the current structure, and a road map on how to migrate to the new structure.

Define each key position, including a job description.  Now that the right seats are defined, you can begin the process of determining whether you have the right people.  

Right People

Having the right people in the right positions seems easy and extremely intuitive, but it’s not.  Many companies don’t get this right.  This results in  opportunities for private equity groups who quickly make necessary management changes.

Determining whether people are “right” begins with assessing performance against expectations.  A job description should be in place that specifies the responsibilities of each position.  If there are no job specifications, then an assessment on performance will not be objective. 

Feedback is the communication tool that fundamentally tells an employee whether they are the right person in the right seat.  But managers often avoid tough conversations.  Therefore, honest and objective assessments are not always given, and some companies don’t give any feedback.  In far too many instances, employee issues are not communicated.  Lack of honest feedback affects the performance of the employee and the entire organization.

The majority of organizations evaluate personnel solely on job performance.  Rarely do they consider the cultural fit.  Most CEO’s have not defined their company’s values, so determining a cultural fit would be difficult.  The “right people” have to be the ones that share and exhibit your company’s core values.  Therefore, include a cultural fit assessment in determining your “right people”.

Wrong People

Virtually every company has at least one employee that is not right for the company.  It may be performance, it may be cultural, and it may be that you put them in a position for which they are not qualified.  It’s easier to avoid addressing the issue.  The most difficult decision a leader has to make is the elimination of a “wrong” person.  Far too many times the leader will use the excuse they want to be “fair”.  A strong leader will address employee issues quickly. 

Imagine if a private equity group bought your company, who would they eliminate?  You should do the same.

Family Members

One of the benefits of owning a family business is the ability to employ family members.  This is a wonderful benefit, but only if you are using that benefit for the good of the organization!  Ask yourself if you’re abusing that benefit.  Have you allowed a family member to be placed in a position for which they are not qualified?  Have you accepted substandard performance from a family member?  Is a family member displaying signs of entitlement?  Do they receive formal evaluations or feedback?  How does their performance affect other employees?

If a family member is working in the company, that family member must be performing to expectations.  Do not treat them differently than others.  There are times a family member will be placed in a position that is intended to give them experience and knowledge.  Such experience will be enhanced when it is a part of a formal development plan.  Be sure that their development plan is communicated to and supported by the management team.

Succession

Most companies look at the current team members in determining the “right” people.  Too few companies look to the future and consider succession.  A key issue in small and middle market companies is the inability to afford successors in every key position.   This does not mean you should ignore succession planning.  You should identify the key positions and determine how you can begin getting someone in the organization ready to step in if needed.  This is a key element in maintaining the right people in the right place.  The first and most critical position you should consider is the CEO.  Research shows the majority of family held businesses are not ready for CEO succession.  Are you ready??

Summary

The Right People in the Right Place is foundational to the long-term success of all organizations.  Yet most small and middle market companies have People issues that they have either not identified or addressed. 

An outside perspective can be critical in helping overcome this weakness.  Integres can help you through a fresh, experienced perspective.  We will tell you what you need to hear, not what you want to hear.  Then we will help you develop and execute a People plan to make your organization go from “good to great”.  Contact us today.