First Who, Then What
Get the right people on the bus before deciding where to drive it
First Who, Then What inverts the conventional wisdom that leaders should first set a vision and strategy, then rally people behind it. The research found that good-to-great leaders did the opposite: they first assembled the right people (and removed the wrong ones), then figured out where to take the organization. The logic is threefold: the right people adapt better to a changing world, they are self-motivated and need no external incentives, and great vision without great people is irrelevant.
This framework rests on being rigorous, not ruthless, in people decisions. Rigorous means consistently applying exacting standards at all times, especially in upper management. Ruthless means hacking and cutting without thoughtful consideration. The good-to-great companies used layoffs five times less frequently than comparison companies. Six of eleven recorded zero layoffs over a twenty-five-year span. The distinction matters enormously.
Three practical disciplines emerge from the research: When in doubt, don't hire and keep looking. When you know you need to make a people change, act decisively. And put your best people on your biggest opportunities, not your biggest problems. The framework also overturns the idea that compensation drives performance. The right people are motivated by internal standards of excellence, not external incentive structures.
- People are not your most important asset; the right people are your most important asset.
- Who questions must come before what questions: before vision, strategy, structure, and tactics.
- The purpose of compensation is not to motivate the right behaviors from the wrong people, but to get and keep the right people.
- Character, work ethic, and values matter more than specific knowledge, skills, or experience, because the former are ingrained while the latter are teachable.
- If you have the right people, the problems of motivation, management, and alignment largely take care of themselves.
- Audit your current busEvaluate every person in key positions using two diagnostic questions: If this were a hiring decision today, would you hire this person again? If this person told you they were leaving, would you feel disappointed or secretly relieved? Be honest.Pro tipApply the standard most rigorously at the top. Rigor in a good-to-great company starts with those who hold the largest burden of responsibility.WarningDo not use this as an excuse for mindless head-count lopping. The good-to-great companies rarely used layoffs as a primary strategy.
- Get wrong people off the bus firstWhen you know you need to make a people change, act without delay. Waiting too long is unfair to both the right people (who must compensate) and the wrong people (who could be finding a better fit). But first check whether someone is simply in the wrong seat rather than on the wrong bus entirely.Pro tipTry moving people to different positions before concluding they need to leave. Colman Mockler spent 55 percent of his first two years rearranging the management team.WarningLetting the wrong people hang around is the biggest disservice to the right people, who will eventually become frustrated and may leave.
- When in doubt, keep lookingNever compromise on hiring standards just to fill a seat. Packard's Law states that no company can grow revenues consistently faster than its ability to get enough of the right people. Growth must be throttled by the ability to attract talent, not the other way around.Pro tipCircuit City put banners reading 'Always Looking for Great People' instead of sales promotions. Their CEO said compromise was never an option.
- Put best people on biggest opportunitiesAssign your most capable people to your greatest opportunities, not your most pressing problems. Managing your problems can only make you good. Building your opportunities is the only way to become great.Pro tipWhen Philip Morris identified international markets as the biggest opportunity, CEO Joe Cullman pulled his number one executive off the core domestic business and put him in charge of international, which was less than one percent of revenue.WarningWhen you sell off problems, do not sell off your best people. Keep them on the bus for the next opportunity.
- Build a culture of vigorous debateAssemble a team where members argue and debate violently in pursuit of the best answers, yet unify fully behind decisions once made. This requires people who argue from the drive to find truth, not from ego or parochial interest.Pro tipPhilip Morris executives would argue until faces turned red, but every decision was made for the common good of the company, not personal interests.
Dick Cooley and Ernie Arbuckle focused on injecting an endless stream of talent into the company, hiring outstanding people whenever and wherever they found them, often without any specific job in mind. Nearly every person on the executive team went on to become CEO of a major company.
Instead of locating mills in traditional steel towns, Nucor placed plants in farming communities and hired farmers who naturally rose at dawn and worked hard without fanfare. They accepted 50 percent first-year turnover to ensure only the right people remained.
The finding emerged when researchers expected to discover that great leaders began by setting bold new visions. Instead, the evidence showed they began by getting the right people in place. Wells Fargo's Dick Cooley hired outstanding people without even having specific jobs in mind, saying that if he wasn't smart enough to see the changes coming, they would be. When banking deregulation hit, no bank handled the challenges better than Wells Fargo because it already had the talent in place.
The contrast with Bank of America was stark. B of A followed a 'weak generals, strong lieutenants' model, selecting placeholder executives to prevent strong people from leaving. When crisis came, B of A had to recruit its turnaround team from Wells Fargo, with insiders calling themselves 'Wells of America.'