Topgrading

Do you have difficulty figuring out whether someone in the company, or a candidate for selection, is an A, B, or C player?  If so, you’re in good company, for frankly only the companies with the most sophisticated human resources methods have it “nailed.”  But this article should help, since it shares the experience of Topgrading professionals who are constantly helping clients accurately put people in the right categories.

Actually, Topgraders have three slightly different categories – A Player, A Potential, and Non-A.  We define A player as someone in the top 10% of talent for the pay, in your location, in the industry, and reporting to you.

When companies are Topgrading and more than 75% of the people they hire turn out to be A players, they don’t care if someone is a B without A potential or a C without A potential, for both are not good enough.  The only good categories are those who are already the high performers, the A players, and those with the potential to become the high performers, within a reasonable amount of time.

Okay, but when people are just learning Topgrading, it’s easiest to use the A, B, and C categories, to show the dramatic differences.  Following are 5 of the best ways I know of to judge people in a fair, objective, legally defensible way:

1.  How A, B, and C players differ on key competencies. The following chart is a bit simplistic because not all A players are that great on all competencies and not all C players are that bad on all the competencies. Indeed, in real life C players usually are A players on some competencies.

2.  Look for patterns of success. The “magic” of Topgrading comes from understanding, bottom line, how successful a person was in job 1, job 2, job 3, etc., with the greatest weight given to the most recent jobs.

Last year I interviewed a smooth talking executive who had clearly been a superstar in the industry, but the guy had not worked hard for years.  He had peaked years ago, was on a decline and frankly the pattern showed he was “over the hill,” someone who had lost his energy, drive, resourcefulness, and passion.

3.  Recruit a replacement. This really is the best way to see if your employee is truly among the top 10% of talent available.

After you have argued with your employee, complained about unsatisfactory performance, and heard 1,000 excuses, the simplest way to see if there are better people is to actively recruit them.  This can be done secretly, but go through all the Topgrading hiring steps including talking with former bosses.

Over the years I’ve heard it hundreds of times: “It became very easy to replace my employee after going through the Topgrading hiring steps, because I became absolutely certain my excuse-making employee was a C player, and I had three A players very willing to join me at exactly the same salary as my C player.”

4.  Never stop building your recruitment networks. As a Topgrader, you know the best way to recruit is by staying in touch with 40 A players you’ve worked with and also stay in touch with 20 “connectors,” people who know a lot of A players.

But in addition to using your networks to recruit, staying in touch helps you figure out if your team consists of A, B, or C players. As you chat from time to time with A players you’ve worked with in the past you hear about their accomplishments, what they pay people, the standards they set, and when you share your frustrations with a certain employee, your network will give you feedback that your expectations are too high or too low.

5.  Assess employees using Topgrading methods. You might already know that my first consulting engagement with General Electric was to improve their success promoting people.  They improved from 25% to well over 90% success, and the internal assessment methods are almost identical to Topgrading hiring methods.  Two trained interviewers conduct the tandem Topgrading interview and instead of talking with outside references (for hiring) they talk with bosses, peers, and subordinates in the company.

Summary: Use all of these methods to, as Jack Welch calls it, “differentiate” among high and low performers.  Needless to say, when you have concluded you have one or more Non-As, it’s time to coach them to get into the A player category or find another job, and it’s time for you to use the 12 Topgrading hiring steps to replace them.

RECOMMENDED RESOURCE: The new Topgrading Workbook, the one used in all our workshops, is organized around the Topgrading Vision.  Each of the 12 steps is explained, the problem it solves is clarified, and then fun exercises teach the Topgrading skill.  You have to actually use it to get the favorable results!  For more information and to invest in the Topgrading Workbook, click here.

I had the chance to talk to a fantastic Topgrader last week, Travis Isaacson of Access Development Corporation. We were talking about Job Scorecards, and Travis had some fantastic advice about them. Here are five points worth considering:

1. To relieve stress, tell people, especially the Hiring Managers who are responsible for creating them, that the Job Scorecard is a living document that will change. You don’t have to get it perfect the first time. When you realize that it’s not quite right, you can change it. Hiring Managers are more willing to do a first draft if they know they can change it later if situations change.

2. Look at what you already have in your systems, culture, and processes. You have people who are receiving bonuses, you have lists of responsibilities. Start from where you are. How do you get bonuses? That should be on the scorecard. Turn responsibilities into accountabilities.

3. You can build scorecards the way you build budgets. If a company wants to make $50M, you have to figure out how much revenue is going to come from each department. The same sort of process can work all the way down to individual contributors. A Sales Manager has to generate a certain amount of revenue, and then that’s broken down to individual sales people.

4. Start at the top. Build the CEO/President scorecard and work your way down.

5. Scorecards aren’t just used for hiring. They are central to our entire talent management process because they are the center piece of our performance management system.

Note:  A (free) download comes with this article!

Here is the simplest, clearest outline of all 12 Topgrading hiring steps, including what problem they solve, what skill must be learned, and the results that are typically achieved with using each Topgrading tool.

Thirty (plus) years of experience have clearly demonstrated that each and every one of these 12 Topgrading hiring steps is not just desirable, but necessary, in order to achieve 90% hiring success.  Cut corners by ignoring any one of the steps and it’s been well documented that costly mis-hires go up, and up, and up!

The download, the Topgrading Vision document, came from, of all places, a request from Tony Robbins.  He’s asked me two years in a row to be the “hiring guru” at his Summit for entrepreneurs, and while preparing for it Tony asked for a template, dashboard, something to clearly show how, where, and why all the Topgrading hiring parts fit together.  Good idea, Tony, thanks for the suggestion.  Hundreds of beginning Topgraders have bookmarked the Topgrading Vision, so all the steps are clear.

Enough introduction.  Just click here and immediately download the Topgrading Vision!

RECOMMENDED RESOURCE: The new Topgrading Workbook, the one used in all our workshops, is organized around the Topgrading Vision.  Each of the 12 steps is explained, the problem it solves is clarified, and then fun exercises teach the Topgrading skill.  You have to actually use it to get the favorable results!  For more information and to invest in the Topgrading Workbook, click here.

Having assessed/coached 6,500 executives including over 500 CEOs and presidents, I kinda know what ticks them off day in and day out – and one thing is how people communicate with them.

This short article spells out 3 of the most irritating ways people communicate with CEOs and frankly all high level managers, followed by the “bottom line” recommended approaches.

Communications Irritant #1: “It depends.”

It drives A player CEOs nuts when they ask a question and the response is, “it depends.”  Of course it depends – don’t say the obvious!  Any idiot can say “it depends” as a response to just about any question – what’s the weather going to be like, who do you think will win the ball game, what do you want to be doing in 5 years, will the strategy work?  “It depends” is a crutch, a stalling technique for someone who doesn’t know the answer or doesn’t want to tell the truth.

CEO: What do sales look like for the second quarter?
Pat: It depends. You know the economy is still dragging, two competitors have become very aggressive on pricing, a couple of our top sales people were pirated away … blah, blah, blah.
CEO: Pat, I just want to know what your best guess is for the second quarter.  TRANSLATION:  Quit covering your __ __ butt and answer the damn question!

Recommendation:  Answer the question directly and succinctly.

Say, “My best guess is $35 million for the second quarter.” If the CEO wants more of an explanation, wait to be asked!

Communications Irritant #2:  “Here’s how to build a watch.”

This is related to #1, but a bit different.  The CEO asks a question and the subordinate is fearful that a direct answer will be rejected, so the subordinate builds a case for the answer first … totally ticking off the CEO who is waiting, waiting, waiting for the answer.

CEO: What do sales look like for the second quarter?
Pat: You know the economy is still up in the air, blah, blah, blah.

As a professional interviewer I ask, metaphorically, what time it is and interviewees frequently respond by telling me how to build a watch.  So, I cut them off:  “Joe, please just give me the answer, and based on that answer I’ll possibly want a longer explanation.”

A players get the hint; C players don’t.  Then I give them one more chance:  “The hiring manager, the CEO, insists that when she asks a question, people answer directly and not build a case for the answer first.  I’ve asked you to answer me directly and sometimes you do, sometimes you don’t … but so I can judge whether you and the CEO would get along, please listen carefully to my questions and answer directly for the rest of this interview.”

Recommendation:  Answer the question directly and succinctly!

Don’t give a long-winded prelude and justification for the answer first.

Communications Irritant #3:  “I wanted to solve the problem before worrying you with it.”

It’s amazing how many managers do this, risking the wrath of the CEO:  “What, you knew our most valuable account was considering dumping us and you didn’t tell me?  You’re fired!”

Why would anyone hide crucial information from the CEO?  Simple – they know the CEO will blast them with questions:  “Why didn’t you anticipate this?  Why didn’t you do X, Y, and Z to prevent it?  Why haven’t you done A, B, and C to fix it?”

Too often CEOs punish open, complete communication, contributing to this problem, but that’s a topic for a future Topgrading Tips.

Recommendation:  “Manage” CEOs to totally trust your letting them know about problems.

Early in his career Bob Smith, Chairman of Acme (I changed names), reported to a CEO who, if he thought a division head was hiding anything, would send an army of analysts to question everyone.  Shortly after Bob was hired he said to the CEO, “I know you hate to get negative surprises, so I promise that within an hour of my learning of a problem (and taking an hour to verify it), I’ll let you know.  I’d ask a favor of you – please give me a day or so after that to investigate why it occurred and then I’ll get back to you with the answer, what should have been done to prevent it, what we’re doing to correct it, and how we’ll prevent a recurrence.’

Bob never was visited by that “army” of analysts.

INTRODUCTION: This article helps you answer the very common question, “What is different about Topgrading?”

For years we’ve said, “Topgrading hiring is just common sense on steroids.”  That is supposed to be a cute way of saying that adopting Topgrading practices proven to hire 90% high performers is a lot easier than someone might think, and there is no magic – just applied common sense.  But lately some executives have advised, “Don’t oversimplify Topgrading hiring methods – Topgrading is revolutionary, and before embracing it, people want to know how Topgrading values, principles, and tools differ from what they are accustomed to.”

Okay, here’s what is different about Topgrading:

1.  Hire only high performers.

Companies dedicated to hiring exceptional performers tend to pay exceptional salaries, but that seems to miss the core value of Topgrading hiring: at every salary level there are high and low performers, and Topgrading strives to help you hire only the best performers – not just average candidates but the very best available.

This notion – packing teams with the “best of class” at every salary level – is highly offensive to two groups of people:  1. those devoted to equality of outcomes (“C players need jobs, too.”), and 2. C players (who realize their job will be in jeopardy with Topgrading).  Hand out an article on Topgrading and just watch these two groups coalesce to undercut Topgrading!

2.  “Topgrading” is a made-up word and concept.

In the mid-1990s, my son Geoff Smart (of ghSMART & Co.) and I collaborated on developing a more comprehensive approach to talent management than what existed at the time.  We felt it was important to come up with a word that captured the essence of the spirit and principles that make up this concept.  “Topgrading” was the name we picked.

After all, if you “upgrade” talent you might have a team of 10 C players and replace one with a B player.  Whoopee – you’ve upgraded talent and you have a poor team.  The word Topgrading struck me as capturing the essence – packing the team with all high performers, A players, stars.

“Upgrading” talent can be embraced by C players; Topgrading means no C players.

3.  (Chronological) Topgrading Interview

The idea of a thorough chronological interview, asking a few questions about every job, is not new; every executive search report is the product of such an interview.  But search reports tend to be light on disclosing mistakes, failures, and what bosses would say are weaker points.

What we call the Topgrading Interview has been fine tuned for decades and today there are 16 basic questions about every job, including every success, every failure, every mistake, every key decision, every key relationship, assessments of every boss, estimates of what bosses would say about a candidate’s strengths, weaker points, and overall performance … plus questions about leadership, talent, goals, self appraisal, etc. … plus follow up questions.  Phew!

The innovation in the Topgrading Interview is to not overlook anything.  To achieve 90%+ high performers hired, you need 1,000+ data points.

4.  Focus on 50 Competencies.

In order to achieve 90%+ hiring success, focusing on 4 or 6 “key” competencies, which is what most companies still do, is inadequate.  This partly explains why companies hire only 25% - 30% true high performers.

In hundreds of workshops we’ve trotted out our standard 50 management competencies and challenged the participants to cut the list by even one, with this criterion:  you have to keep it if you would reject a candidate who is Poor or Very Poor on that competency.  No one has been able to cut the list by even one.  Conclusion:  50+ competencies must be accurately appraised.

But isn’t it impossible for an interviewer to accurately judge 50 competencies?

Nope!  At the beginning of workshops almost all managers say they can’t possibly do it, but at the end of the workshop – they’ve done it!   They amaze themselves!

So the good news is that managers trained in Topgrading can objectively and validly rate managerial candidates on all 50 competencies.

5.  Threat of Reference Check (TORC) Technique, the “truth serum of hiring”

This technique is simple but it works, motivating candidates to be honest.  It’s this:  let candidates know at each step in the hiring process that in order to get a job offer THEY will eventually have to arrange for personal reference calls with bosses (and others).

C players drop out and A players are happy to tell the truth and to arrange those calls.

6.  Topgrading Career History Form

Problem:  Pre-screening from resumes produces a mixture of good and bad candidates, since resumes are too often incomplete and hyped.

At a glance the Topgrading Career History form looks like an application form, but it’s much more. It requests all the information NOT included in resumes or application forms but you wish you had – complete salary history, boss ratings, likes and dislikes in jobs, true reasons for leaving an employer, and the “truth serum” – the TORC Technique (#5 above).

The Topgrading Career History Form gets only the best candidates in for face-to-face interviews.

7.  Research Base for Topgrading

There are now about 40 Topgrading professionals who have conducted tens of thousands of in-depth Topgrading Interviews on pre-screened candidates for executive positions.  Literally hundreds of thousands of times we’ve asked interviewees the talent question – what did you inherit, what did you end up with, and what did you do in terms of hiring, coaching, firing?

The point:  we’ve heard about every hiring method under the sun and never stop improving Topgrading methods.

8.  The Most Credible Case Studies

My son’s company and mine publish unusual case studies in our books and articles:  CEOs of NAMED leading companies state that their companies as a whole are doing better because of Topgrading.

9.  Managers (like you if you are an A player) can achieve 90% high performers hired.

Thanks to Jack Welch (GE Chairman at the time) approving Topgrading methods including two interviewers, the Tandem Topgrading Interview, many companies wanted to copy GE.  It’s now proven – trained A player managers can achieve 80% - 90% HIGH performers hired.

10.  Important Measures of Hiring Success

The HR world has been measuring hiring success in questionable ways – “cost to hire” people and “time to fill” jobs.  Trouble is, hiring goals are achieved if there are poor performers who are hired quickly and cheaply. Topgraders systematically measure percent HIGH performers hired.

The Topgrading Cost of Mis-Hires document is an original tool to quickly measure those costs; in only 15 minutes hiring managers become aghast at the high costs of their mis-hire, and that motivates them to learn the best hiring practices.

11. Ongoing Refinement of Interviewer Skills

Topgrading interviewers go through the Topgrading Interviewer Feedback Form, a checklist of a couple dozen good interviewer techniques, and simply give each other brief feedback and a couple of suggestions for how to do better next time.

12.  Candidates Arrange Personal Reference Calls with Former Bosses.

This is the follow through part of the TORC Technique (#5 above), and it’s simple:  after the Tandem Topgrading Interview, if the candidate and the interviewers want to proceed, the interviewers ask the candidate to do the work of arranging calls with the people the interviewers choose to talk with – usually 4 bosses, 2 peers, and 2 subordinates.  Conducting these phone interviews assures that the “truth serum” worked.

13.  Coaching New Hires Right Away

Candidates are promised coaching soon after they join, “to smooth your onboarding, assure you are productive quickly, and to begin a long-term development process right away.”  Bingo – A players love it!

CONCLUSION: Topgrading is an organic set of hiring best practices, most of which destroy what had been common hiring myths.

RECOMMENDED RESOURCE: We’ve released a brand new Topgrading Workbook, the same workbook we use in our workshops.  It has a clear explanation of each of the 12 Topgrading hiring steps, the same exercises to teach each step, and lots of new tools and methods.  Click here for more information or to order.

FREE DOWNLOADS: 1) 50-page eBook, an overview of Topgrading – click here, 2) Cost of Mis-Hires Form – click here,  3) Topgrading Vision, listing the 12 problems Topgrading solves, the skills necessary to learn, and results – click here.