We looked at revenue generated against the business plan. The gap was significant. We discussed the challenges around that and what initiatives were in place to create sales. What became apparent was that these commercial hires from big-name companies had zero experience in taking a sales proposition to a new market. Their contacts were the wrong people, so in effect they brought no existing relationships into the company when they joined.
Furthermore, their former experience was all reactive. By that I mean incoming briefs were handed out and their role was to respond with a proposal that fitted the request. Tramping the streets of London making multiple meetings with new contacts just wasn’t on their radar.
“How many sales have you made?” I asked the CRO. “That’s not my job,” he replied. “I manage the team.” Said it all really. They all left and so did I. The chief executive likened my participation to having his homework marked. He didn’t respond well to accountability. I wished him luck.
But I also work with companies where the outcome has been far more positive. With people who are much less comfortable in a rules-based environment. Or those who feel they’ve been unfairly passed over in the promotion stakes and acknowledge their future is probably best organised elsewhere. Often these types flourish; I’ve seen this on many occasions. Interestingly, they often recommend previous colleagues to join them. A great endorsement for the company they work for now.
It’s important to understand the motivations in both instances. You can sometimes hire big names that will succeed in a smaller company environment. These people are able to adapt to a more hands-on accountable way of life. They don’t need the back-up and resources of a large corporation. Equally, highly trained professionals from global corporations can have spent years hiding in what can be a too-forgiving organisation. When they are eventually moved on, it can be the smaller companies that take up the slack.
“Hey, we’ve just made a great hire from Kellogg.” Only to find that Kellogg finally bit the underperformance bullet and their problem child has just been adopted by you.
The Monday Revolution (you can start on Monday)
1. First impressions are important. Make sure your image is the best it can be.
2. Describe the role in a clear, positive and dynamic way. If it reads like a job written by somebody who doesn’t understand what they’re doing, you’ll not be making a great hire.
3. Take personal responsibility for the first two points.
4. Ask candidates to provide evidence to support their claims. If they can’t, don’t hire them. And do your own digging.
5. Have a proven process for employing people. Use tests, psychologists, practical exercises. Good people won’t mind. In fact, they’ll be impressed with your diligence.
6. Hiring people is a gamble. Shorten the odds to get the best result you can. And remember, once they’ve arrived chucking them in the deep end until some meaningless probationary meeting isn’t the best approach.
Chapter 4
Sticks and carrots
Pay and reward
Not long into my eight-year tenure as CEO of Capital Radio, I was confronted with an important decision. Chris Tarrant was our number one DJ and his London Breakfast Show generated millions in advertising and sponsorship revenue. He had a fixed-term contract with some time to run. Anticipating the negotiation, his agent secured a written offer from one of our closest competitors, Heart FM, to double his pay to one million pounds a year if he joined them and left us.
To be honest, with everything else going on I could have really done without this. Furthermore, his publicist was turning up the heat by feeding the Daily Mail stories that he was unhappy with the early starts and fancied a change. The company share price reacted and I needed to solve the problem.
I needed to bite the bullet but which one?
Promote another DJ? Search the market for a replacement? Or do a deal with Chris? As you’d expect, we considered these options carefully. I discussed the situation with our board of directors at our next meeting.
One director said: “Paying the first million-pound salary is always the hardest.” He worked at a bank where I assumed this was just pocket money.
That seem to swing the mood in the favour of Chris remaining, which quite frankly was my favoured option. After much toing and froing, we reached agreement. Fortunate, as I didn’t really have a plan B we were confident in. And searching the market is always tricky. Although much later on that’s what we ended up doing.
Eventually we agreed new terms with Chris and his agent that kept him out of the arms of an aggressive competitor. The thought of him broadcasting for them and taking his loyal audience with him was keeping me awake at night.
I resolved to build a good relationship with Chris, not just rely on his agent, and groom a successor. Lessons learnt and I didn’t want to get caught again.
The truth is, I should have known better. Identifying your key executives, building relationships with them and ensuring the temptation to move elsewhere is not on their radar is pretty fundamental.
As a business leader this is a top priority. If you don’t have high-flying people around you building products, running operations or whatever your business requires, you’ll run into trouble sooner or later.
There are many things you can do to ensure a motivated workforce but one of the most difficult to get right is the tricky issue of pay and reward. In theory, it should be a relatively simple exercise. The business world is awash with experienced managers, consultants and other experts ready to help.
There are many precedents for every industry, yet what we pay and reward people seems to be as contentious as ever. Out of all the questions I get from businesses, “How should we reward our people?” is among the most frequent.
“The thing is, I don’t want to sound ungrateful, but I think I deserve more.”
“I could earn more elsewhere, what I’m paid is way below my market rate.”
“Others at my level are paid more than me.”
“New people are earning more than we do”, and many more phrases you’ll be very familiar with, no doubt.
“On reflection, I think I’m overpaid. Please reduce my salary” – yet to hear this one.
If you’re the boss, stuck in the middle between your superior (perhaps in title only) and the front-line troops, all this is the kind of pain you can do without. You don’t want to lose good people but you’ve a budget to recognise and often it’s the same people putting you under pressure. The high-flyers, confident their direct approach won’t be saved up and retaliated against at some point, feel they’re acting from a strong position.
Like everything else it’s a people problem where blanket policies and company doctrine are great in theory, but increasingly irrelevant to the individual and the everyday working world. At one time, an annual blanket pay rise was commonplace, everyone received the same and the only way of beating the system was to be promoted. In theory, it has great merit of course. Nothing to really think about. Everyone knows the rules, no one steps out of line and the company can accurately predict its labour cost. Link the rise to inflation and the whole idea can be easily justified.
I recall working at a company where there was a proud defence of the rigid pay and reward system. But what do you do when this happens?
“The thing is David, everyone here understands the system. An inflation linked rise for all and company profit share on top at the end of the year.”
A simple system easily communicated, no argument with that.
So