FIRST WHO .... THEN WHAT

“There are going to be times when we can’t wait for somebody. Now, you’re either on the bus or off the bus.” – Ken Kesey

*Transformation

Get the right people on the bus, the wrong people off, and then figure out where to drive it.

Must begin with “who” rather than “what” – Reason, if people are on the bus because of ‘where’ then what happens when the bus changes direction?

The right people on the bus eliminate the need to motivate and manage.

Get the wrong people off the bus – great vision without great people is irrelevant.

In the 1970’s CEO Dick Cooley ( Wells Fargo), instead of mapping out a strategy for the deregulation changes he hired outstanding people whenever and wherever they found them, often without any specific job in mind. $1 invested in Wells in 1973 was worth $74.47 in 1998.

*Not a “Genius with a Thousand Helpers”

The comparison companies were more concerned with getting one individual as the primary driving force for the company’s success. The genius at top rarely built strong management teams – they didn’t want one. All they wanted was good soldiers, but when the genius left the soldiers couldn’t make decisions on their own.

*Difference in Philosophy

Good‐to‐Great Companies

Level 5 + Management Team

First Who – build a superior executive team

Then What – figure out the best path to greatness

Comparison Companies

A Genius with a Thousand Helpers

Level 4 Leader

First What – set a vision for where to drive the bus

Then Who – enlist a crew of highly capable helpers

*It is who you pay, not how you pay them

The study found no systematic pattern linking executive compensation to the process of going from good to great. The use of stock options, high salaries, bonus incentives, or long term compensation weren’t a factor in making the transition.

The most important factor was getting the right people on the bus. Nucor stated the most important asset is the right people, and placed greater weight on charter attributes than on specific educational backgrounds, practical skills, specialized knowledge, or work experience. Nucor returned 5.16 times the market from 1975 to1990.

*Rigorous, Not Ruthless

If you don’t have what it takes, you probably won’t last long. To be rigorous means to apply exacting standards at all levels. During most acquisitions the good‐to‐great companies would terminate large portions on the old firm’s employees, only keeping the best. When Wells Fargo acquired Crocker it terminated 1600 employees. There mind set was, “If they aren’t going to make it on the bus in the long term, why let them suffer in the short term.” They thought it was more ruthless to let someone linger around who they would have to fire in the end.

*How to be Rigorous

Practical Discipline

1. When in doubt don’t hire, keep looking.

2. When you know you need to make a people change, ACT.

3. Put your best people on your biggest opportunities, not your biggest problems.