A-B-C Employees/A-B-C Employers
by Don Moore
The vast majority of people want to have a good job and want to do a good job. The vast majority of employers want to be good employers and do a good job of leading, managing and developing employees. It is in everyone’s best interest on both sides; good employees are productive and good employers can provide a satisfying career. That said, there are many barriers and environmental issues in business and personal life that get between intention and execution.
But, somehow the best employees and the best employers do a very, very good job of overcoming their own barriers and adapting to the issues and problems of the other. And, generally speaking, the best employees and the best employers tend to find each other. By that, I mean that great employees tend to not tolerate a company that has poor leadership and poor business practices. Likewise, great companies tend to have a low tolerance for employees who don’t pull their weight.
Look at it in terms of quality of performance. There are “A” employees, “B” and “C” employees. Likewise, there are “A” employers, “B” employers and “C” employers. Show me a company that performs in the “A” category (profitability, growth, market share, etc.) year after year, and there is a tremendous correlation between their performance and their employee team. Simply stated, the best employees drive their companies to industry-leading performance. There are certainly exceptions, but even if there are a few high-performing companies that get by with mediocre management and are populated by listless employees, they aren’t where I’d want to put my investment dollars because I know the good fortune could run out at any time.
In fact, it is fairly easy to identify a well-run company that has a high performing employee population. If you want to get into metrics, there are a number of indicators. On the employee side, you can measure such things as employee turnover and employee morale (measured by surveys). On the business performance side, you can measure the company’s performance relative to its peers using net-pretax profit, productivity, market share, rate of growth, etc. None of these is a perfect metric and all are driven by other factors. But, if you get to know any industry very well, you soon recognize that some companies outperform others year in and year out, decade in and decade out. They clearly do a lot of things well and the starting point of doing things well is people who do things well, from president to newbie, one by one, team by team. This maxim can be stated as: A company cannot outperform its employees, employees cannot outperform their management. Ignore this maxim and you’ll eventually regret it, regardless of whether you are employer, employed or investor.
The above is an introduction to a series of articles that look at what makes up an “A, B and C”both on the employee side and the employer side. On the employee side, Decision Associates has developed a matrix of the A, B, C attributes and how to improve performance for each type. On the employer side, we have developed two tools. One is “The Top 20%” Assessment. It is an assessment tool that we developed by evaluating the top performing companies across many different industries and identifying common performance attributes. The other is coldly capitalistic assessment that is based on M & A transactions: what performance attributes result in the highest transaction values when a company is sold. I’ll explore all of these in future articles.