There are warning signs for you to watch
One of the innate skills that most entrepreneurs share in common is the ability to attract people to their ideas and causes. It’s almost like having a superpower to be able to bring in the right people around you–especially when you’re at an early stage in your business and you can’t yet offer a lot to people in terms of compensation or earning power — it’s all vision and opportunity.
But as a business scales, it can be difficult for the entrepreneurs to remain the sole recruiter for the business. That can quite quickly become a constraint on the growth of the business. The result is that entrepreneurs have to hand off and delegate the recruiting of new team members to other leaders inside the business.
The question becomes: Do you have the right leaders in place inside the organization to recruit the same level of talent that you can?
A-players recruit A-players
One of the topics I’ve written about before centers around the idea of categorizing the talent inside your business as belonging to one of three groups: A, B, or C players.
It turns out that when you have A-level talent in leadership, they tend to attract other A players around them. That’s because A-players enjoy learning from other people who might be as capable and ambitious as they are. A-players want to go work for an A-level leader because they enjoy working with someone who will drive them and teach them.
In other words, if you have A-level players in leadership positions inside your business, you’re well on your way to recruiting and retaining an A-level workforce.
Who do B players recruit?
The more interesting question centers around the dynamic when you have B-level players in leadership positions. Whom do they tend to attract? While the obvious answer might seem to be that B leaders attract B players, the truth is that B leaders actually attract C players–and very few A players. Why? Because B-level leaders tend to be more threatened by anyone who is similar or, worse, better than they are. Their insecurity is what makes them B-level leaders. And the cascading impact is that they will bring inferior talent into the organization as a result.
Consider how there are some people inside an organization who are functionally strong in one area, but no one wants to work for them. By definition, that means they shouldn’t be in a leadership position at the risk of losing your top talent.
In case you were wondering, C players should never make it into leadership roles. If they do, then your organization is really in trouble.
Watch for turnover
When it comes to assessing the leadership talent inside your organization, conduct an informal survey two levels down from you. What kind of talent do you have?
One marker to watch for is turnover rates under a particular leader–especially when it comes to losing A players. A-players simply won’t stand to work for a B-level leader for long, which is a great leading indicator for you to watch for when looking at your top performers inside the company.
Now I know some CEOs out there might challenge this by saying that they will keep recruiting top talent and just stick them underneath a B-level leader. But as I’ve said, that’s only a temporary solution as top players will eventually leave.
This is such an important dynamic for a growing company to understand because when you have leaders in place who can attract, develop, and retain top talent, it can drive your business to the next level. But if you have the wrong players in place, it can hold your organization back in devastating ways.
Promoting from within
When you do have the right leaders in place, it leads to a kind of virtuous cycle inside the workplace. For example, I worked for an organization that had a CFO who was a true A-player when it came to recruiting and retaining talent. People loved working for him because he gave them opportunities to grow and challenge themselves–which only made them stronger players over time.
But this CFO was also generous in terms of promoting the people he developed to other leadership positions inside the company. At one point, someone realized that every VP inside the organization had been recruited and developed by this one CFO. In other words, he was an incredible talent developer who actually enjoyed bringing A-level talent into the company and then seeing them thrive in new positions of leadership. As a result, the company was incredibly strong at attracting and retaining top talent over time.
The secret to scaling
If you want to continue to scale your business over the long run, you’re going to need to lean on lots of top talent to get there. But you won’t be able to attract and retain those A players unless you ensure that you already have A-level leaders in place. Otherwise, you’ll lose your best people and wind up with a mediocre workforce as a result.