In a blog post today, David Maister, in his usual elegant style (you have to hand it to the Brits -- I think Maister could tell you your pants were down and make it sound elegant) raises the tricky issue of getting people in an organization to adhere to standards. He solicits suggestions. I have one: if they don't adhere, fire them.
It's actually a little more complicated than that. Keep reading.
Adam, a good friend of mine is a very senior person at a very large technology consulting company. This company, which it's quite likely you have never heard of, has several thousand employees all around the world. I recently had a conversation with him about how he gets his people to go out and bring in business. What he told me is instructive, and it speaks to Maister's question.
The first part of this process is making it clear to the employees that advancement requires bringing in a certain amount of business. Period. At Adam's company, if you do not play a significant (not simply showing up for the occasional sales call) role in bringing in at least $5 million worth of business, you are never going to rise beyond a certain level in this company. That's explained at the beginning, and it's a consistently enforced policy. In a law firm, if you didn't develop a certain quantity of business, you were not going to make partner. Also period.
Second, the compensation structure is set up so that if you do advance beyond this level, you will make a LOT more money. Adam's company ranks positions on a scale of 1 to 100. So, if you're a level 45, say, the maximum bonus you can receive is 20% of your salary. If you're a 60, it's 40%. If you're an 80, it's 60%. And if you're above that, it's 100%. In other words, you can double your salary if you get promoted. In a law firm, if you become a partner you will make a lot more money, but you can institute this kind of bonus program for associates.
Third, and most interestingly, they adhere to the General Electric policy of routinely firing the bottom 10% of their workforce. This is known informally as the "Rank and Yank" method, and is more politely described as the Vitality Curve or the 20-70-10 method.
Under this method, employees (or associates) are ranked according to a set of objective criteria. This is exactly like the grading curve law schools use, so it's not unfamiliar to lawyers. The top 20% are the most productive -- these are the rock stars. I described one in yesterday's post. They are rewarded accordingly. According to Jack Welch, former CEO of General Electric and the most well-known proponent of this approach, these "A" players have the following characteristics:
- filled with passion
- committed to "making things happen"
- open to ideas from anywhere
- and blessed with lots of "runway" ahead of them,
- have charisma, the ability to energize themselves and others,
- can make business productive and enjoyable at the same time.
- and exhibit the "four E's" of leadership:
- very high Energy levels
- can Energize others around common goals
- the "Edge" to make difficult decisions,
- the ability to consistently Execute, or deliver on their promise
The next 70% are the "B" players. Then you have the bottom 10%, the "C" players. Everyone is reviewed annually, and at those reviews, the "C" players are fired.
This method needs to be modified a little for lawyers, I think. Business development is a critical part of this evaluation for them, but nobody expects a first-year associate to develop any business. They're too busy learning to be lawyers.
What would make sense, then, is a phased approach. Business development results constitute a weighted percentage of your evaluation, with the weight increasing annually. So, for the first two years, Biz Dev doesn't matter at all. Starting in the third year, it's 10% of your score, increasing by 10% annually. Therefore, for purposes of ranking and compensation, a fifth-year associate would have 30% of their score based on Biz Dev. This would increase to 50% by the seventh year, when partnership becomes a possiblity.
The answer to Maister's question -- how do you get people to do what you want them to do? -- is actually pretty simple. Simply be willing to put your money -- and your pink slips -- where your mouth is.
