Does Fred Flintstone drive growth?
In some cases, maybe sort of. But would you bet hiring a leadership team of Fred or a team of Clayton Christensen and Jeff Bezos types? I think of it as playing a hand in poker. Some hands may win but some hands always win. The analogy breaks down on on key point. Hiring leadership does NOT have to be a game.
Today, looking at executive teams of thousands of companies indicates more focus on functional needs and next to nothing in terms of hiring for mindset.
Some companies excel at it. many are obvious names but some are sleepers.
Below is a sample of companies doing it right (upper right quadrant).
The way to read the chart:
X-Axis: Changes in net income over a 10 year period (2011 to 2021) connected to hiring better people over the same period of time. So if you keep hiring better people and net income keeps improving you end up in the upper right quadrant. If net income keeps improving yet the mindset of leadership is degrading over a ten-year period you end up in the left upper quadrant.
Y-Axis: hiring employees year over a year improvement.
At first glance you would think this is just a chart that connects improvements in net income to increase his employees. It’s not. It connects hiring certain types of people to net income. So it’s combining mindset advancement and net income together on the x-axis. You can see some of the examples that I’ve done quite well over a 10 year period.
This is a snapshot of 10 years all at one time but you have to picture each company has danced around this chart over that period. Many companies that are in the upper right quadrant started off in the lower left quadrant or at least at the zero, zero mark.
Companies that are trending from the lower part of the magic quadrant and going up towards the right are the ones that are investable or you just need to buy them. Sometimes they’re small sometimes they’re too big to purchase. You’re looking for companies that are improving the mindset and almost 9 out of 10 times the financials will come along within one to two years.
When you see companies that have better people leaving than those that are joining, the financials are not going to improve. You’re going to remove people and that momentum starts to set in and it gets harder and harder to bring in better mindsets.
Where are you on this chart? Where should you be? What aspirational goals change the mindset of who you hire?