First off, we understand you’ve heard “getting the right people on the bus” a million times; we are not dwelling on this mantra of startup technique books. The purpose of this post is actually to challenge the notion with a fresh set of eyes and see if today’s business research is saying otherwise. Before we get into that, let’s have a brief overview of the idea.
The most notable book that brought the idea into the modern culture was Jim Collin’s Good to Great; he coined the term “Who, then what.” Jim Collins and his team looked at over 1400 companies, painstakingly researching for over five years. The baseline criteria for the pool was that the companies were performing good or better in traditional terms of return on investment. Out of 1400+ “good” companies, only 11 of them did exponentially better. These were the great companies.
After the years of research were completed, Good to Great comes to some pretty clear conclusions around differentiating features of the great companies:
- The Flywheel Effect – The idea that consistent force over long periods of time builds momentum. Companies that built momentum versus looking for quick fixes always pulled ahead.
- Who Before What – Getting the right people on the bus and in the right seats, but also getting the wrong people off the bus. Many times, Collins and his team point out this is the most important part because it’s actually the source for the other practices of success.
- Fox or Hedgehog? – The idea that a fox knows many concepts in hunting, but a hedgehog knows one overarching simple thing: defend itself. Simplicity is key to great leadership strategy. A Hedgehog Concept is made up of the intersection of what they could be the best at, the core financial driver of the business, and what their team was passionate. The companies that had a Hedgehog Concept were the ones that had clarity and therefore excelled.
- The “Stop Doing List” – As a business leader, you will always have limited resources for pushing your company forward. This is true even of the billion dollar companies. This concept of the “stop doing list” states that in any environment of limitation, it is just as important to stop certain processes as it is to have “to-dos.” Trimming away the fat, so to speak, is just as important as creating the new.
Collins also states “good is actually the enemy of great,” meaning that no company achieved greatness by accident. Many times a company that was doing “good enough” had no driver for change. Once a group of leaders came in that set their sights on being great and adhered to the above principles, this is when greatness was achieved.
We hope this review was informative, but now back to the question at hand:
So, does the idea of “getting the right people on the bus” still hold water today?
The short answer, “Yes and No.” But it’s not what you would think…
The overwhelming evidence to date still states “YES,” having the right people in the right positions is the most important factor for long-term company greatness. More books and researchers have come out to reiterate or reshape the concept of “getting the right people on the bus” for company success. One of those recent notable books, Who, directly addresses the fact that most companies only have 50% successful hires. The book re-emphasizes the importance of your human capital and how the success of the company hinges on hiring.
For more detailed information on Who take a look at our previous post; how to select top tier candidates for achieving KPI goals.
So, why “No?” …Well, if you are a startup, it’s different.
For a startup, it’s all about… Timing.
Startup icon Bill Gross revealed in his latest TED talk that timing is the core driver of success (with “team and execution” trailing in a close second). Bill Gross is the founder of Idealab, a technology incubator that opened its doors in 1996, making it the longest lasting in existence. Idealab has created over 150 companies, 45 of which have IPO’d or been acquired, Bill definitely has his finger on the pulse of the startup scene. You can see the TED talk below.
With that being said, what did Bill mean about “timing” as the most important factor for startups? Bill defines timing in the following way:
Is the idea way too early and the world’s not ready for it? Is it early, as in, you’re in advance and you have to educate the world or just right? Or is it too late, and there’s already too many competitors?
Mr. Gross is talking more about market timing, but there are definitely hints of things that smell a little like luck as well.
Bill analyzed 200 different startups and took a look at timing, team, idea, business model, and funding. Of those factors, the timing was the driver for 42% of the successes. With this being said, team/execution was trailing right behind with 32%.
The lesson is (even for Startups) out of the things you can truly control, getting the right people on the bus is still the leader.
Thank you for taking the time to read this post, we hope you enjoyed it. If you have any questions about team building, staffing, or anything else please feel free to reach out. We are here to help.