Building a team within any organization — whether you’re a third-party property-management company or an NBA-champion team like the Chicago Bulls — is an art.
But there’s also a science to team building, a methodology that ensures that only the right people are brought onto the team in the first place. In baseball, for example, Oakland A’s General Manager Billy Beane used a system now known as “moneyball” to analyze prospects beyond more traditionally valued statistics like batting average and runs batted in. By placing a premium on undervalued stats like on-base percentage, Beane could acquire players that were overlooked by clubs with more cash, allowing him to build a roster of players who could help the A’s beat more powerful clubs — and at a fraction of the payroll cost..
At Asset Living, we’re not looking for pitchers or outfielders, but we are looking for A players, nonetheless. We know that A players are top performers who attract other top performers, and we know that the presence of even a handful of B players will cause the top performers to leave. To build our team at Asset, we use a process called Topgrading that was developed by Brad Smart, a management consultant who helped General Electric with its hiring practices in the 1980s and 90s.
According to Topgrading, the estimated cost of a bad hire — which includes resources allocated toward recruiting, training, client dissatisfaction, employee dissatisfaction, etc. — can range from five to 27 times the amount of the person’s actual salary. Meanwhile, there’s no quicker way to ruin a company’s culture than by allowing the wrong people to slip in through the hiring process.
At its core, Topgrading believes that it’s better to have a position open and empty than it is to have the wrong person in that position. This idea runs contrary to popular management beliefs that say you should fill positions quickly in order to avoid overworking current team members.
So how do you ensure that you’re only adding A players to your team?
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