The Talent Density System Part 2

Mike: Welcome again to the Better Leadership Team Show. This is gonna be, let’s see how I can say this without being confusing. This episode is the third episode in a series of episodes talking about the Signature Framework, the Talent Density System for my new book, the Strength of Talent. And it’s the third episode, but it is Talent Density System part two.

That’s the confusing part, but ah, let’s simplify it in the last episode. Which you may have listened to last week, or you may have listened to two minutes ago. 

the last episode I outlined the five steps of my talent density system, which is to, come up with a solution,which was created to come up with a solution to come up with a problem of most strategies failing, and the fact that traditional performance management doesn’t work.

So I came up with my talent density system last time I talked about. The five steps in that talent density system. [00:01:00] The first step is setting expectations. Second is assessing performance against those expectations. The third is taking massive action on that assessment. The fourth is driving accountability, specifically leadership accountability for

Improving strength of talent within your organization. And the fifth is cascading that down through the organization. And while when you hear those five steps, you might say, oh, that’s not rocket science. I do some of this, I do some of this. The power is bringing this all together into one cohesive process.

So in the last episode. We discussed or we didn’t really discuss. It’s just me talking. So, I talked about the, the overview and then drilled, deeper into the first two steps, setting expectations and assessing performance. 

On this episode, I’m gonna cover the last three steps and drill in. So step [00:02:00] three is act, taking massive action on that assessment of performance.

And if you remember, the assessment of performance was on, what we, what I defined as the Talent Density expectation model. It’s assessing performance against not only productivity, but culture fit. We also talked last time in the assessment step that there were four categories of performance that were an outcome of the assessment, high performing, medium performing, low culture fit, and low producing.

If you need to go back and listen to that episode, go do it to better understand what those different categories are. But right now I’m gonna dive into actions. For each of those categories that you ought to be taking with and for each of your direct reports. And remember, the number one driver of profit growth is people growth.

So people growth needs to be your number one priority. These actions we talk about are the most important [00:03:00] actions you can take to improve your team. And your company. 

So actions, when we talk actions for the different levels of performance, we wanna move people kind of up into the right on that. you know, on that talent density assessment matrix, moving as many folks as we can into the high performing category.

We’re gonna start with actions for your highest performers, your high performing folks, people who are high in both productivity and culture fit. Why do we start there versus starting with some of your problem children that are lower performing. We start there because most leaders, including me for many years, most leaders overinvest in their low performing folks and underinvest in their high performing folks, and that’s a problem when we invest.

A significant amount. The majority of our time in our [00:04:00] lower performing folks, and we’re gonna talk about actions for those folks. We’re not ignoring them, but when we neglect our high performers and we focus most of our time on our low performing folks, what happens is think about it and picture it as you’re dragging a whole bunch of people up.

 You’re dragging them up to average. Typically a low performing individual is not gonna become a high performing individual. Does it happen? Of course it does, but for the most part, you are dragging them up to some acceptable level, dragging them up to average. And while you’re spending all that time with your lowest performing team members and you are ignoring.

To a large degree, your highest performing folks, you’re not challenging them, coaching them, mentoring them, raising the bar, re-recruiting them. You’re not doing a whole bunch of actions we’re about to talk about. What happens is those folks get stale. And their performance may dip a little bit, or if they’re not growing with you, [00:05:00] they’re gonna grow with somebody else and they’re gone from the organization.

So the result of spending so much of your time with the low performing folks is we get better low performing folks and worse high performing folks. And if you picture that, you wind up somewhere in the middle with something I like to call polished mediocrity. And that’s no fun and it’s death to your organization.

So we’re gonna start with high performing actions and this is a laundry list. You’re not, I’m not suggesting you do all of these things, but when you think of your high performing folks, pick one or two or three that you’re gonna work on over the next 30, 60 or 90 days. So let’s go. Actions for high performing folks, number one, I have seen more superstars leave out of boredom than anything else.

You need to challenge your highest performing folks. Challenge them to learn something new. Do something new, be someone new. Challenge them with a difficult project. These people want to be challenged. They wanna improve. [00:06:00] So number one, challenge. Number two, related to that, increase their responsibility.

Especially if you feel like you are stretched too thin, what could you do to increase their responsibility? Now, is there such a thing as going too far with this and burning people out? Of course there is. So this stuff isn’t black and white, but many high performing individuals are looking, they’re striving for more responsibility.

So can you increase their responsibility next, invest in them. Invest time, invest money. coach them, mentor them. hire a coach for them. Send them to training. Send them to an industry event, to an industry event. These are the folks you’re gonna get the greatest return on investment from. Remember from the first video in this series why great strategies fail?

I talked about the one equals three philosophy that says one superstar equals the productivity of three mediocre performers. If you could [00:07:00] coach a superstar to improve or get better, or at least retain them, that’s the best return on investment you’ll get. And imagine coaching a low performer to improve by 10% versus coaching a high performing individual to improve by 10%.

Where do you get a greater ROI? The 10% of the high performing individual is much higher, so we wanna invest in them. Next, we wanna remove obstacles. If they’re following a crappy process, fix the process if that’s the obstacle. Or better yet, challenge them to fix the process. If you’re micromanaging them, get the hell out of their way.

Sometimes the biggest obstacle in the way of a high performing team member is all the low performing folks you got running around. So you gotta deal with them as well. Next, promote them . Some of them might deserve a promotion, reward them. Monetary, non-monetary recognition. Recognition. Could be formal recognition.

It could be at a [00:08:00] monthly all hands meeting. You know, Hey Mike, stand up. Let’s all applaud Mike for the great job he did on blah, blah, blah. Or it could be a very heartfelt private pat on the back. But recognize these folks. Let ’em know what a great job they’re doing. Exposure is another one, and this is one most leaders miss.

Exposure could be, external exposure or internal exposure. External exposure is, you know, give them more industry exposure, make sure they’re getting to industry conferences. Maybe they ought to get on stage at an industry conference. Maybe they benefit and your clients would benefit by getting them more exposure to your clients or vendors or suppliers.

And then there’s internal exposure. Maybe this is someone who’s not on your senior leadership team and you have a senior leadership team meeting every week. Maybe you go to that person and say, Hey, do you know every Tuesday from 10 to 11, I’ve got that time blocked off to go to the senior leadership team meeting.

I want you to block it off next week because the work [00:09:00] you did, managing our new product development process is such a great example for everyone else to learn from. I’d love for you to come in the senior leadership team meeting and tell us more about what you did. You may not be excited about your weekly meeting because it’s weekly, but that person is thrilled, is telling everybody they know.

They get to go to the senior leadership team meeting and they get great exposure, and maybe that’s the first step in them being on that senior leadership team one day. So exposure’s important. Career planning. When is the last time you sat with one of your highest performing individuals and found out where they want to go in their career and how you can help them get there?

Lastly, re-recruit them. please don’t wait for an exit interview to find out why one of their your highest performing team members left. Have a stay interview now. Sit down with them. Let them know how important they are to the team. Ask them what they love about what [00:10:00] they do, and brainstorm with ’em about ways to do more of that.

What frustrates them. Brainstorm with ’em how you could fix that. I’ve had leaders ask the scary question, what would it take for you to leave? Wow. If you have a good, open, honest relationship with these folks, and for your highest performing folks, at least I hope you do. You’re gonna get some really important, honest answers.

If you ask someone and they come back and go, well, I’ll be honest with you. You know, I’m saving up for my first house. If someone gave me a 20% increase in pay for the same role, I think I might take it now. Does that mean you give them a raise right away? it, maybe not. But wouldn’t you rather know that information so you can deal with it if you want, before they leave?

So re-recruit them. So those are a bunch of the great actions you can take with and for your highest performing team members. 

Let’s go to the [00:11:00] medium performing folks, and this is an interesting group. These are folks that are not performing quite high enough in culture fit and or productivity to be high performing, but they’re not low enough to be in one of the two low performing categories, low producing or low culture fit.

So what do we do? Well, we’ve got a few options here. Number one, of course is work with them to improve in whatever area of productivity they’re falling down on. If there are a couple of core values, they’re occasionally having some problems with, work with ’em on that, coach them, mentor them, whatever you need to do there.

So of course you’re gonna work to try to coach them up . But if that’s not working very well, and if they are someone who is very high in culture fit, but they’re lacking in productivity, there’s a wonderful option that will allow you to move them from medium performing to high performing literally as soon as you make the decision.

And that’s to [00:12:00] change their role. Imagine you’ve got a salesperson. Who is just unbelievable at initiating new relationships at building and maintaining those relationships, but they’re not hitting their new revenue goal because they’re just not great at closing the deal. They don’t have that sales kind of killer instinct to close the deal.

Well, what if you can change their role? To a role that, I don’t know, call it business development, where they’re focused more on initiating, building, maintaining relationships with great potential referral streams, but it’s not their job to close the deal. If that was a valuable role within your organization, moving them into that role, we’ll probably move them from medium performing to high performing right away.

Now, you don’t always have that. Option available. Sometimes what a team member is strong and where their natural strengths are may not be something that’s important to you as an organization. [00:13:00] And if that’s the case, we move to our third option. And our third option is a tough one for medium performing, but it might be that you coach them out.

Of the organization. Now, here is where an interesting question comes up. People ask me, Mike, is our goal to have all of our team members up in the high performing category? And it’s a nuanced answer. I absolutely think we ought to strive to get there. Why not? Do I ever think we actually get there? No, I don’t think you have everybody sitting in high performing, and even if you do, you’re gonna challenge those folks and maybe raise the bar on their goals and that may change things.

But while our goal is not our, our actual target is not at some point that we’re all high performing, and while we’re striving to get there, there are two types of roles. Within an organization where I believe good enough is not good enough, [00:14:00] where if they are medium performing and don’t have the potential to get to high performing in the next three to six months, I don’t think they belong on the team.

And here are the two types of roles. One is anyone on your senior leadership team. We can’t afford mediocre performance on our senior leadership teams. I have very rarely found high performing folks that work for medium performing folks very long. They either go somewhere else where they can grow or they become medium performing themselves.

The sheer impact of a senior leadership team member means if they are not a high performing individual, or don’t have the ability to get there in the next three to six months, they don’t belong on the team. So that’s one type of role where we need high performing. The second type of role is any role that is a strategic differentiator for you as an organization.

Something that [00:15:00] differentiates you. in the hearts and minds of your clients, something that is at the heart of your strategy. And I’ll use Netflix as an example. Someone in accounts payable for Netflix, that’s probably not a strategically differentiating role. My guess is for Netflix, if they have a 20 year accounts payable clerk that’s just doing their job but not going over and above, they’re solid, medium performing, they’re probably not gonna fire that person for being a solid performer.

However, think about what differentiates Netflix. I would say one area is their user interface, specifically their recommendation engine, and what thumbnails show up for me versus you. They can’t afford mediocre. That’s a big part of who they are to get us the binge watch, the next thing and the next thing related to that.

I think anybody driving [00:16:00] their content creation and content selection good enough, isn’t good enough there. They need great. What makes your company, and in those roles, if someone is medium performing. Without the strong potential to become high performing in the next three to six months, I believe you need to coach them out.

So those are the actions for medium performing. 

Let’s go to low performing. The two low performing categories are low producing and low culture fit, really important philosophy that I have that clarifies some actions for low performing folks for me. And it’s that everybody has the ability to be a superstar somewhere.

Maybe not in the role they’re playing in your organization, maybe not in your organization anywhere, but I believe everyone has talents where [00:17:00] they could thrive somewhere. And I believe this not only as a leader, but as a father. See my son has something called Asperger’s Syndrome. So this story was near and dear to my heart.

I remember a few years ago I saw on the news a high tech company was hiring only autistic adults, and if you don’t know what Asperger’s is, it’s on that autism spectrum. They were hiring only autistic adults to do their system testing, testing their code, because those folks had the ability to hyper focus.

On something and notice small changes and that’s what they needed for their system testing. They could do that at a level much better than you and I unless you are on the autism spectrum. So I do believe everybody has the ability to be a superstar somewhere. And the longer we keep a low performing person around, the more we’re not even, not only hurting us and the team and the company, maybe our clients, but we’re also hurting them.[00:18:00] 

So let’s go to low producing. Low producing folks are folks that are living the culture in an okay level, maybe even in a high level, but their productivity is very low. What do we do there? Well, it’s simple, number one. You know, there are three options here. First option is coach them up. Try to coach them up, is what could you do to coach them, train them, mentor them, get them some help to improve whatever.

Piece of productivity they’re falling down on. If you can’t do that, just like we talked about for the medium performing folks, there may be an opportunity to change their role. If they’re high in culture fit, but low in productivity, those folks tend to be coachable at some level.

Well again, what are their natural talents? And just like the medium performing folks, if you can find a role that better leverages their [00:19:00] natural talents, makes their weaknesses invisible ’cause it’s not part of their role anymore. They can go from low performing to high performing overnight Now. If you can’t do either of those things, if you can’t coach them up or change their role, then I believe for your sake, your company’s sake, your client’s sake, and for their sake, you need to coach them out of the organization.

You need to set them free to go somewhere else where they can perform at a high level. Let’s move on to the last category and the second low performing category, which is low culture fit. We need to go into low culture fit situations with our eyes wide open, while low producing folks who are living the culture tend to be coachable.

Low culture fit folks, nine outta 10 times are not coachable, and it’s not ’cause they’re bad people, it’s because they’re a bad fit for your organization. [00:20:00] Trying to coax someone to live your core values that is not already living your core values is like trying to coach someone to become someone they’re not.

Can they fake it for 90 days? If you put ’em on a 90 day performance improvement plan, most can, but then they go back to who they. Or who they really are, which is not a bad person. Again, it’s just a bad fit for your organization. So that being said, for low culture fit folks, we’ve got two options. They’re human beings and sometimes you can’t coach people up.

Sometimes people are going through a difficult time that a death in the family, an illness, a divorce, something going on that’s impacted their attitude and how they act at work. So you certainly wanna try to coach them. On whatever core values they’re struggling with. But if you can’t coach ’em up, you gotta coach ’em out.

And I believe for low producing folks [00:21:00] and for low culture fit folks, the bar I like to set for my clients is you’ve got 90 days to make significant progress. And if you have it, you need to coach them out. And if you’ve got someone that you’re coaching quarter after quarter, and they’re still low performing, they’re not the problem anymore, you are the problem.

So there’s a whole bunch of actions to take at different levels of performance. 

Let’s talk a little bit about the next step in the talent density system process, which is driving accountability. And I wanna talk about two tools in there. I talk about in my book the Strength of Talent. The first tool is called The Quarterly Talent Assessment Meeting, the QTAM.

When you assess your direct reports on productivity and culture fit, the idea here is not you’re assessing them in some dark room by yourself. And then [00:22:00] maybe sending those assessments into HR so they could process them. This is a team sport. The quarterly talent assessment meeting is a time where the senior leadership team, and eventually we’ll cascade this down through the organization, but the senior leadership team gets together and shares their assessment.

Of their direct reports so they can challenge each other. What do you mean she’s a high per, you know, she’s high culture fit. I saw her cursing out the customer service team again on Tuesday. Isn’t respect one of our core values? What do you mean? Your whole sales team is high producing? We haven’t hit a sales target in three quarters.

We need to challenge each other. Assessing folks together in the room, sharing those assessments is the truth serum to this process. We need to challenge each other. Also, in that [00:23:00] quarterly talent assessment meeting, you’re not only talking about the assessment, but you’re discussing and debating the actions you’re taking For your folks high, medium, and low performance, who are you coaching up?

Who are you coaching out? You are holding each other accountable for moving your folks up into the right. So that quarterly talent assessment meeting, which is typically a 60 to 90 minute meeting, I do it with my clients as one agenda item in a one or a two day quarterly planning session. But the QTAM the quarterly talent assessment meeting is a key part of that.

And I have in my book, kind of a step-by-step in, set of instructions on. How to facilitate that QTAM. The second piece of accountability. 

The second thing that, that I believe is a real differentiator of this process from any, the others that I’ve seen, is the way we could measure performance and measure how we’re doing [00:24:00] with strength of talent.

Now, here’s what I mean. I said in the first video that the number one driver of profit growth is people growth. There’s a problem with that statement. The problem is there’s this cliche that says you can’t manage what you don’t measure. And it’s a cliche because for the most part it’s true. The number one driver of profit growth is people growth.

Do we measure profit growth? Of course we do. I just did a workshop with 15 CEOs. I could have gone around the table and said, how are you all doing with profit? And they all could have told me, maybe they would’ve need to look down at their phone first real quick. But they could have told me down to the 10th of a percent how they’re doing compared to last year and how they’re doing compared to plan.

But if I ask how they’re doing on people growth, I get answers like pretty good. I think we’re on the right track. Those aren’t [00:25:00] measures. We need a measure. We need a measure to help hold ourselves and others accountable. And that measure, I call the talent density indicator. And this will make more sense when you read the book.

Of course, I’m gonna keep encouraging you to read the book because it’s got a set of guidelines for how you actually assessing folks. But once you do. The talent density indicator is a very simple calculation. It’s the percent of your folks that are high performing, minus the percent of your folks that are low performing, combination of low producing and low culture fit.

You wind up with a number somewhere between negative 100 and positive 100 if all of your folks are high performing. Your TDI is 100% high performing minus 0% low performing. That’s positive 100%. If you’ve got all low performing, it’s zero high performing [00:26:00] minus a hundred percent low performing, that’s negative 100%.

If all your folks are medium performing, you got 0% high minus 0% low. You’ve got a TDI of zero. As you move folks up from medium to high, that number will go up. As you coach folks out of the organization that are low performing, that number will go up. The importance of that number is that it becomes a benchmark.

There’s no magic right number, but it becomes a benchmark and you, the idea is to. Trend up on that benchmark to take the actions we talked about. And this is a way to hold the team accountable. You can have a TDI for the team, A TDI for sales versus marketing, A TDI for the senior leadership team versus A TDI for middle management.

We need a way to measure this in the TDI is the way to do that last step. So remember it was step one, set expectations, step two. Assess performance. [00:27:00] Step three, take action. Step four, drive accountability. Step five. 

The last step is to cascade this down through the organization. This is not something you roll out to everyone all at once.

People will tell stories about what’s going on behind closed doors. People could either say, Hey, do you know. Quarterly, our leaders are getting together to figure out who they’re gonna fire. Oh my God. Or they could say, could you believe how cool our leadership team is? Do you know that? That our leaders get together every quarter?

Talk about us for the sole purpose of figuring out how they could better help us. We need to make sure the right story’s being told. We need to make sure that people understand the power of this process and they’re not protecting their people and assessing people high just to protect them. There is no such thing as a successful rollout of a mediocre process.

My [00:28:00] suggestion is do this top down. Start this with the senior leadership team first. Get it right for two or three quarters before you cascade it down to the organization. Get it right at the top before you cascade it to the bottom. And for now, that’s all I’m gonna say about the cascading. Process. 

So we’ve talked about the five steps of the talent density system.

we have drilled into, all five. You know, the questions I’d ask you to ponder, based on this episode is, you know, how could you better decide what actions are required to grow each of your team members? How can you better decide when you should be coaching up versus coaching out? How could you hold yourselves?

And peers on your team accountable for taking action to grow your people. Telling you, I’ve implemented this with dozens of companies. I’ve done workshops with hundreds of companies on [00:29:00] this and the power of this talent density system, the power of the ideas and the strength of talent, how to grow your people, to grow your profit are not only business changing, but life changing.

So I hope you buy the book. It’s at strengthoftalent.com. If it’s before October 15th, when this launches pre-order, you got a bunch of goodies, over $400 worth of goodies. Um, if it’s after when you’re listening to this, and I actually think this one comes out the week of launch. so, those goodies may not still be available, but you could still go, of course, order the book, the Strength of Talent.

I am. So eager to get this out there to the world. and you know, I always say if you want a great company, you need a great leadership team. I hope this episode, these last few episodes will help you get closer to that. I know the book will talk to you all soon. 

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