Good To Great, by Jim Collins

How to Be Rigorous
Chapter 3, pages 57–58

Using data from Moody’s Company Information Reports, we were able to examine the pattern of turnover in the top management levels. We found no difference in the amount of “churn” (turnover within a period of time) between the good-to-great and the comparison companies. But we did find differences in the pattern of churn.⁴⁸

The good-to-great companies showed the following bipolar pattern at the top management level: People either stayed on the bus for a long time or got off the bus in a hurry. In other words, the good-to-great companies did not churn more, they churned better.

The good-to-great leaders did not pursue an expedient “try a lot of people and keep who works” model of management. Instead, they adopted the following approach: “Let’s take the time to make rigorous A+ selections right up front. If we get it right, we’ll do everything we can to try to keep them on board for a long time. If we make a mistake, then we’ll confront that fact so that we can get on with our work and they can get on with their lives.”

The good-to-great leaders, however, would not rush in judgment. Often, they invested substantial effort in determining whether they had someone in the wrong seat before concluding that they had the wrong person on the bus entirely. When Colman Mockler became CEO of Gillette, he didn’t go on a rampage, wantonly throwing people out the windows of a moving bus. Instead, he spent fully 55 percent of his time during his first two years in office jiggering around with the management team, changing or moving 38 of the top 50 people. Said Mockler, “Every minute devoted to putting the proper person in the proper slot is worth weeks of time later.”⁴⁹ Similarly, Alan Wurtzel of Circuit City sent us a letter after reading an early draft of this chapter, wherein he commented:

Your point about “getting the right people on the bus” as compared to other companies is dead on. There is one corollary that is also important. I spent a lot of time thinking and talking about who sits where on the bus. I called it “putting square pegs in square holes and round pegs in round holes.” …Instead of firing honest and able people who are not performing well, it is important to try to move them once or even two or three times to other positions where they might blossom.

It might take time to know for certain if someone is simply in the wrong seat or whether he needs to get off the bus altogether. Nonetheless, when the good-to-great leaders knew they had to make a people change, they would act.

But how do you know when you know? Two key questions can help. First, if it were a hiring decision (rather than a “should this person get off the bus?” decision), would you hire the person again? Second, if the person came to tell you that he or she is leaving to pursue an exciting new opportunity, would you feel terribly disappointed or secretly relieved?