Bunde Walker James Yost Trent Hemann

FIRST WHO…THEN WHAT Initial thoughts: Set new direction Set new vision and strategy for company Then get people that are committed to new direction After research: First get the right people on the bus (wrong people off) and then figure out the direction.

Three Simple Truths Focus on “who”, rather than “what,” can be adapted to a changing company. The right people will eliminate the problem of how to motivate and manage people largely Great vision without great people is irrelevant.

Wells Fargo Dick Cooley – CEO Created one of the most talented management teams in the industry Focused on “injecting an endless stream of talent” into the company “If I’m not smart enough to see the changes that are coming, they will…” Dick Cooley

Wells Fargo When banking industry fell 59% behind general stock market, Wells Fargo outperformed the market by over 3 times. Almost every executive went on to become a CEO of another company.

Bank of America Followed the “weak generals, strong lieutenants” model Strong lieutenants will stick around if weak generals are picked. Weak generals for Bank of America would wait for direction instead of seeking solution to problems.

Bank of America After losing $1 billion in the mid 1980s, they started to recruit strong generals. Most executives were recruited from Wells Fargo. New strategy created an upward climb

“Genius” Model “Genius With A Thousand Helpers” One genius is the driving force in company’s success. Doesn’t need a management team. Effective unless genius isn’t there to make decision.

Jack Eckerd and Cork Walgreen Jack Eckerd (Genius) Cork Walgreen Picked the right stores to buy Which stores should go in what location. Had no executive team Picked the right people to hire Which people should go in what seats. Best executive team in the industry Selection of a great successor

Teledyne (A genius with a thousand helpers) Henry Singleton-CEO Made every decision Created enterprise with 130 profit centers Exotic metals to insurance. “…Teledyne is not so much a system as it is the reflection of one man’s singular discipline.” Forbes Stepped away from day-to-day management Entire enterprise began to crumble

High Incentives=Great Results? Analyzed use of stock, high salaries, bonus incentives, and long-term compensation No systematic pattern linking executive compensation to the process of going from good to great. GTG executives received LESS cash Not HOW you compensate, it is WHO you compensate

Eric E. Schmidt Chairman/CEO of Google Former CEO of Novell Former CTO of Sun Microsystems In 2009, Compensation cut back 52% in order to lift profits during the recession Salary of $1 for five consecutive years schmidt-google-ceo-g_n_ html

Nucor Can not teach work ethic Opened up plants near real farming communities Created environment where hard-working people would thrive Greater weight on character attributes

Rigorous, Not Ruthless Tough places to work Ruthless Hacking and cutting in difficult times Rigorous Consistently applying standards at all levels Deal with issues up front

Rigorous Cultures Wells Fargo acquired Crocker Bank 1,600 Crocker managers gone the first day Wells Fargo replaced their own managers in the case where a Crocker manager was more qualified Need to be “Rigorous” not “Ruthless”

How to be Rigorous Packard’s Law Growth rate in revenues faster than growth rate in people; cannot build a great company Get and keep enough of the right people From top to bottom Do not compromise or settle

Circuit City Silo Understood Packard’s Law Spent the bulk of his time hiring the right people Took off beating the general stock market 18.5:1 Did not follow Packard’s Law Focused his time on the right stores to buy Could not perform basics Was bought out by a foreign company

Get the right people Get people who don’t need to be managed When making business changes don’t fire, retain the best Many times character traits are more important than technical knowledge

Act when a decision is needed Waiting is not a good strategy Take extra time to make sure you hire the right people Focus on getting the best people in the right spot Move people around Square pegs in square holes

When to make a change Would you hire again? If an employee said they were leaving, would you be disappointed or excited? Put your best people on opportunities Build opportunities, don’t manage problems

Hire people you want to work with Try to keep the right people Don’t fire people when making change, the best people will embrace change Hire people who love what they are doing and want to build something great Company ambition, not personal ambition

Hire Confident People Don’t hire people who follow blindly Hire people with confidence to disagree when it is needed Argue and debate until the best answer is made Stand behind the decisions the company makes

Have fun It is important to first worry about who, then what When hiring, be rigorous, not ruthless Enron If in doubt, postpone hiring Google ads in New York magazine

3 main points First get the right people on the bus (wrong people off) and then figure out the direction. The good to great leaders were rigorous, not ruthless, in hiring decisions. Hire people you want to work with.