Hyper-Growth Through Efficiency: Theme For The New Era
With all the mixed messages in the latest election, one rings loudly for leaders: the US Government must become more efficient. US voters did not seem impressed with the billions spent on the Chips and Infrastructure acts: they want lower taxes and more accountable government.
As Elon Musk explains, reducing costs is an exercise in thousands of details. And every time you hire a manager, more expense centers are created. This week Andy Jassey (Amazon CEO) proclaims he wants fewer managers. As I discuss in my recent HBR article (Grow Your Company Through Force Multipliers), if you design around “fewer people,” your company can actually grow faster.
What does it mean to optimize your company around fewer workers? It means changing many things:
- Don’t allocate headcount without an organizational plan to grow
- Don’t hire ahead of growth with hopes that revenue will follow (Salesforce hires 1000 sales reps to sell AI?)
- Force managers to automate at ground level, and constantly rethink job roles
- Eliminate complex job titles and reduce levels, so it’s easy to move people around
- Stop paying managers for “span of control” – evaluate on output, revenue, profitability, or growth
- Double down investment in training, and start cross-training people between job families
- Tell leaders who beg for headcount to “rethink your plan with fewer people”
- Pay people with bonuses, and avoid high pay raises based on performance (it institutionalizes inequity)
- Invest heavily in AI and automation test projects, letting front line workers give you ideas
- Avoid large ERP upgrades unless you have a very clear business case
- Develop a culture of meritocracy, rewarding people for their skills and execution, not “Hitting goals.”
Lots of HR practices have to be adapted. The most important of all is the idea of talent density, enabling every individual to outperform… and rethinking how we hire, so we don’t wind up with too many people without even realizing it.
We grew up with this old idea of the bell curve: only 10% can be rated 1, 20% rated 2, and so forth. This dumb idea was supposed to force competition, so people would scramble for that highly revered 1 rating. While it logically makes sense, it has the opposite effect. If you believe (as I do) that everyone can be a high-performer, this kind of system hurts the performers of the most ambitious.
Every employee can deliver hyper-performance in the right role.
Research now shows that real team performance follows a “power curve” – a few people (the LeBron James or Steph Curry of basketball) deliver 10-100X performance than others. Other team members witness their success and find the “hyper-performing” roles of their own. If all the highly-rated slots are taken, what’s the motivation for others to excel? We want every individual to feel they can be a superstar, and we want the company to help them find this opportunity.
Rather than hire for the “missing skill” or “missing headcount” in an additive way, we hire for “force-multiplier effects.” Will this new hire exponentially increase the performance of the entire team? Or are they just “filling a seat” that seems to be empty. The latter approach is a journey toward bureaucracy; the former is the secret for super-competitive growth. (We call this “Talent Density“)
Why do I bring this up now? In a world of fewer workers, we’re all going to be short on talent. And with the accelerating power of AI, we have to think about our company as a network of super-human performers.
I can’t predict what the Feds will do, but let’s hope some of this enlightened thinking hits Washington. Yes, we have unions and other issues to consider. But even the largest institutions in the world have limits.
Today, with automation at our fingertips, any “big company” is threatened by a small one. So the sooner you think small the better.
Additional Information
The Myth Of The Bell Curve: Look For The Hyper-Performers
Were All These Layoffs Inevitable? Perhaps, But Here’s How It Happened.
People as Competitive Advantage: Certificate Course In The Josh Bersin Academy
