The first time I heard the concept of “fewer, better people” was in an executive education session taught by my colleague and mentor Earl Sasser several years ago. I have been captivated by the idea ever since, the idea of building an organization that cultivates and rewards excellence in its employees — and makes it sustainable by minimizing the size of the team. I have rarely seen the fewer/better HR strategy in practice, however. In a recent NYT interview, Kip Tindall, CEO of the Container Store described his version of it:
…one great person could easily be as productive as three good people. One great is equal to three good. If you really believe that, a lot of things happen. We try to pay 50 to 100 percent above industry average. That’s good for the employee, and that’s good for the customer, but it’s good for the company, too, because you get three times the productivity at only two times the labor cost.
A significant obstacle to enacting this strategy is that you need a great deal of confidence in your ability to tell the difference between good and great employees. And then you need the discipline to say no to the good ones, which can be particularly difficult in a growth context. But the merely good can destroy a culture of great. Finally, you need to design an environment where great people can work effectively.
None of these steps is easy. Take the average fast food restaurant as an example. Now try to redesign the restaurant to require a third of the people, each making twice the current wage. The current selection and training processes would have to be scratched. Jobs and incentives would have to be thoughtfully reconsidered. Where to begin? Start with this workforce in mind, and pull out a clean sheet of paper. How could their work be done differently?
The answers aren’t obvious, but what’s the potential payoff? Employees, customers and owners who all love interacting with your business.