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Advice for Entrepreneurs, Editorial

Why Winners Choose “A” Players

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It’s really hard to build a successful organization that will endure the test of time.   Indeed, fewer than half of all business ventures, according to the Small Business Administration, will last for five years or more, and many that do last that long will never be truly successful ventures that can withstand the death or departure of the founder.  That’s why it’s critical to start hiring the best people available early in the life of the organization, when growth is both critical and formative.

Starting a new venture, whether it be a business or a non-profit, is the easy part. The business already has a visionary leader (you, presumably).   But who will the first hire be?   Choose carefully, because that person is going to be half of organization, at least for starters.

As it’s Super Bowl time, I’ll use the football draft analogy: if you were starting a new football team, who would be the first player you’d select in the draft?   Aaron Rodgers is an “A+” player – a Super Bowl MVP, but he’s expensive, and he already has a good job. Keith Wenning by contrast is young, had a very successful college career, and only earned $102,000 last season. Who is this Keith Wenning you ask?   He’s a “B” player.   You can draft a dozen such players and try to coach them up, but is that a winning formula?  While you’re “building” your team, your competition is building a brand and taking your market share.

I’ve been advising business owners and entrepreneurs for twenty years, and the difference between companies with great managers and sales professionals and those with mediocre teams is huge.  For example, I represented a business owner whose business was replacement glass products (think broken windows and bathroom remodels).   His average sale was around $100.   On $20 million in sales he generated operating profits of 25% – compared to a competitor that was more well known as a result of bigger projects, but which employed lower-cost sales reps and barely broke even on $30 million in sales.

Back in 1997, Steve Jobs was interviewed for “In the Company of Giants”, in which he observed “a small team of A+ players can run circles around a giant team of B and C players.” Back to the football analogy, every player on the 2014 Tampa Bay Buccaneers was a highly paid professional – but they only won 12.5% of their games this season. Aaron Rodger’s team, the Packers, had a payroll that was about the same, but they won six times as many games.   Was it just because of Aaron Rodgers?   Maybe not, but it didn’t hurt.

I’ve run a small business, with 15 employees, for several years now. This business was started in 1987, and I am proud to be the third president of the firm. My firm has lasted because throughout our history we have hired high achievers, “A” players, first round draft picks.   Winners recognize each other. They appreciate and respect one another and they have an appreciation for the fact that winning teams are hard to find. As a result, we have low turnover and high employee satisfaction, and 28 years in, ours is an organization that is built to last.