The 15–70–15 ratio

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Not going to belabor this point: until automation is fully at scale (decades or more), you need good people to get good results. Most executives miss this and think everything is about product and process, but that’s not true. People design those products. People market those products. Those processes are carried out by people.

People do matter. That’s important to understand. Any issues with “employee engagement,” fluffy bullshit though it is to many, begin with that: executives who don’t get that people matter.

Once you realize that people matter, you need a way to keep the good ones.

This gets tricky.

Unless you’re a bank, you can’t make everyone a VP and mint their salary. It’s not possible. It barely even works for banks, honestly.

So over time we got guys like Daniel Pink coming along saying “Oh, people don’t care about money! Intrinsic rewards!”

Complete bullshit. A ping pong table doesn’t pay for my fucking car. I want money. We all do it. We’re just not supposed to discuss it, then show outrage when everyone else is chasing the cheddar too.

But only about 10–20% of a given company is gonna really get “minted” money (varies by profession, obviously).

So salary isn’t the primary path. And, in fact, the sheer math on salary — most companies give 1–3% raises, but job-hopping gets you 10–15% more often — means everyone job-hops, so loyalty declines.

What else might be a way to keep your best employees?

15–70–15

Some leadership consultant writes in HBR about how — this is entirely TOO logical — every employee in a given company is on a learning curve in their current role. You got three buckets, let’s say:

  • New to the role and learning it
  • Established in the role and killing it
  • Way too established in the role and needs some new challenges

Here’s the “nut Graf:”

Because every organization is a collection of people on different learning curves. You build an A team by optimizing these individual curves with a mix of people: 15% of them at the low end of the curve, just starting to learn new skills; 70% in the sweet spot of engagement; and 15% at the high end of mastery. As you manage employees all along the learning curve, requiring them to jump to a new curve when they reach the top, you will have a company full of people who are engaged.

Makes good sense.

The most logical thing about this idea

The two “15” numbers are comparatively low. An executive/manager would never want a high number of people learning new skills, because that says to the manager “OH GOD THESE TASKS WON’T BE COMPLETED.” But 15 out of every 100 employees trying to learn a role seems manageable. Meanwhile 70 out of 100 know what they’re doing and are killing it day-to-day. Good, right?

The problem of “learning curves”

(1) is that it’s a fluffy term. Can’t tie “learning curve” to “Q3 revenue,” you know? Right away, the people with the most authority care less.

(2) is that it feels like a HR thing. “HR things” are where good ideas go to die.

(3) is that to many managers, quicker to yell than praise, the idea of a “learning curve” means “Balls are being dropped.” That terrifies them.

So going to an executive and talking about “learning curves” isn’t going to work.

What might work?

“Hey, we’ve got some data here from exit interviews. People are leaving for higher salaries, yes, and we can’t do much about that. But one major reason that keeps coming up is the work plateaued for them, they weren’t being challenged, and they wanted new growth opportunities. I think we need to seriously evaluate how we’re moving people off roles they’ve performed well in for a while.”

The problem here, of course, is that very few orgs are good at tying “talent” to “the bottom line.” Without that tie, no one with authority — who receive that authority in exchange for caring about money — will actually care.

So you need data on:

  • Turnover
  • Turnover by manager
  • Turnover by department
  • Cost of recruiting
  • Cost of any agencies you worked with
  • Time the position was left open
  • How that ties/correlates to other members of that team leaving
  • How much more money could have been made/saved if turnover went down X-percent

Then it starts to work a bit better.

The A-Player Myth

Most companies get this really wrong.

You hear sports examples all the time, i.e. super teams. Well, there’s a couple of issues with that:

  • Super teams can spend more money than you can.
  • Super teams don’t stay together long because the individuals get more money elsewhere.

I’ve also heard this from recruiters: “I need to find more Michael Jordans.”

OK, problems with that one:

  • In human history, there’s been one Michael Jordan. Good luck.
  • Jordan didn’t win all those titles by himself. If you’re getting a Jordan, better get a Pippen, a Kerr, a Rodman, a Hodges, etc. You need all the parts.
  • Not everyone is an A-Player, otherwise the term is meaningless.
  • You need what you actually need, not just “the absolute superstar.”

We think about talent in weird ways. We think about getting it wrong, building it even worse, and off-boarding it in a miserably transactional way.

Let’s do better.

Let’s try 15–70–15 for the development piece.

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Blogging, largely about work and how to improve it. How I make (some) money: http://thecontextofthings.com/hire-freelance-writer-ted-bauer/

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