We’ve heard over and over again that when it comes to getting ahead in the world, it’s all about who you know. According to self-made billionaire Mort Mandel, that also holds true for getting your business ahead in the world. He argues that the one real secret of running a successful anything is hiring the right people. Mandel visits Zócalo to talk about what better leaders could do to help institutions of all kinds solve the problems facing our world. Below is an excerpt from his book, It’s All About Who You Hire, How They Lead … and Other Essential Advice from a Self-Made Leader.
If you asked me to sum up everything I know in the fewest words, I would do it in just four: “It’s all about who.”
All my adult life—from the businesses we started to the businesses we bought, from the charitable causes we’ve created to those we serve—I’ve been completely devoted to hiring and keeping extraordinary people. This isn’t just talk or wishful thinking. My belief in the power of exceptional leadership is the most important principle I follow.
If you studied the CEOs of the largest Fortune 500 companies, I’d bet that less than 10 percent of them would be on fire about this the way I am. Jack Welch and Bill Gates know this and are prime standard-setters. When Welch was CEO of General Electric, he said, “I don’t want GE to be known as the best product factory. I want it to be known as the best people factory.” Every world-class organization is indeed a people factory because everything depends on people. All the rest is commentary.
It’s why I also strongly believe in the ability of a single extraordinary person to change the world.
The forces that influence an institution the most are the human forces—the people who manage it, inspire it, lead it, and build it. And success starts at the top. If you look at the history of the world, it’s largely the history of exceptional people, for good or for bad—Abraham Lincoln and Winston Churchill, for good; Josef Stalin, for bad. Leadership is what makes an organization soar, or fly a flat line to mediocrity, or, sadly, plummet to the ground. The great institutions of the world—whether they are for-profit or nonprofit enterprises—are defined by the quality of their leadership and the people who follow those leaders.
When you have the right people in the right seats on the right bus, as Jim Collins puts it, something magical happens. Smart strategy, strong culture, and perfect execution tend to follow. When you have mediocre people leading your team, it negatively impacts strategy and culture, and perfect execution tends to be very unlikely.
Most people instinctively know this to be true. But many leaders do not make the commitment needed to build a team with only the best people. More often, organizations compromise. A company has open positions it needs to fill. They have three people to promote. They’re under pressure from colleagues or customers to fill each job because work needs to get done. So they make the compromised choice. They interview a handful of outside applicants and say yes quickly to fill a position, or they promote someone from within who they’re only mildly positive about. There is compromise everywhere. That’s why there are so many B and even C players in so many important positions.
Sometimes, employers are not willing to pay up for the best talent. They seek to pay less than what’s needed to acquire excellence. That is a poor trade when they could seek a highly qualified employee whose contribution to the organization can be worth many times the cost. Exceptional people are likely to produce growth and more benefit than people who are average and will work for less.
I don’t settle. I will spend weeks, months, even years recruiting, sifting through available people to find the extraordinary. The dream of every leader should be to have the right person in the right job at the right time. It’s a very challenging goal. Hiring and promoting are both highly subjective. Although we may never achieve perfection, that’s what we should want.
I have to rate a candidate as an enthusiastic yes to hire him or her. On occasion, I turn down a candidate recommended to me by my colleagues. I’m sure that my colleagues are sometimes frustrated by some of these decisions, but they trust me and ask, “What did I miss?” They know I’m focused like a laser on getting the absolute best person in the job. Every time I turn down a candidate who made it through a series of interviews, I’m also reminding everyone that hiring the best people in the world is what we’re all about.
There’s one mistake I made earlier in my business life when it comes to people: only hiring when there was a defined need. One day, I realized that if we could afford it, it’s just as important to hire exceptionally talented people even when you don’t have an opening. On occasion, when we found a gifted person, an A player beyond doubt, we’d hire her and “park” her in the organization.
At first, we would just give the person something to do. Always, after a few months, she was working 10-hour days and making a big contribution. Inevitably, we found an important role for her, or she found it on her own. I never regretted hiring an A player.
What do I look for? Five key things, in this order.
1. Intellectual firepower
4. Work ethic
Years ago, the famous management guru Peter Drucker sat down with me and gave me some of the best advice I have ever received. I asked him how we could make our company grow faster. He told me to put my best person on my biggest opportunity.
Skeptical, I asked Peter a tough question: “If my best person is a dentist, would I put him in charge of running a brass foundry?”
Peter didn’t hesitate even a moment to answer.
“Yes,” he insisted. “Let me tell you what that dentist will do if he’s your best person. He’ll walk into that building, tour the plant, and speak to the employees. He’ll immediately realize he doesn’t know anything about a brass foundry. But he’s going to get his people together and figure it out. He’ll try to find someone on that team who is highly qualified to run the plant. If he doesn’t come up with one, he’ll find the best foundry man in the country. The dentist will soon learn how to improve the leadership and the culture and reinforce the values. He’ll know the importance you attach to perfect execution and killing oneself for the customer.”
In my view, what makes institutions great is all the soft stuff, which I think is the hardest stuff in business.