Jim Hunter, President & CEO

AdvancedSteps To

Ensure YOU Don’t Make ANY People Mistakes In

Your Company

FUTURELAB

Agenda:Agenda:

why? ...we’re herewhy? ...we’re here

where do we start?where do we start?

...some wrap-up...some wrap-up

…we’re here

each time we try somethingto understand our people

it’s just the tip of the iceberg...

do we start?

step #1give yourself an overall

‘Talent Grade’

sample scorecard

talent hiring grade• Have a candidate sourcing /

pool?• Have accurate job requirements?• Use consistent & disciplined

hiring process?• Have automated hiring process?• Have a successful track record?

a poll question? (1-5)…

talent development grade

• See and track increases in individual productivity?

• Record promotions from within?• Culture of learning & development?• Have individual development plans?• Know who to train on what?

a poll question? (1-5)…

talent planning grade• Have a succession plan for each

job function?• Know which “high level” attributes

are found in each role?• Know who ALL your ‘high’ potential

individuals are?• Have a “Net” that is cast wide &

deep enough? a poll again (1-5)…

talent measurement grade?

• ID’d metrics which drive success?• Do you track the measurement of

those metrics?• Id behaviors & competencies which

drive success?• Evaluation/measurement of

competencies?one more poll (1-5)…

…and your score?

step #2what makes your

‘A’ players differentfrom everyone else?

step #3replace

low performers….yes, its very hard.

step #4using job descriptions that

don’t reallymatch the job

A-Source Profile - Vice President Sales

Candidate Name:

Ideal Employer/Job Response

What are the Candidates Employment Goals & Objectives?

Loves to manage people. Has a passion and entrepreneurial spirit. When he was at STAC, he started carrying a bag from scratch and built the whole operation (incl finance to 23 people w/in a year. Loves being part of a team in building companies. Currently working w/entrepreneur to define his business/opening doors (netgear, linksys, 3com). Money has to be there but wants to build. Carry the bag but work the strategic, analytical, marketing and getting feedback from clients...... He's out of there if he can't sell (currently). Build the co 1st, making money 2, managing people 3rd.

What's The Ideal Employer Culture and Characteristics The Candidate Is Looking For (Big or Small Firm, Private or Public, etc.)?

He's looking for a company where he can help build it from the ground up. A company would have the characteristics & culture to look outside the box and be open to new ideas regardless of who created them.

What's The Candidate's Ideal Role & Responsibilities?

Part of the team that builds the company, plain and simple.

What Does the Candidate Enjoy Doing Most Outside a Work Environment?

Swimming a mile plus 5x/wk. Teaching French in his spare time. Fluent in German but can also speak 5 other languages pretty well.

Weighting Table (A30)

Position Attributes Weighting - Vice President, SalesRequirements (Absolute Must-Haves) Candidate 1

Core Disciplines Weight Score out of 100

Leverage key executives (Rolodex) in industry/prospects. Proven record of calling on Executive and Middle Management.

10.00% 90.00 9.00

Demonstrated ability to Find, Qualify and Close Business in NEW markets with NEW products. 35.00% 100.00 35.00

Background in building and growing sales groups 5.00% 100.00 5.00

Strong understanding/experience of CRM, enterprise software mkt 35.00% 30.00 10.50

Stong ability to create and implement sales strategies 5.00% 100.00 5.00

Has surperb organizational and time management skills 2.00% 95.00 1.90

Strong communication/presentation skills 3.00% 90.00 2.70

Strong self-starter (Documented Personal Goals) 5.00% 90.00 4.50

Totals 100.00% 695.00 73.60

step #5use a topgradinginterview format

Under Developed Well Developed1. Finds it difficult to talk to “strangers”

2. Has difficulty dealing with steady diet of rejection3. Unpleasantness of prospecting overcomes drive and

self confidence4. Always seems to find something else to do

5. Manager must make prospecting a non-negotiable or it will not get done

1. Has little problem talking to “strangers”2. Does not take rejection personally; willing to go through

98 “no’s” to get 2 “yeses”3. Recognizes the formula for success includes

prospecting and cold calling4. Makes prospecting a priority and tracks prospecting

time and activity5. Approaches prospecting at times of high energy

Rating Scale1 2 3 4 5

Tell me about a job you have had where you successfully did more cold calling than you were comfortable with?How much did you do per week?What did you like about it?What did you not like about it?How did you make yourself do it when you didn’t feel like it?What did your tracking system look like?What was your success rate?

When prospecting, how many “no’s” are you willing to go through to get a “yes”?How do you handle that level of rejection and remain positive?How did you come up with that number?How would you determine that a particular method of prospecting is a waste of time?What does a “yes” mean when doing telephone cold calling?

Most would agree that cold calling and prospecting works best with a script. Give me an example of a script you have recently usedHas this script been successful? Why?How long or often have you used that script?How long would it take you to develop a script for this company’s product or service?Can you do it right now and role play?

Sales Prospecting - “Capable of prospecting for new business without constant supervision”

step #6implement specific on-

boarding & training plans for your people...

step #7keep score

Topgrading SalesMoving "B" & "C" Reps into "A" & "B" Reps

Current ProjectedABC Distribution of Reps # Reps % Total # Reps % Total

"A" Reps 15 15% 23 23%

"B" Reps 60 60% 62 62%"C" Reps 25 25% 15 15%

Total 100 100% 100 100%Avg Transactions per Period

"A" Reps 5 5 "B" Reps 3 3 "C" Reps 2 2

Number of Periods in a Month 1 1 Avg Transaction Value

"A" Reps $ 1,000,000 $ 1,000,000 "B" Reps $ 800,000 $ 800,000 "C" Reps $ 700,000 $ 700,000

Avg Transaction Net Profit Margin (%)"A" Reps 2.0% 2.0%"B" Reps 2.2% 2.2%"C" Reps 1.8% 1.8%

Avg Monthly Transaction Value per Rep"A" Reps $ 5,000,000 $ 5,000,000 "B" Reps $ 2,400,000 $ 2,400,000 "C" Reps $ 1,400,000 $ 1,400,000

Weighted Avg $ 2,540,000 $ 2,848,000 Avg Monthly Gross Profit per Rep

"A" Reps $ 100,000 $ 100,000 "B" Reps $ 52,800 $ 52,800 "C" Reps $ 25,200 $ 25,200

Total Monthly Gross Profit % Incr"A" Reps $ 1,500,000 $ 2,300,000 53%"B" Reps $ 3,168,000 $ 3,273,600 3%"C" Reps $ 630,000 $ 378,000 -40%

Total $ 5,298,000 $ 5,951,600 12%Weighted Avg per Rep $ 52,980 $ 59,516

Incremental Gross Profit (Monthly) $ 653,600 Incremental Gross Profit (Annual) $ 7,843,200 Daily Cost of Doing Nothing: $ (21,787)

Turnover CostReduce Time Spent Interviewing by Pinpointing Only "A" Potential Candidates,

and Reduce the Number of People "Voluntarily" Leaving the Company

Current ProjectedNumber of Employees 100 100Avg Annual Salary $ 100,000 $ 100,000 Current Avg Annual Turnover % 15% 10%Current Number of Employees Leaving per Year 15 10Opportunity Cost

# Months to Ramp-Up 3 3Avg Revenue per Month $ 2,540,000 $ 2,540,000

Avg Monthly Gross Profit $ 52,980 $ 52,980 Annual Lost Gross Profit per Employee $ 158,940 $ 158,940 Annual Lost Profit Contribution $ 2,384,100 $ 1,589,400

Recruiting CostsAds Postings $ 1,200 $ 1,200 Interviewing Time ($100/hr x 4 hrs x 3 candidates) $ 1,200 $ 1,200 HR Department Time $ 200 $ 200 Expenses (Travel, Drug Screen, Ref. Checks) $ 750 $ 750 Relocation $ 10,000 $ 10,000 Testing $ 5,000 $ 5,000 Orientation Time( $50/hr x 40 hrs) $ 2,000 $ 2,000

Recruiting Cost per EE $ 20,350 $ 20,350 Annual Recruiting Cost $ 305,250 $ 203,500

CompensationSalary & Benefits @ 30% Paid Prior to Ramp-Up $ 32,500 $ 32,500

Annual Lost Compensation $ 487,500 $ 325,000 Separation Costs

Severance (2 weeks salary) $ 3,846 $ 3,846 Outplacement Fees $ 3,000 $ 3,000 Management ($100/hr x 3 hrs) $ 300 $ 300 Administrative ($50/hr x 2 hrs) $ 100 $ 100

Separation Cost per EE $ 7,246 $ 7,246 Annual Separation Cost $ 108,692 $ 72,462

Total Turnover Cost (Monthly) $ 273,795 $ 182,530 Total Turnover Cost (Annual) $ 3,285,542 $ 2,190,362 Savings from Turnover Reduction (Monthly) $ 91,265 Savings from Turnover Reduction (Annual) $ 1,095,181 Daily Cost of Doing Nothing $ (3,000)

TrainingIncrease Productivity by Identifying Appropriate Candidates for a Particular Training Program (send only those who need it),

and Validate or Reduce External Consultant Costs and Training Budget as Indicated

Class Data InputsCost Per Student

Cost Per Class

Annual Class Cost

Length of class (in days) 3Number of classes per year 15Number of students per class 10% of students travelling from outside the local area (require airfare, per diem, etc.) 30%Number of trainers per class 2Estimated life of the training course (in years) 3

Student CostsAvg student compensation (salary & benefits) $ 80,000 $ 1,021 $ 10,213 $ 153,191 Travel & Lodging per Student $ 1,100 $ 11,000 $ 165,000

Total Student Costs $ 2,121 $ 21,213 $ 318,191 Instructor/Vendor Costs

Avg Inside instructor compensation $ 65,000 $ 166 $ 1,660 $ 24,894 Avg Outside Instructor Per Diem $ 1,500 $ 900 $ 9,000 $ 135,000

Total Instructor Costs $ 1,066 $ 10,660 $ 159,894

Travel & Materials Expense $ 200 $ 2,000 $ 30,000 Facility & Equipment Costs $ 524 $ 5,242 $ 78,625 Grand Total Training Delivery Cost $ 3,911 $ 39,114 $ 586,710

Incremental Value of Training% of work time students spend on tasks that use training related knowledge/skills 25%Importance of tasks using this knowledge/skill set (1=normal or typical; 2=critical; 0.1=minimal) 1Weighted hypothetical training-related task compensation $20,000 $200,000 $3,000,000Students' average current effectiveness at tasks related to knowledge/skills covered by this training 65%Level of effectiveness students are expected to reach resulting from training 85%Expected increase in effectiveness 31%

Value added to post-training task-related compensation $6,154 $61,538 $923,077Potential Training ROI 57% $2,242 $22,424 $336,367

bonuses…• don’t rely too much on ads and recruiters• careful calling references that candidates

supply• too much time on unnecessary phone

screens• avoid asking illegal questions• using performance reviews that work

www.peoplebest.comblog.peoplebest.com