Carl Gould is a business growth expert with 7 Stage Advisors. His methodologies are practiced in over 35 countries.
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When it comes to assigning value, a company is divided into two parts: tangible and intangible assets. As you might suspect, tangible assets are things the firm can buy or sell—property, machinery, inventory, computers or company vehicles. As a result, appraising tangible assets is usually straightforward. A business’s intangible assets are the human components. Assessing the value of team members is more complicated. How do you know if a hire is really the best person for a job? Would another person perform better? How do companies measure human potential?
Instead of trying to evaluate each person, use benchmarks for the position. This process forces business owners to assign standards and ideal attributes for each job, ignoring (for now) the assets or contributions of the people already occupying those positions. It also demands that the owners think through how each position works with other jobs and departments. Once the benchmarks are in place, it’s much easier to identify trouble spots and understand why some seemingly “good” employees don’t fit in.
Develop a personality for each position.
When creating a benchmark, it’s helpful to develop a personality or prototype for each position. Just as people have certain traits and quirks, each job also has a unique set of qualifiers. For example, the benchmark of desired characteristics for salespeople might be outgoing, optimistic, competitive and enthusiastic. For operations, the prototype description might include stable, scheduled, team-oriented and predictable.
Once a benchmark prototype is created, it becomes much easier to determine if an employee’s nature harmonizes with the needs of their job. In my experience, when an employee is a good match with their job’s benchmarks, they tend to be more effective, feel successful and show more loyalty. Matching people to benchmarks is a win-win.
It sounds simple, but it’s an admittedly soft science. For example, it’s easy to think that every company will have the same job personality for certain positions, but needs vary. For example, one client (let’s call him Client A) told me it’s the tax accountant’s job to eliminate risk. The financial reputation was crucial to Client A’s success, so he demanded solid, uneventful returns. This company wanted a conservative tax accountant who erred on the side of overpayment. If there were any questions about whether something would not be considered a deductible, they would not take it.
Another client (Client B) felt quite the opposite. That client wanted their tax accountant to be aggressive, inquisitive and dedicated to finding new ways to reduce taxes, even if that involved something as dramatic as restructuring the company. Client B needed a tax accountant who stayed on top of every change in tax law and found every loophole. Their people needed to relentlessly search for creative, even risky ways to reduce the corporate tax burden.
Looking at these two examples, it’s easy to see that Client A and Client B need two very different types of employees. Can you imagine how unhappy an aggressive hire would be working for Client A? And how frustrated Client B would be if they hired a conservative tax accountant?
Understand that benchmarks can change based on a company’s growth cycle.
In the startup phase, companies operate differently. They must be nimble, run lean and change quickly to meet market needs. On the other hand, established businesses tend to gravitate toward order, systems and processes. The value of personality traits or working styles will change as a company matures.
It’s wise to revisit benchmarked job descriptions as a firm grows. For instance, engineers who are good at developing new products have different traits than engineers who excel at testing or tweaking existing products. Process-driven staff are excellent for a large organization but can be ineffective in the launch phase. Creative workaholics are invaluable initially but can get in the way once systems are in place.
Benchmarking is the first step to increased productivity.
Benchmarking is not an exact science. However, it is a good way to start inventorying and leveraging your company’s intangible assets. By creating prototypes for each position, you’ll make it easier to identify and hire people who can achieve their full potential within your organization. If you find the right person to do the right job, they’re more likely to be happy and more productive, which means your business will run smoother and grow faster.
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