Bunde Walker
James Yost
Trent Hemann
FIRST WHO…THEN WHAT
 Initial thoughts:
 Set new direction
 Set new vision and strategy for company
 Then get people that are committed to new direction
 After research:
 First get the right people on the bus (wrong people off)
and then figure out the direction.
Three Simple Truths
 Focus on “who”, rather than “what,” can be adapted to a
changing company.
 The right people will eliminate the problem of how to
motivate and manage people largely
 Great vision without great people is irrelevant.
Wells Fargo
 Dick Cooley – CEO
 Created one of the most talented management teams in
the industry
 Focused on “injecting an endless stream of talent” into
the company
 “If I’m not smart enough to see the changes that are
coming, they will…” Dick Cooley
Wells Fargo
 When banking industry fell 59% behind general stock
market, Wells Fargo outperformed the market by over
3 times.
 Almost every executive went on to become a CEO of
another company.
Bank of America
 Followed the “weak generals, strong lieutenants”
model
 Strong lieutenants will stick around if weak generals
are picked.
 Weak generals for Bank of America would wait for
direction instead of seeking solution to problems.
Bank of America
 After losing $1 billion in the mid 1980s, they started to
recruit strong generals.
 Most executives were recruited from Wells Fargo.
 New strategy created an upward climb
“Genius” Model
 “Genius With A Thousand Helpers”
 One genius is the driving force in company’s success.
 Doesn’t need a management team.
 Effective unless genius isn’t there to make decision.
Jack Eckerd and Cork Walgreen
Jack Eckerd (Genius)
Cork Walgreen
 Picked the right stores to buy
 Picked the right people to
 Which stores should go in
hire
 Which people should go in
what seats.
 Best executive team in the
industry
 Selection of a great successor
what location.
 Had no executive team
Teledyne
(A genius with a thousand helpers)
 Henry Singleton-CEO
 Made every decision
 Created enterprise with 130 profit centers
 Exotic metals to insurance.
 “…Teledyne is not so much a system as it is the
reflection of one man’s singular discipline.” Forbes
 Stepped away from day-to-day management
 Entire enterprise began to crumble
High Incentives=Great Results?
 Analyzed use of stock, high salaries, bonus incentives,
and long-term compensation
 No systematic pattern linking executive compensation
to the process of going from good to great.
 GTG executives received LESS cash
 Not HOW you compensate, it is WHO you
compensate
Eric E. Schmidt
 Chairman/CEO of Google
 Former CEO of Novell
 Former CTO of Sun
Microsystems
 In 2009, Compensation cut
back 52% in order to lift
profits during the recession
 Salary of $1 for five
consecutive years
http://www.huffingtonpost.com/2010/03/30/ericschmidt-google-ceo-g_n_518198.html
Nucor
 Can not teach work ethic
 Opened up plants near real farming communities
 Created environment where hard-working people
would thrive
 Greater weight on character attributes
Rigorous, Not Ruthless
 Tough places to work
 Ruthless
 Hacking and cutting in difficult times
 Rigorous
 Consistently applying standards at all levels
 Deal with issues up front
Rigorous Cultures
 Wells Fargo acquired Crocker Bank
 1,600 Crocker managers gone the first day
 Wells Fargo replaced their own managers in the case
where a Crocker manager was more qualified
 Need to be “Rigorous” not “Ruthless”
How to be Rigorous
 Packard’s Law
 Growth rate in revenues faster than growth rate in
people; cannot build a great company
 Get and keep enough of the right people
 From top to bottom
 Do not compromise or settle
Circuit City
Silo
 Understood
 Did not follow
Packard’s Law
Packard’s Law
 Focused his time on
 Spent the bulk of
the right stores to
his time hiring the
buy
right people
 Took off beating the  Could not perform
basics
general stock
market 18.5:1
 Was bought out by a
foreign company
Get the right people
 Get people who don’t need to be managed
 When making business changes don’t fire, retain the
best
 Many times character traits are more important than
technical knowledge
Act when a decision is needed
 Waiting is not a good strategy
 Take extra time to make sure you hire the right people
 Focus on getting the best people in the right spot
 Move people around
 Square pegs in square holes
When to make a change
 Would you hire again?
 If an employee said they were leaving, would you be
disappointed or excited?
 Put your best people on opportunities
 Build opportunities, don’t manage problems
Hire people you want to work with
 Try to keep the right people
 Don’t fire people when making change, the best people
will embrace change
 Hire people who love what they are doing and want to
build something great
 Company ambition, not personal ambition
Hire Confident People
 Don’t hire people who follow blindly
 Hire people with confidence to disagree when it is
needed
 Argue and debate until the best answer is made
 Stand behind the decisions the company makes
Have fun
 It is important to first worry about who, then what
 When hiring, be rigorous, not ruthless
 Enron
 If in doubt, postpone hiring
 Google ads in New York magazine
3 main points
 First get the right people on the bus (wrong people off) and
then figure out the direction.
 The good to great leaders were rigorous, not ruthless,
in hiring decisions.
 Hire people you want to work with.