In his Book Good to Great, Jim Collins outlines four practices observed in organizations that had moved from average performance to market leaders – including disciplined people, disciplined thought, disciplined action and adherence to the principles outlined in his earlier book, Built to Last.  To achieve the practice of disciplined people, he proposes some very interesting twists on building great staffs. 

Collins describes how organizations that become great have five levels of leaders as part of their team.  He found that to move to the next level of leadership, one must master the prior level.  It is not required that every employee have every leadership capacity, but having some individuals with competence at each level is necessary.   

Level One leadership is described as personal and professional competence to get the job done. At a minimum, every person in the organization must be a Level One leader. Level Two leaders are not only competent Level One leaders, they also are competent at working in teams. Level Three leaders are competent at managing the process of teamwork.  Level Four leaders are able to articulate vision and inspire others to maintain their focus to achieve goals.   

Then Collins found what he calls the Level Five leaders.  He says these leaders have to be in the “most powerful seats” of the organization.  He found that Level Five leaders are not necessarily articulate. In fact, he found that some of the leaders with the most style and ability to articulate and persuade others are actually competent Level Four leaders. However, he also found that many Level Four leaders – while good communicators – lack the substance of character needed to maintain their team’s motivation to move toward greatness. Of course, being a competent Level Four leader is mandatory to become a Level Five leader.  At Level Four, one must be able to create and articulate vision, but much more substance is needed to be a Level Five leader. He describes Level Five leaders as fiercely dedicated to organizational success, not just their own success. Many are described as humble, hard working, focused and not dependent on the next “great idea.”  Collins says Level Five leaders truly understand that the most important ingredient for organizational success is people.  These leaders do all they can to build an environment that helps their people thrive. With such dedication to people, the organization also thrives.  

In addition to the levels of leadership, he observed another people tactic in great organizations.  He found they hired the right person, not just the right skill.  Not that many years ago human resource practice was to advertise the credentials and experience needed to fill a position.  Then candidates were interviewed and, in theory, the candidate with the best training and experience was offered the job.  Collins found that if that is your current practice, you may not be hiring the right person for your organization to become great. 

He suggests that we should first think “first who, then what.”  In other words, we need to first find the right person, with the right values, to become part of our team – then we focus on their credentials and experience. The traditional hiring method could be described as “first what, then who.”  He found that in good to great companies, much more emphasis was placed on finding candidates with the right attitude and values, rather than just the right skills.  This may sound as if skills do not matter, but as described in Level One leaders, competence is required. Collins does not negate the need for credentials or experience.  Yet he does suggest that if we first focus on the personal traits we need, we will find better employees that will help us succeed – much more than if all we do is hire the person with the right credentials.  He says that if you have the right “who,” you can often train that person with the right skills.  However, it is almost impossible to take someone with the right skills and change their values.  The bottom line is that finding someone with your organizational values is much more important for success than just finding the most skilled person.   

Substance over style is a recurring theme in Collins’ reflections on disciplined people.  Level Five leaders need some style.  In reality, however, they can have less style and more substance and become a better leader than a charismatic communicator with little substance.  Stated in another way, skill is more like style than substance – while values and attitude are more like the true substance needed for Level Five leadership.   

Collins is a fan of and participates in our sector. That is one reason he wrote a second book, Good to Great and the Social Sectors, to reflect his admiration for the many ways we follow these principles better than our for-profit neighbors. He actually calls upon us to no longer accept the notion that our sector should become “more business-like.”  He thinks the for-profit world has much to learn from us – especially around the concept of disciplined people.  Our sector is values-based, so by necessity we already hire more “who than what.” We also have more Level Five leaders who are dedicated to mission rather than to self.  

Keeping Collins’ principles in mind, what strategies can we use to hire and maintain the right staff and attract the right board? 

• Be clear on your organization’s core ideology, core purpose and core vales – in other words, the essence of who you are.  Such clarity will help attract the right people and guide them to maintain the most important element of success – organizational focus on what matters most.
• Before any member of the board is recruited, be clear that the candidate is someone whose values align with those of your organization.  Having someone on your board who does not share your values could be a recipe for disaster.  The board remains the leading indicator of nonprofit resilience.  The right board hires the right CEO, who works with the board to recruit and retain the right staff – then comes organizational greatness.
• Work to recruit as many Level Five leaders as possible for your board.  Seek individuals who will be more dedicated to organizational success than self-interest.  Such board members will do the best job at identifying and recruiting the right Level Five leader as their CEO.
• Hire the right CEO.  The board clearly owns this responsibility and members should do what they are legally bound to do – make a decision based on their own best judgment, after reasonable inquiry, for the benefit of the organization. Some steps could include:
  • Identify candidates with the right values for the organization and community it serves, and with the understanding of their role to partner with the board.
  • Check formal and informal references.
  • Rate candidates first on values and attitude.
  • From the candidates with the right values and attitude, review credentials and skills and narrow the prospects to the top two-to-four people.
  • Seek comment and advice from the organization’s key constituents – such as funders, service recipients, stakeholders, partners and staff.
  • Having exhibited this “reasonable inquiry,” then use member’s best judgment and make the selection.
• Hire the right staff.  The CEO and other managers own this responsibility and could follow these steps:
  • Identify candidates with the right values and attitude.
  • Check references, both formal and informal.
  • Select candidates with the right values and attitude.
  • Review credentials and experience.
  • Select two-to-four of the candidates with the right values and attitude, as well as credentials and experience.
  • Have everyone on the staff (or department) interview the finalist to provide comment and advice.
  • If the position is a key leader, such as a department head or CFO, asking for board member comment may be useful.
  • Then the manager of the new employee makes the decision.
  • Finally, the new employee should be oriented into the values and culture of the organization.

At The Foraker Group, we strive to follow these practices.  We have made some hiring mistakes – but for the most part, when we follow these steps, we maintain a staff strongly aligned with our mission and values.  People at Foraker know our goals and understand their role in achieving success. 

One of our volunteer consultants, Credit Union One CEO Leslie Ellis, uses these practices in her organization. In the new Credit Union One corporate headquarters, the third floor (location of the human resource department) is called the “Culture Floor.”  Their core values are posted on the walls.  The environment is designed to engage every employee in what matters most – the substance of the organization.  We all want competent people to successfully perform the mission of our organizations.  First we must understand, as Leslie Ellis does, that competent people have more than just the right college degree or work experience – they have the right values and attitude.