Create Heroes in Every Role
“How to solve the shortage of respect.”
Even if you thoughtfully examine the match between the employee and the role, you’ve still got a problem. No matter what conclusion you come to, the employee will invariably want to move up. The employee will want to be promoted. Every signal sent by the company tells him that higher is better. A larger salary, a more impressive title, more generous stock options, a roomier office with a couch and a coffee table, all this and more awaits the lucky employee on the next rung on the ladder. No wonder he wants to move up.
These blazing neon lights are a damaging distraction. They not only tempt employees to jump from excellence on one rung to mediocrity on another, they also create a bottleneck — legions of employees all trying to scramble onto increasingly fewer rungs. Conflict and disappointment are inevitable. There has to be a way to redirect employees’ driving ambition and to channel it more productively.
There is. Create heroes in every role. Make every role, performed at excellence, a respected profession. Many employees will still choose to climb the conventional ladder, and for those with the talent to manage others or to lead, this will be the right choice. However, guided by meaty incentives, many other employees will decide to redirect their energies toward growth within their current role. Great managers envision a company where there are multiple routes toward respect and prestige, a company where the best secretaries carry a vice president title, where the best housekeepers earn twice as much as their supervisors, and where anyone performing at excellence is recognized publicly.
If this sounds fanciful, here are a few techniques that great managers are already using to build such a company.
LEVELS OF ACHIEVEMENT
How long does it take to become excellent in a chosen field? In a study called the Development of Talent Project, Dr. Benjamin Bloom of Northwestern University scrutinized the careers of world-class sculptors, pianists, chess masters, tennis players, swimmers, mathematicians, and neurologists. He discovered that across these diverse professions, it takes between ten and eighteen years before world-class competency is reached. If you show some interest, he becomes even more specific. He will tell you, for example, that it takes 17.14 years from your first piano lessons to your victory at the Van Cliburn, Tchaikovsky, or Chopin piano competitions. While figures like this can feel a little too precise, Dr. Bloom’s general point is nevertheless well-taken: The exact length of time will vary by person and profession, but whether you are a teacher, a nurse, a salesperson, an engineer, a pilot, a waiter, or a neurosurgeon, it still takes years to become the world’s best. As Hippocrates, the philosopher and founder of modern medicine, observed: “Life is short. The art is long.”
If a company wants some employees in every role to approach world-class performance, it must find ways to encourage them to stay focused on developing their expertise. Defining graded levels of achievement, for every role, is an extremely effective way of doing just that.
Lawyers figured this out a long time ago. The young lawyer, fresh out of law school, selects his field of expertise — corporate law, criminal law, tax law — is hired into that field by a law firm and joins as a junior associate. Over the next four or five years he will be promoted to associate and then to senior associate. As a senior associate he will still be practicing law in his chosen field. He will simply be more accomplished. Over the next five years he will, hopefully, be promoted to some kind of equity position within the firm, where he will start as a junior partner, move up to partner, and then be promoted to senior partner. As a senior partner in the firm he will garner a tremendous amount of respect and earn a very generous salary, yet he will still be practicing the same kind of law as he was back in his junior associate days. The work will be more complex, and he will have his pick of the most interesting and most lucrative work. The only difference is that, by now, he will be one of the world experts in his chosen field.
Law firms are rarely considered cutting-edge organizations, but with their use of graded levels of achievement, they are far ahead of most companies. Although all lawyers are free to choose more conventional career paths — moving into the management of other lawyers, perhaps, or becoming a legal generalist for a corporation — these levels of achievement provide lawyers with an alternative, but equally respected, path to growth. It is a path that offers them both the opportunity to become experts and a simple way to track their progress.
Lawyers aren’t the only ones to realize the power of these levels of achievement. In medicine the levels build from intern all the way to senior consultant over a period of, at minimum, fifteen years. In professional sports you can measure your expertise as you progress from rookie to second string to starter to all-star. In sales the entry grade might be the Million Dollar Roundtable, an important first step for the fledgling salesperson, but the pinnacle is the Presidents Club, where the criteria for membership are ten million dollars in sales and perfect client-service scores. And in music you track your progress not by whether you are promoted from the violin to the conductor, but rather by your journey from the most junior third-chair violinist to concertmaster or first-chair associate.
In fact, anywhere individual excellence is revered, you will find these graded levels of achievement. Conversely, if you cannot find them, it means that, either overtly or accidentally, the company does not value excellence in that role. And by this standard, companies don’t value excellence in most roles.
As we stated earlier, great managers rebel against this. They believe instead that every role performed at a level of excellence is valuable, that there is virtuosity in every role. So no matter how menial the role appears, they work hard to define meaningful criteria that can help a dedicated employee track his or her progress toward world-class performance.
When we started the One Hundred Club with Allied Breweries, few managers believed that any bartender would ever reach the Five Hundred Club level. But by 1990 Janice K., a bartender in a pub in the north of England, became the first member of the Three Thousand Club. She knew the names of three thousand regulars and their favorite beverage. From this angle Janice was the best bartender in the world.
It just goes to show: In most cases, no matter what it is, if you measure it and reward it, people will try to excel at it.
These are just a few examples of managers guiding employees with a series of levels that lead to world-class performance. Levels of achievement like these are invaluable for a manager. When confronted by that thorny question “Where do I go from here?” the manager is now able to offer a specific and respected alternative to the blind, breathless climb up.
BROADBANDING
These levels of achievement will certainly help redirect an employee’s focus toward becoming world-class. However, the manager’s efforts at career redirection will be forever hindered if all of the pay signals are telling the employee to look upward.
Although each of us is motivated by money in different ways, the fact of the matter is that few of us are repelled by money. All of us may not hunger for it, but only a tiny minority of us find money positively distasteful. Therefore the simple truth is that it will be much easier for managers to redirect employees toward alternative career paths if some of those paths involve a raise in pay.
The ideal pay plan would allow the company to compensate the person in direct proportion to the amount of expertise she showed in her current role — the more she excelled, the more she would earn. In practice this ideal plan is complicated by the fact that some roles are simply more valuable than others. On balance, a pilot is probably more valuable than a flight attendant. A principal is more valuable than a teacher. A restaurant manager is more valuable than a waiter. Any pay plan must take these value differentials into account.
But before we design our plan, there is one final twist to consider. Some roles performed excellently are more valuable than roles higher up the ladder performed averagely. An excellent flight attendant is probably more valuable than an average pilot. A brilliant teacher is more valuable than a novice principal. A superstar waiter is more valuable than a mediocre restaurant manager. The perfect pay plan must be sophisticated enough to reflect this overlap.
Simple and effective, it is called broadbanding. For each role, you define pay in broad bands, or ranges, with the top end of the lower-level role overlapping the bottom end of the role above.
For example, at Merrill Lynch the top end of the pay band for financial consultants is over $500,000 a year. In contrast, the bottom end of the branch manager pay band is $150,000 a year. This means that if you are a successful financial consultant and you want to move into a manager role, you might have to endure a 70 percent pay cut. The upside for the novice manager is that the top end of the manager pay band runs into the millions. So while you may have to stomach the 70 percent pay cut initially, if you prove yourself to be excellent at managing others, then in the end you will reap significant financial rewards.
The Walt Disney Company takes a similar approach. As a brilliant server in one of their fine-dining restaurants, you might earn over $60,000 a year. If you choose to climb onto the manager career path, your starting salary will be $25,000 a year. Again, once you start to excel as a manager and are promoted up and through the various supervisory levels, your total compensation package can take you far above $60,000. But, initially, your pay packet will be sliced in half.
Even traditional, hierarchical organizations are starting to experiment with broadbanding. Martin P., the chief of police for a state capital in the Midwest, describes the conventional career path from police officer to police sergeant — the front-line supervisor role — to police captain (he removed the lieutenant role a couple of years ago) to assistant chief to police chief. “Time was,” he says, “when the only way to earn more money was to move into management — to go from officer to sergeant. Now all my pay grades overlap. If you are a superb police officer, you don’t need to get promoted to sergeant to earn more. The fact is, my very best police officers earn more than their captain does.”
On the surface, broadbanding appears disorienting. Front-line employees earning two or three times what their managers earn? This is a world turned upside-down. On closer scrutiny, however, broadbanding makes sense.
First, with its broad bands of pay, it provides a way to value world-class performance in a particular role very differently from average performance in that role. As with levels of achievement, wherever individual excellence is revered, we see broadbanding. In professional sports, no matter what the position, the superstars at that position earn multiples greater than the average players in the same position. This also applies to actors, musicians, artists, singers, and writers. In all of these professions the broad range in pay encourages the person to refine his talents and so become world-class. Great managers advise us to apply the same logic to all roles.
Second, with its overlapping bands of pay, broadbanding slows the blind, breathless climb up. It forces the employee to open her eyes and ask, “Why am I angling for this next promotion? Why am I pushing so hard to climb onto the next rung?” Without broadbanding, the answer to these questions is clouded by her knowledge that the next rung brings more money. With broadbanding the employee can answer only by examining the content of the role and weighing the match between its responsibilities and her strengths. Her answers will be more honest and more accurate. She will make her career choices based at least as much upon fit as upon finances.
Some companies take broadbanding to its limits. At Stryker, a $2 billion medical device manufacturer, the pay band for salespeople ranges from $40,000 for a novice to $250,000 for the best of the best. If you decide to move into the manager ranks, you have to take a 60 percent pay cut — the starting salary for a new regional manager is just under $100,000 a year. What is intriguing is that the top end of the manager band — about $200,000 in total compensation — is lower than the top end for salespeople. The best regional manager in the company can never earn as much as the best salesperson. Why would Stryker choose to do this? All manner of reasons: They value their best salespeople very highly; they want to entice their best salespeople to stay close to the customer for as long as possible; they want each employee to think long and hard before climbing onto the manager ladder. Whatever their reasons, their pay plan has proven very successful. Powered by the best salespeople and the best managers in the business, Stryker has achieved 20 percent annual growth in sales and profit for the last twenty years.
Broadbanding is a vital weapon in the arsenal of great managers. It gives teeth to their commitment that every role, performed at excellence, will be valued. And if the Stryker example appears a little extreme, remember this: During Gallup’s interviews with great managers, we found a consistent willingness to hire employees who, the managers knew, might soon earn significantly more than they did.
CREATIVE ACTS OF REVOLT
Great managers have to survive in a hostile world. Most companies do not value excellence in every role. They do not provide alternative career paths for their employees. And they do not give their managers the leeway to design graded levels of achievement or broadbanded pay plans. If you find yourself living in this restricted world, what can you do?
Brian J. can tell you. His advice: Revolt, quietly and creatively. Brian manages artists in a large media company. His company has seen fit to construct an intricate hierarchy comprising over thirty distinct pay grades, each with clearly defined benefits and perks. One of the rules within this elaborate structure is that you cannot be promoted to a director-level position unless you manage other people. Another rule is that only directors are granted such perks as stock options and first-class seating when traveling.
“I was caught between a rock and a hard place,” Brian says. “I wanted to show some of my best graphic artists how valuable they were, but rules are rules. I couldn’t reward them with a director-level promotion without promoting them to a manager role. But I didn’t want to promote them to a manager role because that’s not their talent. So instead I asked each of them to become mentors for junior graphic artists — they wouldn’t manage these people, they would just be expected to pass on their expertise. I then went to Human Resources and said that, as far as I was concerned, a mentor was the equivalent of a manager and so I had a right to promote them to a director-level position. HR took some convincing, but I got my way in the end.”
Garth P. tells a similar story. Garth runs an applied technology division in an aeronautics company. In his production facilities he employs hundreds of technical specialists.
“The best engineer I had was a guy called Michael B. We’ve got a pretty rigid structure here, so whenever we wanted to reward Michael we had to promote him up the ladder. After ten years of promotions, he found himself doing less and less of the engineering he loved and more and more people management, which, to be frank, he struggled at. So together we decided to create a new position: master engineer. Michael would be a roving genius, getting involved in only the most complex projects. He would also be the main resource, and the last word, on all engineering problems any of the other teams faced. And he would be freed from any manager responsibilities at all. I decreed that this was a vice president-level job, got the okay from personnel, and then promoted him. I can’t think of when I’ve made an employee happier.”
Laura T., an executive in a Texas-based petrochemical company, faced a similar situation but solved it in a slightly different way:
“I have lots of people who want to grow and who deserve to be recognized, but since we aren’t growing right now, new positions aren’t opening up. So I take my top performers and assign them to special projects. These projects are ad hoc. They have a specific objective, with a specific timeline. Once the objective is met, the project team disbands. Special projects like this work really well for me, because they give my talented employees a chance to grow, and at the same time they give me a chance to recognize each of them for excellent work — I got permission from HR to reward each successful team member with a gift certificate for a weekend in Dallas and seats to a Cowboys game. Recognition like that might not sound like a big deal to you, but for a traditional petrochemical company like ours, it’s a whole new way of thinking.”
Each of these managers, in his or her own way, is providing alternative routes toward growth and prestige. Each of them, maneuvering within a restricted world, is devising innovative ways to reward employees for excellent performance, without necessarily promoting these employees out of their current role. Each of them is trying to create heroes in every role.