Brad Smart: Welcome to Dave Sibley of White Lodging. White Lodging is one of the fastest-growing, fully integrated, independent hotel, ownership, development, and management companies in the country. As a trusted partner, White Lodging consistently delivers superior hotel experiences and exceptional returns on investment among premium brand hotels across the country, making it one of the industry’s most desired hospitality leaders.
Dave is responsible for the management of 170 hotels with 19 brands, including hiring all employees, from entry- to upper-level managers. White Lodging has been Topgrading for several years. Dave is on the call now to share his experiences of what he did over what period of time, what the experiences have been, insights he might have, any suggestions to would-be Topgraders, and, of course what the results have been as well. So thank you, Dave. If you would just say a little bit more about the company and then transition to your Topgrading experiences.
Dave Sibley: Thank you Brad, I’m glad to be here today. Topgrading has been very positive. When we first sat down and evaluated our talent at the end of 2007, and asked how many A Players do we have at the GM level of our units, we realized when we were being honest with ourselves that only 11% of our General Managers were A Players.
So we set out start the process. We trained all our people on how to interview, but the biggest problem back then was, with only 11% A Players, how were we going to keep the B and C Players from interviewing and making sure that A talent was selected and also understood exactly what we were looking for?
We took a lot of time and energy — we went with two people on every interview. We made sure that we had an A Player paired with anybody we felt was not an A Player at that time. That was very difficult and time consuming, but we started to see results. When we sat down at the end of 2008, we had doubled from where we were. We were at 22% A Players instead of 11%, probably just about where the average company is with A talent.
We stuck with the process, and each year we’re able to increase the percentage of A Players by about 10 or 11% total. Today we’re excited, because we’re finally over the 50% mark. It’s much easier to attract talent when you have more A Players out there recruiting and selecting.
We’ve also realized along the way as we looked back at our succession planning, that initially we thought that we’d move up more than two levels, or A1s. Today most of our players are now A2s, A3s, or some of them are being re-deployed.
Brad Smart: Okay, so where are you today — over 50% [A Players], so it’s up from about 11% to about 50% level.
Dave Sibley: We’re about 60% today. But I would tell you that as we’ve gone through the process, what we thought was an A Player in 2007 is [different]. We probably have tougher standards today, because we’ve attracted more A Players and realized what they’re capable of. When we can compare them to what we had before and thought were A Players, the gap is quite large. So it’s not only that we’ve gone from 11% to 60%, but I actually believe that the number of A1s that are capable of moving up through the organization has dramatically increased compared to the past, when we were stretching in our workforce planning and succession planning — on who was going to be able to take the bigger jobs in our organization.
Brad Smart: For those on the call who don’t have any experience with Topgrading, an A1 is someone who’s promotable two levels; an A2, someone probably promotable one level; and A3, probably not promotable, but an A Player.
Dave Sibley: Many of those that we thought had a lot of steps in their career with us, we now realize are solid players right where they are without a lot of upward mobility compared to the additional talent that’s been added into the organization. And so we’re a much a stronger company from a pipeline standpoint, and much more willing to continue to grow and invest in our future, knowing that we have a strong pipeline of talent, where seven years ago we were worried that if we continued to grow significantly that we might fail because we didn’t have the pipeline needed to accomplish our objectives.
You know, one of the things I think that we found out is through Topgrading, we got better at interviewing and selecting talent. It almost helped us to have people self-select out of even trying to get into the organization. They knew there was going to be a strenuous interview, they had to prove their results and how they got the results, and then their ability to put together a great team or continue to grow people, and what I hear from a lot of people now is that, ‘Hey let’s not waste our own time trying to get in with White Lodging. I don’t want to go through the embarrassment of not being able to prove those things in an interview’ — which saves us a lot of time.
Seven years ago when we started out, we created this vision, and part of what we wanted to do was have our contract values be two times our nearest competitor. And when we first talked about that, and even with some of our owners that we manage for, they laughed at us and said, ‘That’s not the way the industry works — nobody has those type of contracts and so forth.’
Today, though, we have contracts that are almost four times the value! They have more value than our nearest competitor, and it is because of the quality of people that we have working with us. And because of that, our operating margins have increased dramatically, our consistency of results have increased, and now institutional owners are seeing the value that we can bring and that we can be different than somebody else — and that’s worth a premium.
So it’s not just that we do it because it’s a consistent platform, because it’s a big-time commitment to do Topgrading correctly; but it’s because of the results that it brings to the talent of the organization.
Brad Smart: How do A Players create that value?
Dave Sibley: One, they have ambition and the desire to succeed. They tend to be more resourceful and self-aware, and a problem doesn’t become a way to blame or an excuse. They approach it as, ‘How are we going to fix it,’ they get to the root cause of the issue, they put a fix-it plan together with a strong timeline and the ability to communicate back to the owners, and they inspire confidence and trust.
Brad Smart: But one of the consistent recommendations of CEOs that you can read again and again in Topgrading case studies is to not cut corners and stick with the disciplines — and that’s where it’s really important for not just Human Resources, but the CEO to be on board in doing that.
Dave Sibley: Well, I think everybody would like to have 100% [A Players], and our job is that we just know that by sticking to the process and every time, each year as we increase the number of A Players it makes it easier to attract more A Players to the company — and all we’re looking for is continuous improvement. Do I know if that’s going to be 80, 85, 90%? I’m not sure what the number is; all I know is that every year it continues to get better, and with that, our results get better. So we’re past the tipping point now that we’re over 50%, and it seems that it’s getting easier to attract [more A Players].
A Players are intellects. The first [important job aspect] everybody says is money. You know what, money has to be fair, and so forth. But once that’s achieved, that’s not what gets A Players up every day to go to work. They get up to produce great results; but they’re intellectually curious, they want to continue to learn, and they want to know that the people they work around or for are going to challenge them and help them grow to be the fullest and best person that they can be.
Brad Smart: Excellent, thanks. We have some questions coming in. First, ‘How do you get managers to continue to stay with the basic disciplines as opposed to cutting corners?’
Dave Sibley: First, it starts with you as the leader; whether you’re talking about the CEO or a unit leader, the way you act is what people believe and will follow. So if I only did interviews with myself and nobody else when I’m interviewing for my team, then everybody else would be thinking they’d be able to cut corners. We also do not let anybody do a Tandem Interview until they’ve been certified in Topgrading, so we say right from the beginning as part of their onboarding with us, they have to go be Topgrading Certified.
So from the very day that they either get promoted or come from an outside organization and start with us, they’re being told how important Topgrading is, and that if they want to be involved in the decision-making process, just as the people on their team, they have the opportunity to get certified, and they better do it. And, you know, if we find anybody not following Topgrading, we nip it in the bud quickly.
In the beginning, we probably micro-managed the whole process to a point of ridiculousness – I mean silliness, but it sent the message out that we’re going to do this right, and that we were going to watch how everybody was doing it, and it just became part of our DNA.
Brad Smart: Someone just asked Dave, ‘How can you combat the non-As from pulling the rug out from under Topgrading?’
Dave Sibley: Well remember, it’s taken us 7 years to get from 11% to 60%, so obviously in the beginning you have some of that just because it’s very difficult to get an A Player teamed up for every single interview in the beginning. Even as hard as you try to do that, the other thing about human nature is most people that aren’t A Players, even if you tell them, don’t believe that they’re not A Players.
Your biggest part is having the wherewithal when you make a decision not to hire someone and someone tries to fight around it, is to just not back down – that’s what I mean by over-managing in the beginning. When we didn’t have enough A Players, we had some systems set up to require certain people that had to buy-off on the hire talk to the people they interviewed; you can tell when you’re talking to both people on the phone whether one’s agreeing and one’s not. If you have one that’s not, you make a judgment on whether you think they’re an A Player and so forth, and sometimes you would actually pick up the phone and do a short call with the person in question before making up your mind.
Like I said, it’s a lot of work in the beginning to get to the tipping point. It’s not going to be perfect. I can’t tell you that every single person that we’ve hired in the beginning was an A Player. But we’re increasing the number, and when you’ve doubled the percent from one year to the next, it’s worth it, and the results after seven years definitely proved it was worth the time, energy, and effort.
One of the things that we noticed in the beginning was we had people besides A1, A2, A3; we had A Player, A Potential, and non-A. And the first year or two, we were focusing on the non-As and moving them out of the organization or re-deploying them if we had them in the wrong job. But what we noticed after year two was that we still had all these people that were rated A Potential. What we started to say is, anybody that after two years you’re still running at A Potential really is never going to be an A Player.
Brad Smart: Yes, that’s right.
Dave Sibley: And that forced a huge change in how managers evaluated people, really made them uncomfortable, and started to make them realize that they didn’t have as many A Players or the opportunity to move them into the A category. So that again made us better as we moved forward forcing that conversation.
And over the past three years we’ve made it clear that if you want to be promoted you have to have people in your organization who can replace you.
Brad Smart: Dave, someone asks how you use your networks to recruit people?
Dave Sibley: Anytime we hire a new person and put them through the process, as part of their onboarding, we want to know the top two and three team people that they know, that they believe that we should go after to join White Lodging, and we put those referrals into a database. We also look at all the current openings that we have in the company and try to decide if we have anything open right now that would fit any of them; if so, we aggressively go after them.
And we don’t necessarily make the new A Player aggressively go after them — we’ll take the responsibility. We know that they’ll get a phone call from that person later asking how they like it since they’ve joined the company, what they think of the opportunities, and how they would fit in. Also, one of the biggest questions in the Topgrading Interviews we ask is, ‘What’s the team you inherited?’ We literally make our A Player list all direct reports that they have, rate them as an A, B, C Player, and then we ask them when they left the previous job through promotion or for other reasons, what was your team, and rate those people. And if the same people were on the team and they’re not good players, that tells us about the person. But you can tell in the interview: People light up about certain people, the best players, they just can’t help but put a smile on their face and tell you how great those people were and how much they made them better and how they helped develop them.
And then those people go into a database. We won’t go after those people right away, because there is an ethical issue with interviewing somebody and then taking one of their team members from them; but we have those prime candidates in the database for later use, or if for some reason they come to us later about a job, we already know that we have a reference there before we even start with somebody.
And then we make every manager in our company responsible for finding one outside person a year to replace them. And if we have an A3 that says, ‘Listen Dave, I don’t know, I’m happy in my job, I do a great job, get great results, but with my family situation and everything else, I’m not looking to get transferred, I’m not looking to get promoted, I’m just going to do a great job year in, year out for you;’ we explain to them, ‘That’s great. You’re part of a growth company, you’ve got one of our core values, growth. You still have to contribute, because we don’t know tomorrow if we’re going to have a management contract that’s right across the street and we need somebody similar to you, where at that point even though it’s a little bigger you might decide that because it’s across the street you’re willing to take that and get a little more money.’
In our company you are responsible, and responsible means that you have to go through a mini-Topgrading Interview; if that person’s not willing to spend the time to do a mini-Topgrading Interview with you, then we either eliminate them knowing that they’re never going to make it, or we know for sure that if they didn’t do the mini there’s a good chance they can’t get all the way through the process, they don’t count as going on your virtual bench.
Brad Smart: Dave, I want to thank you again for your keen insights and your candor in explaining what you’ve done over the past seven years. So thank you very much, Dave; and I hope everybody listening on the call found this useful.
Published May 13, 2014