Topgrading was not just useful but essential to our success. - Scott Clawson, CEO
GSI (2,500 EMPLOYEES)
Industry: Grain Storage
- 90% of those hired for the executive team have turned out to be A Players/A Potentials. The executive team Clawson inherited had 22% As (suggesting that the actual hiring/ promoting success was probably less than that).
- Outside Topgrading professionals used to assess C-suite executives and replacement candidates.
- “Work in progress, ” as Topgrading is rolled out throughout the company.
- Challenge balancing need for fast change (private equity owners) and not overwhelming people with change initiatives.
GSI is a leading manufacturer of agricultural systems for grain storage and handling as well as swine and poultry production systems. Annual sales are $700+ million, and there are 2, 500 employees primarily in North America, Asia, and Brazil.
CEO Scott Clawson was hired by Centerbridge Partners, a private equity firm, in 2007 to lead GSI shortly after they purchased the company. They had lofty goals to provide excellent returns in a short time frame.
Clawson estimates that of the original top team, only 2 of 9 qualified as A Players. Clawson was familiar with Topgrading and when Centerbridge Partners suggested that he use ghSMART for C-suite assessment and coaching, he was all for it. A great and quick way to assess organizational talent right from the start.
Topgrading has been a “work in progress.” Clawson has required managers to read Topgrading, and use the Topgrading Interview and reference check approach. However, most managers have not been trained yet, and so psychological appraisals have been used as an “insurance policy” when hiring or promoting people into the 30 positions below C suite.
Using the assessments of Topgrading professionals, success hiring has produced 90% A Players or A Potential. Where managers circumvented the Topgrading process, there were miss-hires. Two of the replacements were A Players Clawson had worked with previously at Danaher.
EBITA has improved from $71 million to $122 million. The company was recently sold to AGCO Corporation, and the private equity investors enjoyed an excellent return.
Best Advice to Would-Be Topgraders
1. Use Topgrading interviews and assessments early on at the start of the change process with current C-level managers. It is critical to understand and surface the issues of having B and C Players in key jobs that lead the company.
2. Don’t just fire underperformers. We found that many who were struggling were in the wrong job, and turned out to be A Players in the right job. Topgrading Interviews can help figure out when a square peg can fit in a square hole.
3. Carefully balance need to change rapidly (to satisfy investors) and need to get buy in for change. Top managers over-communicated with listening, teaching, and coaching in order to not move too fast for people. Put differently, you can drive change faster with lots and lots of communications than if communications are sparse.
4. Be very cautious in hiring managers from sophisticated companies like GE, expecting them to fit the less progressive culture and yet be a change agent such as in Lean Manufacturing and Topgrading. We made some mistakes in this area, an A Player elsewhere couldn’t be one here. Tandem interviews and reference checks uncover this.
5. Although the CEO must drive Topgrading, HR has to be fully on board, well trained, and able to persuade managers to fully embrace the methods.