By Jas Singh
Every business has tried it. Some even thrive on it. The banking industry is almost built entirely around it. It makes so much sense – hire the person with the magic rolodex. The magic “black book”. Transferable clients. Golden relationships. That will move with the candidate and do whatever he or she says. Morning and Night. Instant Success. And we all live happy ever after….
Or so we would think. Unfortunately not. In working with over 500 companies across 50 different countries, we have discovered that in less than 5% of cases do relationships fully transfer across as expected.
Below are some of the reasons for why:
1) People who do genuinely have strong rolodexes are happy – and unlikely to move.
In the small percentage of cases where these rainmakers do exists, you can bet your bottom dollar these people are very well looked after. They are usually earning tremendous money and also locked in to long term deals. Why would they take the risk of moving when things are going so well?
2) If they do move, they will look for much higher compensation.
Again in the rare case that this people do exist, they will know their true value. For them to take the risk they will expect much bigger reward. Usually at least double the pay and a guarantee for a period of time (we all remember the 3 year guarantees that banks and executives were paid a few years back). And any business purely looking to hire someone on the basis of bringing across something instantly is unlikely to have the patience or risk appetite for such a payout.
3) People over-rate themselves and under-rate their employers.
We don’t buy Starbucks because of Howard Schultz. We buy Starbucks because of Starbucks. Because of the company. Off course, an exceptional leader (like Howard Schultz may I add) is critical but I doubt most of the Starbucks consumers worldwide would recognise him. (Would you?). Which is his biggest success. He has built a great company backed by great people not a great person backed by a great company. Clients buy because of the overall picture.
4) Contacts are not Relationships.
People confuse communication for commitment. Just because you deal with someone regularly – even socialise with them, does that mean you have a deep and meaningful relationship? Just like in our personal lives where we rarely have more than a few very close friends, the same is true in business. Don’t become excited just by who a candidate knows.
5) Relationships are not Revenue – until they buy.
But many business professionals do have deep relationships. They take the time to invest in forging trust and loyalty. Surely that must mean they can bring the business across? Unfortunately No. My best friend is a pilot in the RAF but I don’t think he will ever let me fly one of those planes. Top performing professionals realise that they must do what is best for the business. Even if you do have a deep relationship with a client, you may not have the best solution.
6) It’s better to know one CEO than a hundred VP’s
Another factor often overlooked by hiring managers is the fact that all relationships are not equal. We seem to think that hiring the guy who knows more people is a safer bet. However hiring managers should screen harder for the level of relationship. Simply having the trust of one CEO can win the entire business from the company and is far more effective.
7) Just because candidates guarantee business does not mean they can.
Candidates do funny things in interviews. Especially if they really want the job. And even more so if they have been out of the market for a while and desperate to get back in. Hiring managers need to be careful with over-confident candidates. Can they be so certain of their success if they haven’t asked what our company can offer? No one can predict the future, even highly confident people.
8) Hiring someone for their rolodex sends out the wrong message.
Would you like it if someone wanted to be your friend only so they could get to know your high profile CEO friend? Probably not. Hiring purely for someone’s “black book” send out the message that you feel they little else to offer. People are complex and we all have many things we believe we can offer. Leadership, business development, innovation, problem solving. I have yet to meet anyone whose sole aim in life was to be a human database. People who feel they are only being employed for their contacts are likely to feel undervalued and unlikely to hang around for long. It also send the message that you are not investing in employees for the long term.
9) Decision makers change. Regularly.
One of the biggest factors in transferring the rolodex across is that it quickly becomes outdated. Yesterday’s CFO has moved. There’s a new decision maker – and guess what he wants to review the entire purchasing process. The truth is the “black book” isn’t really a book – more like a screen; that is continuously changing.
10) If someone moves purely for their rolodex, they will probably move again.
If someone does move for the financial incentive of simply transferring relationships, they will almost definitely be targeted again. There is always someone else prepared to pay more (or at least promise to pay more!). Overwhelming research has shows that people never stay in their jobs because of money. Its things like career development, opportunity to learn and gaining responsibility that matter.
You only build a genuine strong rolodex by continuously providing value. In today’s ever connected world people who simply “know people” are not as important as they once were. The few business people that genuinely have a high number of meaningful relationships have one thing in common. They have helped clients continuously solve problems for years and have built trust. They can only transfer relationships across if they know for certain the new business can provide significant value to those they know.
And guess what. If your company can provide tremendous value to their clients, they will find you themselves.
Be a great leader. Increase Your Hiring Power.