Entrepreneurs: Are You Willing to Hire People Smarter than You?
By: Ryan Blair
Excerpted from NOTHING TO LOSE, EVERYTHING TO GAIN by Ryan Blair. Published by Portfolio/Penguin. Copyright (c) Ryan Blair, 2010, 2011.
I’ve always believed that my most valuable asset is the quality of the people I’ve been able to attract and recruit for my companies. If you surround yourself with tremendous talent, you will find yourself challenged and stretched to levels you never imagined.
Creating Value, Hiring Value
It is my goal to be in awe of every person I hire. I want to see traits in her or him that are more dynamic or more positive than my own abilities in that area, because I know that simply by working with that person, I will be able to grow and the company will prosper, thanks to this continuous reach for improvement.
I’ve seen entrepreneurs stunt their business growth because they were afraid to hire people smarter than they were. Bill Gates once said in an interview that the secret to his success was that he hired people smarter than he was, and he’s pretty smart.
Paying Top Earners Accordingly
Good people don’t take a job just for salary. They take a job for camaraderie, learning opportunity, or because of their career direction. As the CEO, your job is to clearly articulate those elements you offer your employees that are not money oriented, so that you can attract the best of the best talent without necessarily having to pay the highest wages.
In almost every great company I have studied, the elements that recruited the candidates were what led to that company’s greatness. And in every failed company I’ve studied, it was a lack of attention to those elements that led to its failure.
At ViSalus, we spent so much time building the sales culture that now we find ourselves shifting gears to work on building the internal employee culture, so we can grow our company into a great one. I didn’t pay much attention early on to the employee culture because I was focused on building the sales culture in the field.
The sales culture is responsible for the current growth, and the salespeople should be greeted as heroes because they’re the ones generating the revenue that pays everyone else’s salary, but the one thing that could stop the rate of growth at this point is not building the employee culture to complement the sales culture. I’ve seen some businesses in my industry fail because employees and management actually grow to hate the very people who are generating the revenue.
Early on in my career, I couldn’t fathom hiring people who were more expensive than I was, but one time a venture capitalist, realizing I was weak in the finance area, required that I hire a world-class CFO at a rate significantly higher than I was making. It was humbling, but I knew this individual was the best person for the job, and I looked at it as an investment in the growth of our company. I never regretted that decision.
One of our board members, Bob Dilworth, told me that when he was CEO of Zenith, his top salespeople made significantly more than he did. I was shocked. “They make twice as much as you,” he told me. “That’s when you know you got it right.”
Several of our distributors at ViSalus make more than a million dollars a year, and there is no employee, including myself, who makes anywhere near that. As CEO, you have to remember that all of these talented, well-compensated people are building your equity and your profits, and that contributes to your compensation.
Building a Unified Company Culture
If you’re worried about how much you make a year as a business owner compared to what your employees are making, you’re being employee minded. You need to be entrepreneurially minded and create a company culture that is also entrepreneurially minded.
To maintain that kind of chemistry, you have to be very selective about whom you bring aboard. A person who brings a condescending air, any kind of laziness, or a hostile attitude to the group can completely destroy the positive atmosphere you’ve worked so hard to create.
When I worked for my stepfather, I watched his business struggle because he continuously brought on the cheapest help he could hire, whether the people fit with his established team or not. He never took the time to screen for the right attitude, work ethic, or personality that would accentuate and add to the talent he already had in his company.
As a result, the company never grew beyond my stepfather’s talents, simply because he never brought on anyone more talented than he was.
Ryan Blair is the author of Nothing to Lose, Everything to Gain: How I Went from Gang Member to Multimillionaire Entrepreneur (Portfolio, 2012.) A self-made millionaire and serial entrepreneur, he established his first company, 24/7 Tech, when he was twenty-one years old and has since created and actively invested in multiple start-ups. As the CEO of ViSalus Sciences, Blair turned the company around during the 2009 recession and, in just over a year, took it from $600,000to $10 million a month. Blair is a regular contributor to Forbes and frequently appears as a business expert on national television. Visit Ryan at ryanblair.com and NothingtoLose.com, on Facebook and follow him on Twitter.