Table Of Content“Topgrading must be a continuous process of raising the bar in the identifica-
tion of top and bottom players to enhance overall organizational vitality.”
—Bill Conaty, former Senior Vice President of
Human Resources, General Electric
“During the last three years of the recession we have continued to grow rev-
enue, we’ve been one of Utah’s fastest growing companies, and we’ve won mul-
tiple awards as a ‘best place to work.’ Having 94+% A Players at Access is one of
the key reasons for this success. Topgrading has been the foundation to help us
attract, hire, and retain these A Players.”
— Larry Maxfield, CEO, Access Development
“Of course Argo is more successful as a company because Topgrading has re-
sulted in a higher percentage of A Players. But also a more interesting thing
happened, and that is, once we had a number of very good people, we didn’t
need as many people.” — Mark Watson, CEO, Argo Group
“In my IT department efficiency has increased tenfold and productivity is
much improved. The only way we could have achieved those results is with
Topgrading.” — Bruce Leidal, CIO, Carestream Health IT Department
“With over $70 billion in assets . . . Topgrading is key to our strategies, and . . .
the strategies that have generated the majority of our profits would not have
been possible without Topgrading.” — Ken Griffin, CEO, Citadel
“After implementing Topgrading for all new hires and promotions, I am
thrilled. Our organization has embraced the philosophy and process and we
are seeing the results . . . the right people in the right positions.”
— Tim Tevens, President and CEO, Columbus McKinnon
“Topgrading has given our team the quality people to keep us winning despite
today’s economic challenges. Our peers in the region have seen layoffs and
eroding sales with this tough economy. But our A Players have kept us focused
and on plan over the past two years. Our team of top performers is poised and
positive about the future. We’re playing offense and we’re winning.”
— Vic Oenning, Senior Vice President,
Sales and Operations, Corwin Beverages
“Topgrading has been an invaluable tool for DenTek in recruiting and retain-
ing high- level performers. Over the past six years we have blossomed into a
world-class consumer goods company with explosive growth and great oppor-
tunities, due largely to the hard work of A Players recruited through the Top-
grading process.” — David Fox, President, DenTek Oral Care
9781591845263_Topgrading_FM_i-xii.indd 1 6/6/12 11:23 AM
This book is appropriately dedicated to the hundreds of clients
and thousands of managers who have, indirectly, written this book.
Here’s a toast to you, terrific clients, for modifying Topgrading methods
in innovative ways, sharing problems and asking for solutions, and offering
your insights to others by providing your case studies.
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9781591845263_Topgrading_FM_i-xii.indd 10 6/6/12 11:23 AM
conTenT s
Introduction
Topgrading WiLL make your company more successfuL 1
Chapter 1
Topgrading basics 9
Chapter 2
aLL abouT a pLayers 24
Chapter 3
12 Topgrading sTeps To hiring 90% high performers 53
hiring step #1: measure your baseline success hiring
and promoting people and your costs of mis-hires 62
hiring step #2: create a clear Job scorecard (not a vague Job description) 77
hiring step #3: recruit from your networks 86
hiring step #4: screen candidates with the Topgrading career
history form and Topgrading snapshot 98
hiring step #5: conduct Telephone screening interviews 107
hiring step #6: conduct competency interviews 110
hiring step #7: conduct Tandem Topgrading interviews 117
hiring step #8: interviewers give each other feedback 144
hiring step #9: Write a (draft) executive summary 147
hiring step #10: conduct candidate-arranged reference calls 168
hiring step #11: coach your newly hired a player 171
hiring step #12: annually measure your Topgrading success 175
Chapter 4
advanced inTervieWing Techniques 179
Chapter 5
Topgrading innovaTions: case sTudies 199
Chapter 6
The arT of Topgrading 247
9781591845263_Topgrading_FM_i-xii.indd 11 6/6/12 11:23 AM
xii Contents
epiLogue 274
appendix a. sampLe Job scorecard 277
appendix b. Topgrading snapshoTs 287
appendix c. Topgrading vision 289
appendix d. Topgrading cosT of mis-hires form 291
appendix e. sTarTer Topgrading inTervieW guide 293
appendix f. shorT case sTudies 295
appendix g. sampLe execuTive summary and
individuaL deveLopmenT pLan 323
appendix h. Topgrading resources 331
index 335
9781591845263_Topgrading_FM_i-xii.indd 12 6/6/12 11:23 AM
Introduction
Topgrading Will Make Your
CoMpanY More SuCCeSSful
After decades of studying thousands of successful and failed careers, and
hundreds of successful and failed companies, we at Smart & Associates
have found that the one factor accounting most for individual and organi-
zational failure is not flawed strategy, insufficient capital, lack of govern-
ment protection or bailouts, bad luck, corruption, or technology. More
important than all of these factors combined is a failure to embed sufficient
talent in the organization.
The single most important driver of organizational performance and
individual managerial success is human capital, or talent. The ability to ac-
tually do what every company and every manager wants to do—hire and
promote the best people available at every salary level—is what distin-
guishes premier companies, large and small, from mediocre firms. And the
ability to hire and promote the best talent available at every salary level
accounts for why managers enjoy highly successful versus more ordinary
careers.
Consider two examples: In the face of increasing international and do-
mestic competition, two senior managers in similar companies vie to out-
perform the other. Both strive to improve their teams’ performance because
both have studied the latest management trends and have attempted some
version of quality and process improvement—Six Sigma, lean manufactur-
ing, or Toyota manufacturing methods. Using the latest technology, they
have discovered and rediscovered their customer base, and both use social
media to make their organizational culture more positive and attractive for
recruitment. The companies are equivalent in financial and geographic re-
sources. However, the companies differ in one respect. One manager has a
team of 25% high performers, 50% “adequate” but mediocre performers,
and 25% low performers. The other manager has a team of almost 90% high
performers. Which manager would you bet on to win? It doesn’t make much
difference if the organizations are Global 100 companies, grocery stores, or
9781591845263_Topgrading_TX_1-356.indd 1 6/6/12 11:24 AM
2 Topgrading
high-tech start-ups, because the company with better talent is bound
to win.
The trouble is, throughout the world most companies do not have supe-
rior talent because they are poor at picking talent. They simply can’t figure
out how to solve three huge problems in hiring:
1. rampant dishonesty by weak candidates who easily get away with
fudging their résumés and faking their interviews,
2. insufficient information, because most companies use superficial hir-
ing methods that enable candidates to control and hide what they
share about themselves,
3. lack of verifiability, as most reference checks are practically useless.
Since most reference checks are fact checks with Human Resouces,
not done at all, or conducted with the candidates’ buddies as refer-
ences, even the weakest candidates can get away with problem #1,
dishonesty.
As you look back at your career, what percent of your frustrations, mis-
takes, headaches, failures, and disappointments have been caused by your
having too many mediocre and low performers? As you reflect on your
painful and costly people mistakes, do you instinctively sense the whole
hiring system is broken because weak candidates you hired got away with
being dishonest, sharing insufficient information, and not permitting you
to verify what they told you in reference calls with their former bosses?
While we’re wallowing in the misery of talent headaches, here is some
more evidence that you are not alone if you are frustrated with talent
challenges:
• I’ve conducted 65,000 oral case studies with managers, covering all as-
pects of managers’ job histories. In 95% of those case studies, the man-
agers said the “least enjoyable” aspects of the job were problems caused
by their mis-hires.
• I met with just the #1 Human Resources executives of Global 100 com-
panies, and they completed a survey revealing 80% of the managers
they hire turn out to be mis-hires because their hiring methods are
flawed. And they said that 75% of the people promoted turn out to be
underperformers, mistakes they made because, again, their methods
for picking talent are flawed. The non-Topgraders in this elite group
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Topgrading Will Make Your CoMpanY More SuCCeSSful 3
hired people—or rather mis-hired 80%—by screening from résumés
(that don’t screen out C Players whose résumés are deceptive), conduct-
ing a series of 45-minute competency or behavioral interviews (which
produce insufficient information and are simple for C Players to fake),
and only doing reference calls with people the candidate chooses (and
C Players list their buddies, not former bosses, as references).
• Human Resources is disappointing CEOs for failing to deliver talent.
McKinsey Quarterly (January 2008) published an article (“Making Tal-
ent a Strategic Priority”) in The War for Talent series, showing how the
image of HR is mediocre and declining. Line managers say the so-
called best practices of HR just don’t work, and they complain that HR
is not accountable for high quality of hires.
• Two hundred CEOs reported to us that they felt they got their money’s
worth from executive search firms only 21% of the time. (There are A
Player executive search executives and you’ll learn how to find them.)
• The American Productivity and Quality Center (APQC) conducted a
study of quality of hires* in which nineteen companies participated as
case studies, sponsors, or both. Only one company, a Topgrading com-
pany, stood out for both measuring success accurately and for achiev-
ing more than 75% success hiring and promoting not just “okay”
performers but high performers. Several global companies that had
initially offered to participate dropped out of the study when it became
clear that their hiring and promoting methods produce mediocre re-
sults. The full report is available at www.APQC.org.
As you can see, talent headaches are universal; you’re not alone!
Topgrading SolveS The Three BiggeST hiring proBleMS
So profoundlY, ManagerS geT Superior TalenT and
Their organizaTionS perforM BeTTer
Now for the good news. In this book you will read of the treatment and cure
for your talent headaches, and it’s not a pill. It’s Topgrading methods that
are revolutionary in infusing hiring with honesty, thoroughness, and veri-
fiability of candidate information, producing 75% and even 90%+ success.
* APQC, “Recruiting, Selecting, and Retaining Talent,” Summary of Key Findings
(2007).
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4 Topgrading
That is such a dramatic improvement in talent at every level of every orga-
nization that dozens of CEOs quoted in this book state that Topgrading has
definitely made their company more successful. Hence the subtitle of this
edition of Topgrading.
how does Topgrading Solve the Three Biggest hiring problems?
High performers basically are truthful in their résumé and interviews, but
low performers too often hype positives and hide negatives. Topgrading
hiring has a “truth serum,” replacing commonplace falsehoods in résumés
and interviews with refreshing honesty. That “truth serum” is candidates
understanding that eventually they will have to arrange reference calls with
former bosses.
Topgrading hiring has a “truth serum,” replacing commonplace
falsehoods in résumés and interviews with refreshing honesty.
The Topgrading Interview cures the “lack of information” headache
because it covers the total career—every success, failure, key decision, and
key relationship, for every job. And Topgrading cures the “lack of verifi-
ability” headache by requiring candidates to arrange reference calls with
former bosses and others you choose. Aah . . . Topgrading brings truth and
honesty, complete information on the candidate’s career, and, as frosting
on the cake, everything a candidate claims will be verified through refer-
ence checks that the candidate arranges.
Topgrading will permit you to double, triple, or even quadruple your
success hiring and promoting high performers. That simple fact will then
permit you to dramatically change your organizational culture—to raise
the performance bar for everyone. And Topgrading coaching methods will
help you develop and retain top talent. The result, as the CEOs of our case
studies state, is improved organizational performance.
On an individual manager level, Topgrading will pack your team with
high performers, which will assure your improved personal performance
and greater career success. And there is frosting on the cake for you person-
ally: because you will be able to delegate to more A Players, you will be able
to enjoy that elusive thing . . . that dream of . . . what is it called, oh yeah—
work-life balance.
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Topgrading Will Make Your CoMpanY More SuCCeSSful 5
What’s new in the Third edition of Topgrading
A lot is new—so much that I completely rewrote the book.
• As the subtitle suggests, this edition proves that Topgrading compa-
nies perform better. The first edition (1999) of Topgrading said, “Here
are the methods I’ve used professionally, and companies improved
their talent because I picked the winners, and by the way, maybe you
can copy what I do and improve your results.” Only a few managers
seemed to do it. The second edition (2005) said, “I’ve taught leading
companies such as General Electric, Honeywell, and American Heart
Association how to use Topgrading, and they are hiring and promot-
ing a lot more high performers, so you can, too.” Preparing for this
third edition I asked, “So what? Does better talent really make a differ-
ence?” “Of course,” Topgraders unanimously say. However, to my
knowledge there has never been a book or article that, like this book,
cites dozens of CEOs and heads of HR who say, “I’m certain our sales,
profits, market share, etc., are significantly better because of Topgrad-
ing.” This edition quotes dozens of CEOs who say Topgrading has
made their company more successful.
• Topgrading is for all companies, large and small. Tiny, small, and
medium-size companies can afford fewer mis-hires than big com-
panies, and all of the Topgrading methods work perfectly well in all
companies. It was my fault that the image of Topgrading became “big
company.” In earlier Topgrading books I cited many leading compa-
nies that embraced Topgrading, and of course they are very big compa-
nies. They dominated the 2005 edition of Topgrading. This edition
showcases extremely diverse organizations—big, small, growth, entre-
preneurial, domestic, and international—in well over 100 countries.
• Human Resources can launch Topgrading! Until very recently
Human Resources could not be the prime driver of Topgrading. Top-
grading historically has started at the top, with the CEO engaging
Smart & Associates to assess and coach the top team, and screen re-
placements. All managers, starting with the top team, participated in
2-day Topgrading Workshops. The company invested in a license to
use all the Topgrading forms and guides, and boom! Topgrading was
launched.
9781591845263_Topgrading_TX_1-356.indd 5 6/6/12 11:24 AM
Description:Topgrading will make your company more successful -- Topgrading basics -- All about A players -- 12 Topgrading steps to hiring 90% high performers. Hiring step #1 : measure your baseline success hiring and promoting people and your costs of mis-hires ; Hiring step #2 : create a clear job scorecard (
