April 7, 2022
TPL Insights: Building Peak-Performance Cultures #113- How Bill Higgs Built a Culture of Peak Performance at Mustang Engineering Part 2
With paraphrased content from Bill Higgs’ book Culture Code Champions
This week, we continue our examination of Bill Higgs’ success in building a peak performance culture using a key TPL principle, Disciplined Human Capital Practices.
Bill’s hiring methods created significant savings to his bottom line in many ways: First, most companies hire four to six people for every “keeper” (someone who stays two years) they find. This churning of people makes your existing team less efficient as they must train and sort through them. Bill’s team hired for culture fit and performance and engaged all its stakeholders in recruiting.
Second, Mustang’s people did not leave, because they knew and liked whoever recruited them, or because they had tried hard for quite a while to get in the door at Mustang. They knew they were selective! Mustang hired people who were looking for a long-term career and folks they thought would stay for the long haul. The few people they lost to companies that threw money at them during boom times often returned for the culture.
Mustang focused on being a “talent magnet.” Initially, they were creating an internal culture that had a far-reaching reputation. The best people in the industry were looking for a way in, even in the early days, and all that was needed was connecting the dots. Bill says, “Trust me: there are not enough employment incentives in the world to create a sustainable influx of talented people into a toxic and failing entity!”
The oil industry is one of extreme booms and busts, and great people became available during downturns. Good times or bad, Mustang was always on the lookout for talent. Their first direct hire, in 1987, was a piping designer who had taken a job selling cars at a nearby dealership to support his family. Bill hired him and he’s still employed with Wood Group, who bought Mustang in 2000. Not only has Divakar Pathak provided 35 years of loyal service, but he’s also helped recruit many others. Mustang not only hired good people who’d been laid off, but they also helped people find jobs when they weren’t hiring, which helped them build a reputation as people who care.
Bill says not to be shy about looking at the companies you’ve worked for in the past, to see if anyone else wants to move on. If you’ve worked with them directly, you already know their work habits and personalities, so that removes some of the unknowns from the hiring process. This may sound like “Hiring 101,” but Bill says he’s amazed at how many business leaders don’t do this. They figure they have a Human Resources department to advertise for candidates, review the mountain of resumes that inevitably come in, conduct initial interviews to screen for the best probable matches for the job in question, and then recommend a select few to the hiring manager.
But what do you do if you don’t have a huge HR department? Or any HR department? At Mustang, Bill’s team was so busy growing their business, finding new clients, and working on projects, that no professional worked full time in HR for the first ten years they were in business! You read that right: in fact, Bill was still doing payroll (in addition to his other engineering, sales, and management responsibilities) when the company had grown to 450 employees.
Bill says that even if you’re not running a small business or starting your own business, you should think like an entrepreneur. Don’t offload responsibilities—like hiring—to someone else if you can spend a little bit of time thinking creatively about where you can find good people. Sometimes, just a few minutes of mining your memory bank and your personal network can pay off for everyone involved!
Staffing Agencies Can Be Your HR Group for Screening and Scouting
Thinking like entrepreneurs led Mustang to sign exclusive contracts with three staffing agencies to help them scout and screen for quality people. In return for exclusivity, Bill asked them to finance their payroll until they were paid by our clients. This solved their main cash-flow problem because banks would not help a startup in the oil business. These agencies had complained that they could not get anyone to leave Mustang, so they were challenged to find Mustangers to join them to earn their fees. They knew the quality and type of collaborative people our company wanted, because they were familiar with the people already working for them. Even when Mustang was not looking for people, sometimes these agencies would call saying, “We have found a Mustanger for you!” This quality of person does not come available all the time because they are strong team players, and the agencies knew when they had one. Since we knew the screening was top rate, those people were always hired. The agencies performed a critical part of our HR function for Mustang.
Creating Job Security through The Job on the Corner of the Desk
Once you have good people, you don’t want to lose them. People need to feel secure, so they can focus on doing the job for which you’re paying them. You don’t want them to worry that your company will start laying off or go out of business because you don’t have enough work. You don’t want them to spend their time looking for another job (or a second, additional job) in case this one doesn’t work out. If you can alleviate—or eliminate—those worries, it helps people focus not on job-hunting but on doing the job they already have and doing it better. After all, that’s what “job security” is all about.
Mustang’s primary goal was to create strong job security because it was important to productivity as well as longevity. Accordingly, Mustang developed a system of overloading on work—not so much that people would feel overwhelmed, but just enough that they would feel secure. If they knew there was another project waiting for them when they finished the one they were working on, they were more likely to work harder to finish the current project. The “job on the corner of the desk” became a Mustang mantra, and their people were encouraged to “please hurry up and finish, so you can get onto this next project.”
In addition to relieving the stress people had about possibly needing to find a new job, this philosophy increased efficiency. Many people find it difficult to finish projects if they don’t have a firm deadline or if there’s nothing waiting on the corner of their desk. As the old saying goes, “work expands to fill the time allotted,” and projects tend to drag out unnecessarily. Bill didn’t want that to happen—and you don’t either, no matter what type of business or organization you’re in. The promise of the next project helped people finish projects on time, and it even helped them to think of innovative ways to be more efficient and to push to complete the projects on which they were working. All so that they could get to the next hot project—the “shiny object” on their desk that attracted them.
This approach was in stark contrast to what had traditionally happened in the oil industry—and in many other industries that operate in boom-and-bust cycles. If there’s not another project waiting in the wings, people get laid off. That’s not good business: not for you, not for your organization, and not for your employees. Nobody wins when that happens. An added benefit of the job on the corner of the desk (or your equivalent for keeping people secure in their role with enough work) ties in to retaining great people. When people work together longer, they develop efficiencies and work faster and more productively. That efficiency reduced the labor hours required to do a project, which made Mustang’s cost per project competitive even at fully loaded labor-billing rates. Therefore, Bill could pay the most competitive rate for people and still have a lower estimated cost in his bids—a win for the person, for the client, and for the business! In contrast, when you have new people joining your organization all the time, they need to come up to speed, which slows down business. That speed, which is tied to tenured people, creates a competitive advantage, and helps build culture.
Bill’s book is full of amazing suggestions, particularly in 2022, when we’re all experiencing the tightness of the labor market. If Bill and his team could build a company with less than 5% turnover in an industry known for severe cycles and very little loyalty between employers and employees, we can too. I hope this content has been helpful for you. Stay tuned for next week when we dig deeper into Part 3 of the Mustang culture.
Consultants in Retained Search & Leadership Advisory