If you’ve not read “Good to Great” by Jim Collins yet, then I highly recommend that you do so. It’s been a few years now since I read it myself, but the lessons this book contains have really stuck with me.
In the book, Collins does multiple case studies of two, similar companies who work in the same field. One of them really progresses to a new level and the other stagnates by comparison. He then tries to identify what the companies did differently; in short, what made one company great and the other merely good?
Collins has a lot of analogies in the book and there’s a particularly excellent one he uses that relates to what I want to write about today: hiring and firing. He says that your company is like a bus and that you need to both think about getting the right people on the bus and the wrong people off it.
That second point is important and often overlooked. Sometimes, you need to realize when it’s time to cut bait. You need to see that you’ve hired the wrong person, that it’s not working out for either party and that you should let them go.
It’s the hiring process that I want to talk about today, though. Specifically, how should you structure your business in a way that helps you hire the right person for the right job?
Well, when it comes to business structure, I like to follow a simple but effective three tier approach. Tier I is entry-level; data entry, customer service, that kind of thing. Tier II is a step above; almost like a perfected Tier I. These are go-to people in your office who have experience, know exactly what they’re doing and can serve as trainers to those in Tier I. Tier III – in the context of our profession – relates to trainees and fully-fledged appraisers; analytical people, critical thinkers and decision-makers.
I spoke on the phone recently with a business coach. She’d been hired by an appraiser that knew my work and he’d asked her to get in touch. She was enquiring about my business model and – through sheer coincidence – happened to refer to the same tier-based model. She said her client was looking to move his own appraisal business to the next level and that he was essentially considering going all-in: hiring a couple of employees at Tier I, a couple more at Tier II and another at Tier III. She asked if I thought this was a good idea. My response? A pretty unequivocal, “Not really.”
Firstly, hiring a bunch of people and training them all at once is a headache you don’t need. Secondly and most importantly, we work in a pretty niche profession. There are a whole lot of terms and little details that are extremely important, but which can only be learned over time. That’s why I strongly prefer hiring Tier I individuals and continuing to train them and progress them up the ranks.
Finally, as regular readers will know, I am a huge fan of “off-shouldering”, or the law of delegation. You might ask, “Which of these Tiers can I delegate to?” and my joyful answer would be, “All of them!” You can off-shoulder tasks of different complexity levels to each of these Tiers.
I will say, however, that when it comes to the really important stuff – the stuff that can break your business if handled incorrectly – you need to be fully aware of both state laws and USPAP regulations. I don’t want to speak to your state laws – they’re something you need to research yourself – but USPAP basically says that it doesn’t matter which of your employees does the work… it’s going to be your name on the final document. Accordingly, you need to be pretty darn careful about your hire. It’s your reputation and your livelihood on the line at the end of the day, so you need to be 100% sure you’re getting in the right person for the job.
Hiring new staff is an integral part of growing your business, but you need to make sure you do it the right way. My advice is to follow this tried-and-true Tier-based system, progress your employees up the ranks and allow them to grow with experience. Do this, be smart about it, get reliable people you can delegate to, oversee and ensure the quality of their work, and you’ll be well on your way to taking your business to the next level.
For more information on this subject, please download and listen to The Appraiser Coach Podcast Episode 094 – The People on the Appraiser Bus.