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Recruiting B Players

Posted By Dave Lefkow On July 13, 2006 @ 12:00 am In Advice and How-Tos | 12 Comments

We all want the best available talent, but of course we’re not alone. As the market for great talent intensifies, some of the best recruiters will realize that there’s often a place for B players in their talent strategies. Identifying and exploiting these untapped talent pools can make your business a dominant force in your industry.

The Ultimate B Player Talent Strategy: The Oakland Athletics

It has been said that “one person’s trash is another person’s treasure.” Michael Lewis’ Moneyball: The Art of Winning an Unfair Game is a perfect testament to this. Even if you’re not a baseball fan, this is an amazing story with valuable lessons for anyone in talent management. In his best-selling book, Lewis documents the practices of Major League Baseball’s Oakland Athletics, who with a $45 million payroll have stayed competitive against the league’s richest teams, some of whom outspend them by a 4-to-1 or even 5-to-1 margin. To illustrate this, here’s a side-by-side comparison of the A’s (who spend an average of $55 million or less per year on payroll, making them one of the lowest-spending teams in the majors) versus the New York Yankees’ (whose payroll is now over $200 million per year, the highest in the league) regular season records over the last six years:

Year New York Yankees record Oakland A’s record
2000 87-74 91-71
2001 95-65 102-60
2002 103-58 103-59
2003 101-61 96-66
2004 101-61 91-71
2005 95-67 88-74
Total Record (2000-2005): 582-386 571-401

In baseball as in life, money can’t buy you (or George Steinbrenner) happiness. The additional $150 million per year has bought the Yankees less than two wins per season, although the Yankees did win a World Series in 2000. Nevertheless, this is nothing short of remarkable considering how little the A’s spend on their payroll.

How have the A’s done this? By approaching baseball’s talent pool like one would approach an economic marketplace. In the A’s view of the talent marketplace, there are bargains to be had in the players that few other teams covet. Most teams try to find the “five-tool” players – individuals with a combination of speed, power, hitting for average, strong throwing arms, and fielding – and pay a premium for players who have the potential to develop all of these skills. The conventional wisdom to identify five-tool players is to look at statistics such as stolen bases, home runs, average, and fielding percentage. The net effect of this approach is that teams often overpay to get great players (i.e., Alex Rodriguez’s $250 million contract). Meanwhile, the Oakland A’s are looking for entirely different types of individuals. The A’s roster is primarily made up of slow (sometimes even pudgy) players who can get on base a lot. One of the key statistics they look at is a high number of walks, which they covet based on the premise that statistically, what’s really important isn’t necessarily that you get a hit, but rather it’s that you get on base, even if you do it by walking. Until recently, no other teams cared much for this skill (walking).

It is rare that the A’s overpay for a player because the market for the players they seek is relatively soft. There are some interesting parallels to the recruiting industry in this analogy. One parallel is the conflict between the baseball purists and traditionalists versus the new, data-driven upstarts. Just like the generation of metrics-focused general managers that the A’s Billy Beane has spawned, there’s a wave of new metrics in recruiting that defy the conventional wisdom that recruiting can only be measured as a cost center with soft returns. Another parallel I see here is how the A’s look at the market for talent a bit differently than its competitors. In effect, while the Yankees look for the elusive and expensive Harvard MBAs with the coveted packaged goods background, the A’s may have a few of those on their roster but are also looking for non-traditional or other consulting backgrounds from B schools to round out the team. In the A’s talent marketplace, talent is considerably less expensive, less competitive, and easier to find because of this approach.

The Ultimate B Player Talent Strategy, Part II: Enterprise Rent-A-Car

Enterprise Rent-A-Car is the college talent market’s version of the Oakland A’s. Much like the A’s, Enterprise has identified opportunities to target talent that other teams usually ignore. And just as the A’s look at a different set of statistics (on-base percentage versus batting average), Enterprise looks at different performance indicators – it’s your attitude and presence more than your GPA that will get you the job. Its innovative strategy starts with where and how it recruits. You won’t often see a big presence from the Enterprise college-recruiting team at an Ivy League school.

If you’re the valedictorian of your class, you probably have better initial options than a career starting behind the rental counter (to be fair, there are other jobs at Enterprise that might suit you). But, if you didn’t attend an elite school or have a perfect GPA, Enterprise provides viable career options, including the opportunity to run effectively your own business and share in the profits with a multibillion-dollar company behind you.

Another important part of the strategy is its employment-value proposition (something Enterprise’s Marie Artim talked about in the June Journal [1]). Enterprise’s management training program and pay-for-performance models [2] are exactly what its target audience wants in a first job (research is a powerful tool here). They combine to give the company an enormous edge for B players in an industry littered with C and D players. By focusing on talent that other companies overlook and by providing a compelling employment-value proposition, Enterprise has raised the bar on the types of individuals who work in the rental car industry (which is one reason why I won’t rent a car from anyone but Enterprise). It’s no wonder why it’s the largest rental car company in North America. Designing a “Blue Ocean” Talent Strategy

While you’re buying Moneyball, I also suggest you purchase Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant by W. Chan Kim and Ren?e Mauborgne. One of my key takeaways from this book is that it’s often better to swim for the “blue ocean” of unexplored market spaces than it is to swim in the shark-infested “red oceans” with all of your competitors. In the talent market, most attempts at workforce and talent planning are red-ocean strategies. They are focused on reacting to the future business needs of the company and the headcount needed to support them. With this type of limited forecasting model, you’re bound to end up competing for the same scarce skillsets as hundreds of other companies. A disruptive talent strategy will also look at the supply and demand economics of the talent marketplace and identify places where better or lower-tier talent can be inserted into the mix and the risks and rewards for doing so. It will identify the places where no one else looks for talent, and leverage the resources unique to your organization. This often requires developing rather than purchasing talent, and should absolutely defy some of our conventional wisdom of just targeting A players.


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URLs in this post:

[1] Journal: http://www.crljournal.com/

[2] management training program and pay-for-performance models: http://www.erac.com/

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