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People, Strategy, Execution, and Cash are the 4 Decisions of the Scaling Up Growth Platform. Inevitably, People become the lead domino in transforming a business because only A Players can drive winning Strategy and Execution, which in turn drive Cash. If you have excellent systems, processes, and playbooks to train A Potential candidates, they can be an excellent source of A Players.
If you consider the A Player as the premium “been there, done that,” instant-impact employee from a very similar industry to your own, then the A Potential is the DIY project. The A Potential is a value play, representing up-and-coming raw talent that may come from another industry and be somewhat undervalued compared to people already in your industry.
A Potentials can also emerge from within your ranks. These are deserving employees with proven results whom you can cross-functionally or vertically develop to enhance their skill sets. The key lies in rigorous training programs based on your proven systems and processes, capable of transforming these individuals into fully fledged A Players within six to nine months. Robust, easy-to-follow playbooks drive this transformation.
To draw an analogy, we view the A Potential as a piece of unfinished furniture. If you’re willing to invest the effort in their development, you’ll end up with a superior piece, perhaps of better-quality wood, tailored to your preferences, and boasting a much higher-quality finish, all at a fraction of the cost! However, the key is your willingness to put in the hard work of defining your training systems and coaching the A Potential to their next level of success.
The litmus test for an A Potential is whether you’re consistently satisfied with their value for the money. Even if they make rookie mistakes, it won’t bother you because you’re not overpaying for their talent. You might consider what you’re paying the A Potential as almost a “training wage.” This stands in stark contrast to a B Player, where you’re either disappointed with their performance relative to their pay, or go hot and cold about how you feel about them as employees.
As you may have already realized, companies that successfully implement an A Potential strategy benefit from salary arbitrage in the marketplace. They can find talented individuals well below the market rate for the position, resulting in a win-win situation. The A Potential wins by gaining a built-in promotion from their previous position. The company wins by acquiring a motivated, open-minded individual eager to be trained in their systems and prove themselves at a higher level.
The company also benefits from growing more affordable employees into fully fledged A Players. This approach is similar to sports teams that use “Moneyball” tactics to build “the best team money can buy” with smaller and usually younger payrolls by developing talent in-house. What often happens is that they can provide significant income growth to these younger A Potentials. They become fully fledged A Players relative to the market value, leading to the phenomenon of salary arbitrage.
Whether or not you decide to adjust salaries to market rates is a matter of your own judgment. For instance, we’ve encountered situations where we recruited a $75,000 candidate and developed them into a $90,000 department head, while the market value of that position is around $110,000 or more. Again, your sense of fairness and justice will guide your decisions in this situation. This strategy can drive explosive net incomes that can be reinvested in your employees through quarterly bonuses. In practice, we’ve found that we retain almost 100% of these employees even without adjusting their salaries to market rates because they value the development, personal growth, and the overall compensation package provided by our clients.
We want to clarify one point that has arisen among business leaders: B Players cannot become A Potentials. The A Potential is a distinct category representing raw, up-and-coming talent. If an A Potential cannot develop, they become a B Player, but a B Player cannot revert to an A Potential status, just as a rookie cannot redo their rookie season.
Said another way, the A Potential is a starting point, not a destination. We emphasize this because we’ve heard several leaders express their desire to elevate their B Players to A Potential status, which is a misconception. Once the toothpaste is out of the tube, B Players have no choice but to become fully fledged A Players. For the A Potential, it’s a one-way journey to A Player status with no second chances. Consider this: though not feasible, converting a B Player into an A Potential is in no way a victory.
Ready to load up your team with A Players and A Potentials? Our Scaling Up coaching practice is the world’s foremost authority on A Players. Schedule a conversation with us today. We will show you how we have helped businesses worldwide achieve stronger net margins and happier teams through A Players.