According to Lara Morgan, the multimillionaire founder and former Chief Executive of Pacific Direct, which manufactures and supplies toiletries to five-star hotel chains around the world, recruiting top talent is up there with the most important priorities for any successful business.
Before selling Pacific Direct in 2008, Lara oversaw hundreds of staff members and she modestly believes her best hire – a general manager she poached from shoe brand Reebok – helped her build the business from a good going concern into a £20m global success story.
The role of the boss
Not only is capturing good people a requirement for a good business, but entrepreneurs should accept responsibility for motivating staff and for creating the kind of company culture that drives business forward.
“People are everything in a growth business,” says Lara. “The quality of the people, their potential and their fit to the company culture is the responsibility of company leaders and executers of the strategy.
“When the whole company culture is grounded in the expectation that all comers are expected to be the best – even the customers – then you set the bar high and the results will out-strip other companies who don’t share the same ambition, drive and desire for high-performance.
“I wasn’t great at everything in Pacific Direct, but one thing I got right was insisting on employing people I could trust to deliver. They had to be rigorously tested for skills, checked for references and previous performance, and we interviewed them to make sure they fitted in with our unconventional style. They always gave a lot in return.”
Lara believes you should always hire people based on their character as well as ability. Her first recruit was a team-mate at her hockey club who was “the second gobbiest person on the pitch – which was good because I needed a sales person”. But, it’s possible to learn about character traits in the interview room, as well as on the sports field. “Throw in some alternative interview questions,” Lara says. “It’s a great way to strip out some of the spam and the nonsense – you really get to know the person.”
When hiring top people, it’s important to pay a little extra if you need to; even if it means they take home more than you do: “When I hired my general manager I gave him £126,000 a year. I was on £24,000,” says Lara.
“Word-of-mouth recommendations are also a great way to secure top senior people,” she adds, “and a useful way to avoid pain later on.” Lara describes her decision to hire a financial director who was recommended by a third party as being “one of my best ever decisions.”
And if you can’t find someone to fit the role straight away, don’t feel pressured to fill it regardless. Lara believes that it’s better to leave a position open than to recruit the wrong person – that could set your business on a backward path. “If you do make a mistake and get the wrong person for the role, you’ll get a bad feeling almost immediately. When you do it’s best for everyone if you act straight away.”
To help in this process it’s vital to get employment contracts right and to start new recruits with a probation period. Probation cuts both ways and allows staff to jump ship if they feel uncomfortable in their new role. That said, it’s better to keep them happy so you’ll need to offer more than just pay. “The environment in which people work, the flexibility of working location, the reputation of the brand in the market – many, many things have an impact on the overall attractiveness of a company,” says Lara.
This is not to say Lara never made recruitment mistakes. She admits to making the occasional slip-up, particularly when it came to talented people who didn’t sit well within the company culture.
“I can think of two occasions when things went wrong. One was a PA role in my company. She was too senior-minded and the wrong cultural fit; she basically put up a glass ceiling beneath me so no one could get access to me. We needed structure and professionalism but not to the point of annoying everyone! We also employed a solid sales director who let bad leadership habits creep in. For example, he allowed the sales team to abuse our expenses system and allowed divisions to develop between the sales team and the rest of the business.”
Lara’s advice is straightforward. “Don’t delay your hiring decision or your business will suffer, but when you do take people on, especially senior staff, make sure they are not only qualified to do the job but also that they fit neatly into the company structure.”
By hiring talented, motivated and like-minded people, you will lay the foundations for growth that will supersede expectations. Get it wrong and you’ll waste time and money going back to the drawing board.