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Right Away & All At Once: Five Steps to Transform Your Business and Enrich Your Life · 1 of 14
Right Away & All At Once: Five Steps to Transform Your Business and Enrich Your Life
entrepreneurship HIGH

Step 4 Business — Build a Team (Clean House If Necessary)

Right Away & All At Once: Five Steps to Transform Your Business and Enrich Your Life Greg Brenneman
team-building sled-dog-principle hiring board-governance compensation

Key Principle

A+ players are a turnaround necessity, not a luxury. Start with the board (governance precedes operations), then build the senior management team via four sequenced questions: Structure → Selection → Empowerment → Compensation. The Sled Dog Principle governs retention math: in a turnaround, expect to keep roughly 1 in 4 senior leaders; in a good-to-great move, the inverse — roughly 3 in 4.

The board has three responsibilities: (1) force a great 5–10-year strategy; (2) run continuous CEO succession (always developing "two or three great internal candidates"); (3) assess financial and reputational risk. It selects directors against three criteria — diversity, honesty, courage — and reserves three mandatory seats: a sitting/retired CEO, a markets-savvy member, an audit chair.

Why This Matters

B and C players never hire A players, so the top of the organization must be A or the rest cannot be. You cannot fix the talent pipeline from the middle.

The Four Key Questions are causally ordered: structure must precede selection (you can't pick the right people for the wrong boxes); selection must precede empowerment (you can't delegate to the wrong people); empowerment must precede compensation (pay must follow authorized outcomes). Inverting this sequence anchors decisions to incumbents and politics.

The Sled Dog Principle's mechanism: the team that drove the sled into the ditch has internalized the failed strategy as muscle memory. Workers four or five spots back see only the dog directly ahead, so leadership refresh must cascade — top-only changes leave the rear of the organization staring at the same backs.

Good Examples

  1. Continental's officer turnover — three divisions had produced "three of everything" (61 officers). 50 exited; 20 new executives were hired. The canonical Sled Dog application.

  2. Milacron turnaround — CCMP acquired the 150-year-old industrial in 2012; EBITDA went from $80M to $200M in three years and it returned to the NYSE. Driven by a blank-sheet org chart and network hiring (Tom Goeke, Ron Krisanda, Bruce Chalmers, John Gallagher). The "loser sweats" — panic-discounting by salespeople ground down by years of financial distress — showed culture-of-losing destroys margin, not just morale.

  3. ADP's "One ADP Initiative" — saved roughly $100M/yr by consolidating finance, IT, HR, and legal. The blank-sheet pass revealed an existing role to eliminate (president/COO) plus a missing role to create (CIO).

  4. The Fly Across the Atlantic Test as executive screen — imagine the candidate next to you on a ten-hour flight. The inescapable shared situation surfaces gut information about energy and collegiality that structured interviews suppress; specifically screens for the "uniquely win-win-win oriented" servant-leader disposition.

Counterpoints (Antipatterns)

  1. Hiring inside the existing network of B players — produces B/C recommendations. The room running the "Who do you know?" exercise must itself contain A players with A-player networks, or the cascade regresses. Headhunters give "fifty-fifty" odds because they sell candidates they haven't observed working.

  2. Eeyore retention — keeping chronically negative, "not on the bus" managers because they're tenured. Rule: "If the value you add is less than your ability to be a pain in the butt, it is time for you to go." Managers universally report wishing they had acted sooner; never the reverse. Others are watching how you handle exits, so move quickly and treat exits fairly.

  3. Senior-only perks / unaligned comp — executive health care, life insurance, cars, and tax gross-ups don't move share price or retention; they become pure fixed cost and destroy the trust pre-condition for empowerment. Convert that spend into performance-contingent incentives.

  4. Equity pushed below the level where it's perceived as real money — at Continental, pilots called options "funny money." Forcing equity on employees with low risk tolerance produces resentment, not motivation.

Key Frameworks

  • Blank-Sheet Org Design — Draft the ideal chart in isolation answering what does the plan require? Only then pull out the existing chart and run gap analysis (duplication, missing roles, cultural mismatches). The sequencing is the whole point.
  • Fly Across the Atlantic Test — gut check for servant-leader energy.
  • IQ Dipstick Test — first non-negotiable screen: raw intelligence floor. "If I put the IQ dipstick in a candidate and it comes out two quarts empty, there is no recovery."
  • Network-First Hiring ("Who Do You Know?") — gather executives/board; lay out Go Forward plan and new org chart; place existing A players; identify exits; then for every empty box, including three and four levels down, ask "Who do you know who would perform really well here?" Surfaces step-up candidates invisible to active searches.
  • Hire People Who Challenge You — complementary skills; dissent before commitment, alignment after. Yes-teams are easy to assemble and dangerous.
  • Cascade Staffing ("Go all the way down") — each top-team member repeats the audit inside their own division; validate by visiting frontline shifts personally (midnight hangar, off-hours stores). Culture is a supervisory phenomenon — to a third-shift mechanic, "the third shift maintenance supervisor was Continental."
  • Trust but Verify — assign Go Forward responsibilities to specific leaders; require self-authored execution plans; meet frequently; operate "with one voice" externally. Empowerment without verification is abdication; verification without empowerment is micromanagement.
  • Mood Elevator — 13-rung emotional ranking. Gratitude at top = best decisions; upset/angry/frustrated at bottom = worst. Curiosity is the midpoint and the "express button to the top" because reframing "what an idiot" as "I wonder why they think that" is the cheapest route back to good judgment. The shared label lets teammates intervene without insult: "I can tell you're on the bottom of the Mood Elevator — take a walk around the block."
  • Be Here Now — Senn Delaney focused-presence discipline. One task, one conversation, one person at a time. Enforce physically: start meetings on time and lock the door once visibly (norms set by one-time enforcement); confiscate devices in a box at the door.
  • Three-Part Compensation Doctrine — (1) salary at range midpoint, bonus split ~70% common metric (EBITDA private / EPS public) + ~30% individual Go Forward performance, options struck at acquisition price, senior team required to buy shares; (2) strip senior-only perks; (3) push equity down only as far as it's valued.
  • Funny Money — match comp instrument to risk tolerance. Below a certain organizational depth, cash beats options. Continental's pilots traded options for an extra dollar an hour; when the stock ran $6 → $120, respecting their actual risk preference was both ethical and operationally correct.
  • Myers-Briggs Team Building — off-site one or two days; everyone takes the MBTI; results shared openly so personality friction becomes legible information rather than interpersonal noise.

Key Quotes

"The first responsibility of a leader is to define reality. The last is to say thank you. In between, the leader is a servant." — Max De Pree, Step 4 epigraph

"It is very hard for the sled dogs that drove the sled into the ditch to pull it out and head in the right direction." — Step 4

"B and C players rarely hire A players. If you want A players at all levels of the organization, you need A players at the top." — Step 4

"You need three things to have a great board: diversity, honesty, and courage." — Step 4

"I call this process 'trust but verify.'" — Step 4, "Empower Your Executive Management Team"

"You need to be careful what you ask for and what you reward senior executives for, because you are going to get it. The correlation between behavior and pay is very strong." — Step 4

"Your end of the canoe can't be sinking and mine doing well, or vice versa." — Step 4

Rules of Thumb

  1. Build the board first. Audit composition against the Go Forward plan annually; fill the three mandatory seats (sitting/retired CEO, markets-savvy member, audit chair) before company-specific gaps. Rotate top officers through board meetings so directors know them personally (Home Depot rotates the top fifteen quarterly, ~half-day each).
  2. Draw the ideal org chart in isolation before looking at the current one. Reconciling backwards anchors you to incumbents.
  3. Expect ~25% senior retention in a turnaround; ~75% in good-to-great. If your numbers are far off either, you're either keeping sled dogs or churning unnecessarily.
  4. Run hiring through your own network for every empty box, three and four levels deep. Headhunters are a fifty-fifty bet; directly observed candidates dramatically beat that.
  5. Apply the Fly Across the Atlantic Test and IQ Dipstick Test as non-negotiable screens. Insufficient horsepower cannot be coached around; energy-drainers poison teams faster than their output justifies.
  6. Don't delay Eeyore exits — but handle them by the Golden Rule. Others are watching; how you exit people defines culture for those who remain.
  7. Require the senior team to buy shares with their own capital. Alignment claims are unverifiable without skin in the game.
  8. Strip senior-only perks; push equity down only as far as it's perceived as real money. Below that depth, cash beats options.
  9. Install shared vocabulary (Be Here Now, Mood Elevator, blue chips). Compressed phrases let teammates correct each other without confrontation.
  10. Cascade hires down and validate at the frontline shift in person. A 95%-happy workforce isn't success if the unhappy 5% clusters under one bad supervisor.

Related References