CHAPTER

16

Back Against the Wall

Just after the turn of the century, Herb relocated Caliper’s headquarters to a space twice the size at 506 Carnegie Center in Princeton. At the time, his consultancy employed over 200 people domestically and half that many in a dozen offices around the world. Caliper’s growth had been consistent throughout the previous decade. By helping companies of every size and shape hire top performers, Herb’s firm was a bellwether of the economy. As the economy improved, Caliper’s position strengthened along with it.

“Everything was looking up,” Herb says. “I remember one of our top consultants calling me. It was in September 2008. He was talking so quickly, I had to ask him to slow down, just to make sure I could understand what he was saying. He was just boarding a plane, and he was absolutely ecstatic. It turned out that he had just left a meeting with one of our key clients and had signed a contract for the largest engagement in Caliper’s history. It was a yearlong program, with multiple opportunities afterward. I told him I could not wait to see him, hear more about it, celebrate, and start planning our next steps,” Herb recalls. “Then, a few hours later, he called me, completely despondent. I’ve never heard someone’s tone change so quickly in such a short period of time. His plane had just landed, and he was reading me an e-mail in which our client said that, because of the financial crisis, all contracts for the coming year were being cancelled.”

With the fall of Lehman Brothers, and other investment and commercial banks suffering huge losses, panic spread. “It was like falling off a cliff,” Herb says. What began with the bursting of an $8 trillion housing bubble led to a collapse in business investment. As consumer spending and business investment dried up, there were massive job losses. Each day, the news got worse and worse.

In that financial tsunami, we were all knocked for a loop. Some of us had our insides knocked out. Others had our hopes dashed to the ground. All of our dreams were put on hold. The setbacks, for many of us, were devastating. Careers were dashed. Businesses went under. Homes were lost. All of us were in some ways set adrift, left unsure as economic, professional, and personal challenges combined to twist and test our very souls.

As we entered what was to become one of Caliper’s most challenging times, Herb asked me to become president of his organization and, together with him, help lead the company through these economic storms. It was a request that I was honored to accept. Together, Herb and I spent our days meeting with our key clients, our top performers, our financial advisors, and our bankers, who were all conveying the direst messages. Then, in the evenings, we strategized around our dwindling options with our executive team, working out various scenarios, depending upon how long the recession might last. Then we would try to get some sleep.

At the time, more than 95 percent of Caliper’s revenue was derived from helping companies improve their hiring. But there was absolutely no hiring taking place. None. Anywhere. Instead, the opposite was happening. Our clients had to start letting people go. And we realized that unless something changed quickly, we were going to have to do the same.

“Every time we turned around, it felt like we were getting knocked down,” Herb says. “We woke up feeling good about something that happened, and the next thing we knew, we were hit with two negative things. When you have more bad than good coming at you, it tests who you are and what you’re made of.”

How could we prepare for a future that was so uncertain? Everything we had learned in the past few decades had little to do with what we were going through then.

As Herb and I sat with one of our key clients, a Wall Street financial advisor whose offices overlooked what at the time was still the devastation left from the World Trade Center, we were told that what we were all going through would continue to get much worse for a much longer period of time before it slowly got better. This financial consultant told us that we would be experiencing the most dramatic employment contraction since the Great Depression. And his prediction that the U.S. labor market would lose nearly nine million jobs, with the unemployment rate exceeding 10 percent, unfortunately, turned out to be very accurate.

When we returned to our offices in Princeton, we saw that two of the four floors of the office building across the way from us were being cleared out. At that moment, as we talked about what we needed to do to persevere, I remember Herb’s upper lip trembled, ever so slightly, then his jaw immediately became taut and determined. What I came to realize in that moment, in between those fleeting expressions, was a hint of what made Herb so unique. First he was being open, accessible, and vulnerable, then instantly digging in with a penetrating determination that refused to be deterred.

“We knew that we could no longer avoid making some of the most painful decisions that we have ever had to make,” Herb says. “In order to get through the eye of this storm, we were going to have to shrink to half our size. Over 100 people who had been working with us would have to be let go, through absolutely no fault of their own.” We were going to have to make those very tough decisions, then refocus and redouble our efforts to keep the company moving in the right direction. We knew that we needed to create a new road map for Caliper. Our focus needed to be less on helping our clients hire more effectively, and more on helping them identify employees who had the potential to become top performers, develop programs to help them and their current top performers reach new levels, coach their key executives, and create more effective teams.

In the meantime, however, we had to make some very quick and difficult decisions—about who would stay at Caliper and who would not. To form a basis for our decision, we reflected upon the qualities that had been essential to Caliper from the very beginning. What was it about the organization that we needed to honor and maintain? By being true to those qualities, we believed, we would find the way to our future.

“We came up with four qualities that have always been at the heart of who we have been, who we are, and who we hoped to remain,” Herb says. “First of all, we certainly needed people who were bright. But that was not a distinguishing factor, since everyone at Caliper was certainly bright. We would also need everyone to be optimistic. Optimism is essential when you are trying to defy the odds. And that, interestingly, started to become a differentiator, as it was clear that some people possessed a very strong, upbeat, can-do attitude. The third quality we needed were people who were truly collaborative. Again, that became a differentiating factor, as some people absolutely thrived on connecting and cooperating with others, and contributing to something that was bigger than them. And the fourth quality, which also became very telling, was to be versatile. We were most interested in those extremely talented individuals who were also willing to expand beyond their own area of specialty. The more versatile someone was, the more valuable he or she became, as we were moving into a future that was full of uncertainty.”

So, with those four qualities—being bright, optimistic, collaborative, and versatile—we had a firm grasp on what had always made Caliper unique, as well as a compass for our future. “As we were about to make some very difficult and painful decisions about which 100 people we had to let go, we wanted to make sure that we were making those determinations in a way that was consistent with our core values and beliefs,” Herb says.

“Still, it ripped my heart out,” Herb adds, shaking his head at the thought. “It was excruciating. None of them were let go because of anything they did wrong. We had to let them go because we could not pay them.” Herb insisted, to the consternation of our bank, that everyone who was let go receive an attractive severance package. In individual conversations, we also let everyone know that we would bring them back, in a heartbeat, as soon as we could, or help them, in any way possible, to find gainful employment elsewhere.

As I led alongside Herb through these terribly difficult times, I learned an enormous amount about him and about myself. I am reminded of the ending of the movie Starman, where Jeff Bridges, playing a visitor from another planet who takes on human qualities so he can somehow get the help he needs to return to his home, says to a scientist, “Would you like to know what I have learned that is most beautiful about your species?” Pausing for a moment, he then says, “You are at your very best when things are at their worst.”

In difficult times, when we are challenged as we have never been challenged before, we become more of ourselves. The shy become shier. The hiders go into serious hiding. The planners get out their paper and pencils. And the fighters start swinging for all they are worth.

“Such times test who you are,” Herb says, “and give you a chance to confirm what you are made of, and what you believe in.”

The same day that we had to let go just over half of Caliper’s employees, we had to quickly switch gears to engage everyone who was staying with us. As Herb notes, “We needed to connect with them, individually, in teams, and as an organization and share our plans that would get us through these very difficult times together. We let them know that we were all in pain and reeled from the loss of our colleagues who were no longer with us. We conveyed to those who remained how immensely important they were to us. We reminded them that they embodied Caliper’s four key qualities—being bright, optimistic, collaborative, and versatile. And finally, we promised them that, together, we would all prevail.”

And, together, we did. We made it through. Sure, we had changed. Our company was smaller. We had to become more efficient. And hopefully, along the way we became a little smarter as well. For Herb and me, though, the time between reflecting and acting had almost completely merged.

Throughout those most trying times, Herb helped me understand that the best leaders have to be able to balance two factors—being able to reflect on all the forces we are facing, then acting faster than our competitors.

Herb and I also quickly learned that whenever we emerged from a meeting together, everyone would be gauging the length and genuineness of our smiles. They were looking to us for signs that everything was fine, that no other shoes were dropping, that we were confident and optimistic about the future. Amid daily signs of contradiction and uncertainty, in individual conversations and town hall meetings, everyone at Caliper wanted to know that we felt positive about where we were going. As Herb shared with me at the time, “Our optimism has been challenged like never before. But our job as leaders is to be realistic, while instilling optimism. That’s the only way to inspire others and create opportunities. Everyone here needs to know that they can believe in us. And they also have to believe that they can help bring about the changes we need to all get through this together.”

Being realistically optimistic. It is the ultimate challenge in such tumultuous times. If we overestimated how well we were faring, it could lead to dire results. Still, we needed to convey confidence—in ourselves, and in everyone around us. At the same time, we needed to create an environment where everyone at Caliper felt confident and optimistic about the future. “Equally important, we also needed to encourage everyone to share any and all concerns,” Herb notes. “If there were any problems, either within our company or with any of our clients, we needed to know them. They might just be unique situations, or they could be pointing toward a trend. We needed to know. We needed ground-level intelligence, and we needed information that was detailed, up-to-date, and unfiltered. Only openness and trust would get us through this together.

“It was vital that we stay in even closer touch with all of our employees than we ever had before,” Herb wisely advises. “Silos would separate us. We needed to know what everyone was picking up on—within our organization, with our clients, and with their clients.” Our antennas were up. Way up. Listening for meaningful signals, positive, negative, or neutral. We let everyone know that any and all information was welcome, because it could be a vital piece of the future we were creating together.

When we consider a leader’s job during such tumultuous times, as Ram Charan, noted author and business strategist, says, it starts with “inspiring and motivating people to go beyond their fears and painting a believable future that is waiting after the storm.” The other, equally important realm is “the nitty-gritty of doing business successfully in a very tough and unpredictable environment.”

For us, opening each and every door of communication was the most direct way to let everyone know that we were in it with them. Being closer than ever before was important: those connections proved to be our salvation—with our employees and with our clients.

“What was important to realize,” Herb says, “was that our attention needed to be completely focused on our employees and our clients.”

He pauses, then adds, “One of the key themes we were hearing from our clients was that they knew that what really distinguished them was their top performers. Everything else, all the products and services they were providing, could all be copied by their competition in a heartbeat. What would get them through this devastating economic downturn was their top performers, those who were inspired to overcome this challenge, those who were open to change, those who could seize new opportunities.”

The problem confronting our clients was exactly the same problem we were facing. And it pointed the way to how we could reinvent ourselves, emerging from these troubled times stronger than before.

We were all in the same predicament—our clients and us. We were all facing the same concerns, fears, hopes, and dreams. Our goal, we conveyed to everyone at Caliper and to our clients, was to take the same insights and expertise that we had traditionally shared with our clients in their hiring decisions and focus instead on helping them identify, develop, and retain their current top talent.

We were shifting our paradigm. “When all is said and done,” Herb notes, “a company’s top performers alone are its competitive advantage.” We needed to get closer to our clients, letting them know that we understood their concerns, shared their pain, and could help them attain their goals in ways that they had not previously considered.

“For nearly a half century,” Herb says, “Caliper had grown very nicely predominantly by helping our clients improve their ability to hire top talent.” This crisis, however, forced us to look at ourselves and our clients through a new lens. “Our new goal was to move the dial on developing talent. Rather than having just 5 percent of our resources devoted to and revenue derived from developing talent, we wanted the development of current employees to become an equal, if not greater, part of our consulting capabilities. We had the talent to help our clients with executive coaching, leadership development, team building, and succession planning. The need was clear. It was just a matter of refocusing our attention, repackaging our services, fine-tuning our messages, and redoubling our efforts,” Herb notes.

It was a vision for the future, connected inextricably with Caliper’s past. Our new strategy grew from the strengths we already possessed. And it worked. “Some of my fondest moments occurred as we were recovering and knew we were in a position to reach out to some of the people we had to let go and invite them back. Many are here now, and others found their ways to other pursuits that they find very fulfilling,” Herb reflects. “In addition, for those of us who went through that most challenging time together, bonds were created that are irreplaceable,” he adds. “Now, whenever we hear of anyone in need, whether it is a tsunami in Japan, a hurricane in Haiti, or someone we know coming across hard times, Caliper’s employees immediately dive into fund-raising activities. But what I love is that they do it by breaking up into two teams and competing to see which team can raise the most funds. Then, of course, Caliper matches those funds. It is a beautiful way for empathy and competitiveness to merge, forming something very meaningful.”

Caliper now has as many employees as it did before the Great Recession, with an organization whose foundation is significantly stronger, since it depends much less on the vagaries of hiring trends.

While we were going through those most difficult times, Herb would periodically say to me, “At least we know where the wall is.” Then, feeling behind me, I would nod and respond, “It’s right here. And our backs are against it.”

Sometimes when our backs are up against the wall, we can surprise ourselves with what we are truly capable of. We can push off those walls and discover something deep within ourselves. We just have to make sure we do not create walls within ourselves, or between us and other people. Walls are for scaling. Or for knocking down and crumbling.

“Together,” Herb says, “we moved away from the wall, out of the shadow, into the light of day. All it took was our belief, our faith, our confidence, and our trust—in ourselves and in each other.”

Who Are You Spending Most
of Your Time With?

Who are your top performers? What qualities distinguish them? Do you let them know how important they are to you? Do you know how to hire people who share their same dynamic qualities?

A short while ago, Caliper surveyed over 500 managers and asked them who they spend most of their time with: Top performers? Average performers? Or poor performers?

Nearly half the managers said that they were spending most of their time with their poor performers.

It begs the question: Who should you be spending most of your time with?

“Many executives get trapped into spending their days dealing with problems—often caused by less-than-effective employees,” Herb says. None of us plan our days this way. It’s not like we’re driving to work thinking, “I know what I’ll do. I’ll get in, grab a cup of coffee, and spend my day solving one problem after another—and never get to the things I really need to do.” But how often does that happen?

As Herb notes, “If you, as a leader, are spending too much time with poor performers—or trying to resolve problems caused by underachieving employees—you are probably not focused on the future, on what your company can become.

“Don’t spend time trying to change people. Spend time hiring and developing more people like your top performers,” he adds.

And spend more time with your top performers.

One of Caliper’s clients, John Beattie, former senior vice president of human resources at GMAC Insurance, told us a very revealing story about recognizing and developing top performers.

He said that one day he got a call from one of his best performers, and she told him that she was quitting.

He was stunned and asked why.

She said, “John, I’m out here all alone. I can’t get any of your time. This just doesn’t work for me anymore.”

There was a half hour between the phone call and the time she got to his office. During that time, John told us, he did a lot of soul-searching. When she arrived, he told her that he understood completely what she was saying. Then he sincerely apologized. He asked if she would stick with them and give him a chance to prove that he could turn the situation around. And fortunately, she did.

John said that was his wake-up call. He immediately began spending much more time with his top performers, and those who have the potential to be his next top performers. Those who are not stepping in, stepping up, and giving it their all would receive very little of his time.

Essentially, his top performers helped him prioritize and manage his time much more effectively.

Take John’s advice.

Spend less time with your poor performers and more time with your best employees—because your best employees want to hear from you and they want to be heard. Focus on the people you want to stay—the ones who would make you feel like you’d been kicked in the gut if they left. Your attention will keep them engaged because they will know that they are valued. And they will be much less likely to start looking for greener pastures.

“Spending more time with your top performers will send several messages to your organization,” Herb adds. “First, it will affirm your values. It will be a physical reminder to everyone of who and what you value. Second, it will inspire you and keep you energized and enthused. Equally important, you will gain insights into what is really working for your company. And you will have a much clearer understanding of what to look for when it is time to hire your next top performer.”

On top of that, as you get to know your top performers even better, you will also grow with them. You will recognize the distinguishing qualities that you all share and that make your organization so special. Your day will be filled with optimism, resilience, empathy, persuasiveness, perseverance, the capacity to quickly analyze problems, the knack for arriving at solutions, and the ability to connect with people in very real, deep, and meaningful ways.

“At the end of the day,” as Herb says, “your top performers will help keep you focused on what works—and how to keep making what works even better.”

Questions to Ask Yourself About Rising to Challenges