Over the recent holiday period, I had a chance to read an interesting leadership and HR management book, Looptail. Looptail is Bruce Poon Tip‘s story of how he created G Adventures, a world renowned adventure travel company, based in Toronto. After backpacking in Asia, Poon Tip started his company with only his maxed out credit cards and a passion to create meaningful and sustainable travel experiences.
Almost 25 years later, G Adventures is the world’s largest adventure travel company with over 1350 employees and over $200 million in annual revenue. G Adventures has been consistently recognized for its leadership and human resource development practices, including being named National Geographic Adventures’ best ‘Do It All Outfitter’, and is among the Top 100 Employers and 50 Best Managed Companies.
Here are some of the key messages from Looptail about Poon Tip’s views on HR management:
1. Passion & Purpose
Poon Tip shares that if a business wants to be sustainable and successful, it has to have passion and purpose to engage both the staff and the customers of the business. He encourages business leaders to understand where you started from and to develop your brand story, which is critical to understanding your purpose and to engage people with your brand. He believes if you find your purpose in the world, either personally or as a company, and believe in how your brand makes people feel, you won’t be forgotten.
2. 20/70/10 Rule
Poon Tip was concerned that his company’s people practices weren’t aligned with its core values. They managed everyone to the lowest common denominator. They made HR policies apply company-wide based on the behaviour of a few people, which then punished everyone.
To change the performance culture of his company, he implemented the teachings of Jack Welch, former CEO of General Electric. Welch described the 20/70/10 rule. Every company has 20 percent of its workers who are high-potential people, 70 percent who get the daily work done, and the last 10 percent are the poor performers that need to be managed out. Poon Tip’s belief is that the mistake most organizations make is that they don’t properly identify their bottom 10 percent, yet end up spending most their time and resources managing this group of people. He also believes the middle 70 percent is the most important group, as they’re the ones who get the work done.
3. Death of HR
This chapter title was an attention grabber. Poon Tip heard Jack Welch speak, and Welch said that HR had to be represented at the highest level of any great organization. One of Welch’s closest confidants was his human resources person. Poon Tip believed if he truly wanted to create a company defined solely by its culture and its people, his HR leader would be critical to the organization. However, his concern was that traditional HR departments are set up to keep people from making errors, and take away their freedom and ability to think for themselves.
The two areas Poon Tip regards as most important in HR are hiring the best people and fostering a healthy work environment. So he completely changed his company’s human resources function. He transferred many of the administrative functions to their finance department, and created two new departments: Talent Agency and Culture Club. The Talent Agency was tasked with finding the best people for the organization, and managing the performance culture (top 20 / middle 70 / bottom 10). The Culture Club is a group whose job is to promote their culture. They set up all company functions, run all internal communications, and organize the programs the company does.
4. Hire People You Hate
While this was a headline for a cover story of a business magazine that Poon Tip was interviewed for, what he meant was slightly different. Instead of hiring people you would like to be friends with, he believes you should hire people who are not like you, and even people whose style is so different from yours that they irritate you. These are generally people who have the skills you don’t. Poon Tip used to joke with young entrepreneurs that they should should hire people they hated.
5. Celebrate
Poon Tip believes anyone who wants to build a winning culture needs to celebrate. Great companies go out of their way to make a big deal of every time they do something better than everyone else. People want to be part of a winning team, and celebrating successes is not only good for building connectedness with your people, it also helps attract star performers and engages your customers.
Ultimately, Poon Tip believes that to be successful, a business must create an environment where people are engaged and happy. Happy not in the sense of superficial pleasure, but a deeper happiness based on the teachings of the Dalai Lama, who says “Our purpose in life is achieving happiness.” Poon Tip focuses on four conditions to create the environment in which people can achieve happiness in his organization:
1. The ability to grow. Everyone wants to feel that they can grow, develop and progress. Companies need to have programs in place to help people grow and develop.
2. Being connected. People want to be connected to the people or company that they work for. With the rise of the social media and blogging, there are more tools than ever to keep people connected.
3. Being part of something bigger than yourself. Regardless of your position, you want to share a common purpose and have a united understanding of your company’s greater mission. Being part of something greater than yourself is about building a community whose members are committed to doing what they can for others and being aware of how your work impacts those around you.
4. Freedom is the basis of happiness. If you manage your people carefully and create programs and an environment where people can grow, and you work tirelessly to put a star in every seat on your company’s bus, you will have fewer people who try to take advantage of the system. You should make it easy for people who don’t fit or are underperforming to exit. That freedom allows both parties to move forward: the person will find happiness somewhere else, and the company will find the right person who will contribute to creating freedom by being responsible and doing what is in the best interest of your company every day.
Poon Tip believes when people are put in an environment that has all four of these elements, while it does not make them happy on their own, but it does allow the potential to achieve happiness if people truly want it.
Looptail provides a number of thought provoking stories and lessons about leadership, human resource management, and employer branding that can be applied to small and large businesses alike.
