The 33-percent Formula.

By Peter M. De Lorenzo

Detroit. This week, in honor of the Management Briefing Seminars put on by the Center For Automotive Research going on up in Traverse City, Michigan – in case you’re wondering it’s a self-important event that provides a forum for people from the auto industry who talk too much without really having anything substantive to say – I thought I’d follow-up on last week’s column about “The One Percent.”

(Not that I wouldn’t love to skew the goings on up in Traverse City mind you, but the conference attendees manage to roast themselves quite nicely with the searing hot air generated by all of the pontificating going on. And in case you haven’t seen Dan “Captain Queeg” Akerson’s management “tips” as offered to USA Today this week - yes, folks, you guessed it, you can’t make this stuff up - you can read my comments on that in this week’s On The Table.) 

Getting back to the “One Percent” discussion, last week I touched upon the importance of the contributions made by the one-percenters in this business and why they were and are so essential to it. As I said they push, cajole and demand excellence of everyone around them, but not nearly as much as they demand and expect of themselves. They take risks and they take chances. They revel in visionary thinking. They dare to innovate and explore and go down different paths but most important, they dare to dream. Of going faster or doing it better. And in the course of that they achieve greatness.

But in order for those one-percenters to succeed, a car company’s organization has to be structured around them in such a way as to create an environment that fosters creativity and rewards ingenuity so that they can indeed thrive. And the organization derives obvious benefits from this arrangement too.

Thus, the 33-percent Formula.

What is it, exactly? Well, certainly not to be confused with Sergio’s 30-something direct reports, it’s about shaping an automobile organization around three approximately equal but distinctly different talent pools. Whether it’s design, engineering, product development, product planning, marketing or even PR, this is a formula that can work throughout a major league car company in every discipline, if it’s handled properly.

The first 33-percent group is made up of the young but high-potential up and comers, the ones with obvious talent who could develop into the organization’s future stars, but who will also need mentoring and guidance in order to reach that potential. If these young people are handled right – and the organization is equipped to provide the proper guidance - they could go on to do much bigger and better things on behalf of the company.

The second group is made up of the solid everyday performers, the people who do the blocking and tackling and who know how to execute programs. These are the experienced veterans who have developed key relationships inside the company and who know where everything is and understand the resources at their disposal to get things done. There is nothing about this group that is inconsequential or should be taken lightly because when a company needs to grind it out, stay on schedule and execute to the very last detail, these are the people that a company needs to turn to and count on.

And finally there are the stars, the big-time players who lead with their pure talent, ability and guile. These are the prime-time players who swing for the fences and succeed more often than not, the upper echelon leaders spread throughout the key disciplines who consistently deliver at the highest level in everything they do. These stars are easy to spot in the present-day car companies, because they’re the ones in high-visibility, crucial positions essential to the companies’ success.

Together of course these groups add up to 99 percent, leaving room for the one-percenters in the organization to soar, which is the whole idea to begin with.

Does it work in the real world? I developed this concept in my own little corner of the ad world when I managed groups of creative people and over the course of several agency stints I learned about what worked and of course, what didn’t.

First of all, things are never cut and dried and the 33-percent Formula only functions as an approximation. An organization – especially a creative one - is constantly in flux with people coming and going, of course, but I found through trial and error that it generally worked out exceptionally well. There were occasional conflicts among the stars and the one-percenters, but that was to be expected and it ultimately made the groups better.

As I said in my previous column, these one-percenters can play an often-pivotal role in a company’s success. I was able to learn firsthand what the contributions of the one-percenters can really mean to an organization at my very first ad agency when I observed that certain creative types operated in at times strange ways. Often detached and free of concern about pretty much anything, I wondered aloud with my young colleagues as to why they were there, and why they were able to stay there, seemingly unimpeded by even a shred of concern about what was going on around them. And then sure enough an important new creative assignment would arrive and like clockwork one of the one-percenters would come up with a spectacular - and winning – idea. That was an aha moment for me and I never forgot it.

I’m sure that heavily credentialed management types with their myriad degrees would scoff at such an idea, and maybe quite a few of them are up in Traverse City pontificating as you read this, but shaping an organization is serious business and if you get it wrong it can be disastrous.

And if you want to create an organization that’s put together properly, one that’s firing on all cylinders and bristling with talent, depth, executional discipline and the ability to deliver big-time product hits almost at will - and one that especially allows for those one-percenters to thrive and do their thing - then the 33-percent Formula works exceptionally well.

And that’s the High-Octane Truth for this week.