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CRM V: Regression To Mean

(April 30, 2002) - We received a cryptic note from a reader that zeroed in on our understanding of what it takes to recruit in a hyper-competitive environment. "Regression to the mean," he said. "Huh?" was our intellectual reply.

As a company grows in size, it becomes increasingly added to mutual funds and invested in by conservative institutions looking for reliability. The very things that made it strong in the beginning (risk taking, innovation, entrepreneurial leadership) become the enemy of predictable quarterly performance. "Regression to the mean" is a way of describing the fact that big companies tend to deliver mediocre performance as a part of achieving reliability. Over the long haul, the stock market rewards regression to the mean.

Our correspondent was suggesting that objectives like becoming "the employer of choice" for everyone or "a cool place to work" without specific targets in mind leads to an analogous "regression to the mean."

CRM is worthless as a strategy unless you've done the demographic homework. Much like exclusively advertising on large job boards, trying to reach everyone all of the time produces one large mucky pile of mediocrity. The answer is in the precision with which you target your audience.

Out on the Atlantic shelf, there are great fishing platforms that throw huge nets out to catch lots of fish. These floating machines are so intricate that the product of their work, while still on the boat, is a can of tuna. From huge net to cases of Starkist, the process is massive.

It's a bad way to manage fisheries characterized by shortage. It's a path to "regression to the mean." It's the essence of the large monolithic job board.

How incredibly silly it is to suggest that the same web page that engages an Actor from New York will delight a techie from Macon, GA. But, that's how big job boards treat the fish they package. And, it's the model that corporate employment sites have adopted.

How unimaginative and ineffective could you be?

As you consider building a Recruiting organization that uses a CRM strategy, understand that it is inherently different. It focuses on the specifics of the audience it wants to reach. It hopes for intimacy and engagement with each member of the audience. It is not interested in being anything for everyone. It is trying to stave off "regression to the mean."

 -John Sumser


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