As small business owners, we wear many different hats.   Among which, hiring the right people, and helping them achieve their highest potential, are two of your most important responsibilities.   But which one is MORE important?

This is an oft-debated topic – at big companies and small – about whether it’s more important to:

A.           Hire the best people, or

B.           Get the most from your people

Many large companies spend a lot of time and energy teaching their managers about choice (B) – getting the most from their direct employees – while devoting surprisingly little attention to the recruitment of “A Players.”

Why is that?   Perhaps it stems from the difficulty of dealing with under-performers in large organizations – no matter how bad someone is at their job, it can be very difficult to fire them “only” for general incompetency.   And if someone is merely average, but they show up for work every day, and perhaps even display an amiable attitude – then they’re probably cemented into their comfy cog of mediocrity.

So at a big company, the manager takes stock of his or her team and figures they’ve “got what they got” in terms of personnel – so the focus turns to coaxing the most out of the existing lineup.

We small business owners, though, would be toast if we operated this way.   Because we know that the real key to our success is hiring the very best people.   The old saying by  startup guru John Nesheim is that startups can’t afford to hire good people, because they make too many mistakes.   The implication: only the very best will do.

It’s not our job or responsibility to spin cycles trying to improve someone who can’t otherwise “get it done” on their own.

There’s no time for that.   Besides, it’s too risky – a bad hire can be demoralizing to the entire team.   It drags everyone down when you have a less competent person on board.

What we small business owners need to do is hire the very best people we can find, and then enable our hired superstars to perform at the highest level they can achieve.   This basically means providing some support and guidance when needed – but really, staying the heck out of their way so that they can tackle projects and build great things, without feeling trapped by any managerial barriers.

To illustrate the vast difference between greatness and mediocrity, let’s create an example – at a big company, let’s take an average individual contributor, and say they have a baseline productivity of 1.   Now a good manager may very well be able to “coach them up” to a higher level of productivity – maybe to 1.25, maybe up to 1.5 (25 or 50% more productive).

It is unlikely, though, they will ever equal the productivity of a higher performer, a great talent, who might perform at a level 2, or 3, or higher – that is, they are 2 or 3 times as productive as an average employee in the same role.

But here’s the important factor in small vs. large organizations – at a large company, the top performer is  likely inhibited  by the framework in which they must operate.   They must navigate through significant red tape.   They have a schedule packed with mindless meetings all day.   And most importantly, their role is limited by their job title – hence there is ultimately a ceiling on their potential contributions.

At a small company, the role limitations are significantly less (or even better, they may be virtually non-existent!)   So our superstar performer is able to contribute near their highest level of potential output – not simply up to an artificial ceiling that has been imposed on them.

So a great person in a smaller organization may be 10 times, or even 20 times or beyond more productive than an average person would be in the same role.   This could be the key product person – or marketing person – or even the CEO.   The bottom line is that if we removed this person, we almost couldn’t imagine our company without them (we probably wouldn’t want to imagine it!)   Therefore, replacing him or her with 10, or 20, or even more people, is not a trade that we’d make.

Getting the best out of your people?   Sure, it’s important – but when we do the math, we small business owners know it’s not nearly as important as getting the very best people in the first place.

About The Guest Author: Brett Owens is CEO and Co-Founder of Chrometa, a software startup that helps individuals and small businesses easily manage and analyze their time. Brett is also the blogger and founder of the investing blog ContraryInvesting.com, and he contributes regularly to leading financial sites SeekingAlpha.com and BeforeItsNews.com.