I Never Fired Anyone Too Soon

One of my TEC members terminated the employment of one of his direct reports recently. The now gone employee had lost the confidence of his team. Performance was off plan. Morale was down. My member moved quickly to remove this key member of his senior management team. When I asked about the abrupt termination, my member responded, “I never fired anyone too soon.”

Truer words, in a business context, may have never been spoken. Anyone who has ever managed an employee who was not performing knows the drill. Marginal employees are given every opportunity to succeed. They are coached and prodded. They are rewarded for temporary improvement and threatened when the inevitable backsliding occurs. Managers agonize. Co-workers fret. Performance is sub-optimized.

The question is why. Why do managers allow marginal employees to drag down the performance of the team and perhaps the entire organization? And then, after why, what are we to do about it? Here are a few suggestions.

Popularity over accountability. Patrick Lencioni, in his leadership fable, The Five Temptations of a CEO identified an issue for many leaders. We want to be liked. Being liked by close friends is one thing. The need to be liked by direct reports threatens accountability within the organization. It often leads to feelings of favoritism and unfairness.



What to do about it? The CEO in Lencioni’s fable quit rather than deal with the issue. Pretty dramatic. And not exactly a career enhancing decision. It is, however, not bad advice. If you are interested in being popular, join a country club. If you want to manage, give your people direct, honest and timely feedback.



The devil that you know. “Well, boss, I know Randy isn’t performing up to the expectations of the job, but at least we know what we’ve got. If I had to hire someone new I’d be starting over with an unknown commodity. It could be worse.”



Mark Belling is fond of saying “rationalization is the second strongest human drive.” Anything is better than dealing effectively with the fear of firing an underperformer. At best “the devil” is a poor excuse for a bad hiring process.



TEC Resource Specialist, Tom Foster, has a better alternative in a hiring process based on matching time span capability with the level of work and decision making required on the job. Foster replaces the gobbledygook of the typical job description with a specific role description organized around Key Result Areas. The process is described more thoroughly in Foster’s book, Hiring Talent.



The Performance Improvement Program. “We can change this guy. He has all the talent in the world. We’ll suck up the lost productivity and improve his performance over the long run.” Really?

And/or, “I made the hiring decision. We’ve got to give him a chance or I will look like I made a mistake.”



When rationalizing the effectiveness of the Performance Improvement Program, ask these two “acid test” questions instead. 1) If the employee quit, would you be really upset with the loss? 2) If you had it to do over again, would you hire this person for this job? If the answer to either acid test questions is “no,” the marginal performer should be offered up to industry straightaway.



We don’t have sufficient documentation. “We’re going to get sued if we terminate this individual. She is in a protected class.” Yep. You’re probably going to get sued. And the settlement amounts have grown to the absurd. It is better to settle and chalk it up to “bad management” than let some EEOC bogeyman drag down the rest of the organization. Better yet, buy some Employment Practices Insurance, stop worrying and get on with it.



Overall, the lack of documentation suggests a lack of a management system that insures an accurate understanding of what is expected in terms of job performance and provides timely and specific feedback on performance compared to expectations. Another TEC Resource Specialist, Jim Cederna, developed a process he calls the Personal Development Plan that provides structure to the expectation and feedback loop. Cederna’s process includes a set time line for improvement or exit. He leaves it up to the employee to make the changes necessary to be successful, but with a timeline that insures management action.



Other Processes. There are numerous variations on the “weed or feed” approach to hiring, firing and retaining good people. Top Grading provides a no-nonsense framework for hiring and retaining only A-players, for example.



Jack Welch at GE was legendary for his 20-70-10 forced grid rankings of all employees and the determination to weed out the bottom 10 percent each year. It was also thought to be cruel and unusual punishment for GE people. As he points out in his book Jack: Straight from the Gut, however, the process to remove the bottom 10 percent of his people was just the opposite. Welch thought it was brutal to keep people around who were not going to grow and prosper. According to Welch, “there is no cruelty like waiting and telling people late in their careers that they don’t belong.”



Red Scott, a colleague of mine from Florida put it another way. “The best thing you can do for a good employee is fire a bad one.” A structured weed or feed process will help get it done.

An Option for Herb Kohl

The cacophony regarding a new arena for the Milwaukee Bucks is swelling.  One side says the taxpayer needs to belly up again like we did with Miller Park.  Just let the 0.1% stadium district sales tax ride after it expires in 2017.  No one even notices this insidious little tax, the logic goes.   

The other side wonders why ordinary folks, with no love of basketball, rock concerts or monster truck shows, should foot the bill for a bunch of rich athletes and entertainers and one super-rich owner.  This is a private, for profit business, after all.  What business does the government have subsidizing private businesses?  

This is a PR nightmare playing out before our very eyes…again.  The Seligs threatened, whined and cajoled their way to a new stadium in 2001.  State Senator George Petak of Racine was thrown out of office after casting the deciding vote in the bitter sales tax battle.  There is an alternative that Senator Kohl might consider.  An alternative that a few Wisconsin companies have already found beneficial.   

Harry Dennis, the owner of TEC Wisconsin, devised a succession plan that puts the company in a trust upon his death.  The trust is managed by an “advisory panel” with the intent of carrying on the corporate mission in perpetuity. The company is still intended to make money.  It continues as a private entity.  There are, however, essentially no owners.  Schneider National in Green Bay has a similar non-ownership succession set up.  The Green Bay Packers are similarly “owner-free.”  The Packers make a lot of money.  They had little trouble finding funding sources for the $300 million renovation of Lambeau Field in 2000.   Brown County residents even voted to tax themselves with a 0.5% county sales tax.   

The downside is that Senator Kohl’s estate takes a financial hit.  Unlike the Seligs who took the subsidy and then sold the company, the trust owns the company (with certain provisions)…forever.  While the trust option puts a little less money in the senator’s estate, it also establishes a legacy that would make him nearly immortal.  And he might just get the new arena without the wailing and gnashing of teeth. 

I Know It When I See It

In the 1964 U. S. Supreme Court case of Jacobellis vs. Ohio, Justice Potter Stewart described his threshold for obscenity and pornography declaring, “I know it when I see it.” 

Business strategy is a little like that.  Well, not like pornography, exactly.  But it is important to know it when you see it. 

One of my TEC members had been struggling for several years with sales growth.  He created any number of sales plans.  He hired and fired numerous sales people.  He brought in a consultant.  He read books on sales management.  He increased advertising.  Devised a social media campaign.  Went to every “networking” event imaginable.  He bounced his ideas off his TEC group.  He worked hard.  Sales, however, did not grow. 

Then one day my member met the CEO of a firm that could have been considered a competitor, but was significantly larger is size.  The CEO of the larger competitor lamented the fact that his firm had “outgrown” several smaller customers.  The smaller customers demanded an inordinate amount of time.  They were more of a distraction to his organization.  He wanted to fire some of them, but feared the mess the process could leave behind. 

These messy little customers were right in my member’s wheel house.  He worked with his larger competitor to assume responsibility for these unwanted “C” customers and transitioned a few with little or no selling effort at all. 

It was then he recognized the potential shift in sales strategy.  He developed a simple ABC customer analysis and an elegant transition process that resonated with larger firms in his industry that had similarly “outgrown” some customers.  He promoted the process locally.  Then, rolled it out nationally.  Sales grew.  Dramatically. 

As a TEC chair, I would like to say my member developed this strategy through a formal and effective strategic planning process…like the one we talk about a lot in TEC.  On the other hand, this member recognized strategy when he saw it.  It didn’t fall out of a SWOT analysis, but it did beat working harder.  To paraphrase TEC Resource Specialist Chuck Reaves, “Strategy trumps hard work.”  Be prepared to know it when you see it.