During a meeting with a couple of other Vistage Chairs, we were discussing the most common mistakes we see CEO’s make. This is the first, in a series, about them.
“If I didn’t have to deal with people, my job would be easy!” My members and I often share a laugh when this is said. People issues are by far the most difficult problem for caring CEOs.
I have categorized employee performance into two areas: 1) Technical performance, or what and how much an employee does is either high or low and 2) Personality, how an employee interacts with others, is either positive or negative. The gray area represents when an employee’s performance and/or personality is inconsistent.
These categories give us the following “types” of employees:
The “Cancer” employee is easy. Employees exhibiting poor performance and negative personality need to be fired now! The most common mistake of a CEO is waiting too long. These employees damage your business. Good employees hate working with them and are demotivated by the experience. And, everyone questions your judgment and leadership for keeping them a nanosecond longer than you should.
There is a fable that if a frog leaps into boiling water, it will immediately jump out. If it is placed in cold water that is slowly heated, it will not notice the slight increases in temperature and will be slowly cooked to death.
This analogy applies to long term, loyal employees who were hired in the start up phase of the business. They are great people who work hard, are pleasant and reliable. However, the company has grown faster than they have, and they are now in a job where they are unable to perform. The rest of the workforce recognizes it.
The CEO avoids the performance issues because this employee played a vital role in the company’s formation and he/she is a truly nice individual. The CEO feels that making any change in this employee’s job status is disloyal and disrespectful. I disagree. I don’t know of anyone who likes to be in a job that he/she does not have the ability to perform well. Protecting “Boiled Frogs” prolongs the pain for everyone. If it is avoided long enough, it will impact the company’s ability to grow.
If you have Superstars, or potential Superstars, spend the majority of your time and effort with them. The most common mistake is to spend valuable time with underperformers while ignoring Superstars, because you think they don’t need much. Wrong! Minimize time with underperformers and cultivate your Superstars.
Do you have someone in your company is really good at what they do but has a negative personality? The mistake here is thinking that he/she is untouchable because their talents, sales, or knowledge are too valuable to lose and his/her personality is a necessary evil. Short-term, that may be true. The long-term impact of driving away significant business and Superstars is often not realized until substantial damage is done. Consider adopting a ”No Asshole Rule.”
Squeaky Wheels and Mediocres are inconsistent performers. Squeaky Wheels show technical potential and have a negative personality that emerges unpredictably in the form of constant complaining. Mediocres are really nice people who unpredictably show signs of good enough performance.
The mistake with both of these employees is a delayed action. As the leader, you need to make a decision about them. Do they have potential to develop into a Superstar? If yes, then actively develop them. If no, then either move them into a position where they can become a Superstar or move them out of your organization.
The single biggest mistake with all types of employees, is underestimating the impact of your delayed action. For example, if you have a Boiled Frog or Cancer employee, CEOs often look at the effect of that employee only. But the rest of the organization receives a message too. Do you want to send a message that Mediocrity or Cancer is welcome here? Your Superstars will be the first ones to see it and leave.
I do understand how difficult and unpleasant it is to confront an employee’s performance and no one no one likes to do it. You are the leader and it’s your job to make those decisions and have those challenging conversations. Management guru Peter Drucker said, “Whenever you see a successful business, someone once made a courageous decision.” People decisions are on the top of the list.