Tuesday, December 2, 2008

Real Leaders Fire Underperformers


Here’s a cheerful message for the holiday season:

Leaders, when’s the last time you axed an underperforming manager?

Never? Really? Then you’re not leading.

Does this sound a little harsh? Like a chapter right out of “Tony Soprano on Management”?
I’m really not heartless, really. In fact, I’m talking about one of the most compassionate things you’ll ever do as a leader.

Let me explain. Stop me if you’ve heard this story before:

Charlie has worked for your company for a whole bunch of years. He’s loyal, a good guy, but he’s a terrible manager. He hasn’t done anything drastic enough to get fired; he’s just pretty much ineffective. What do you do with Charlie? You can’t just fire him, right? That would be too harsh, and disrespectful, and what kind of a message would that send to employees?

I don’t know about you, but this is a story I hear all the time. It will emerge during talent review meetings. Talking about high potentials and how we’re going to stretch, challenge, and development them is the fun part. But then I’ll suggest that we need to take a look at those managers in the “3C” box (lower left corner, the low performer, low potential group). The room goes silent – nothing but crickets chirping.

After a little more prodding we’ll talk about these underperforming managers, and in many cases, it turns out they’ve been in that same spot for years. I hear a lot of excuses – and sometimes genuine, although misdirected compassion, as to why we shouldn’t fire Charlie and his underperforming colleagues.

I’ll also hear the story of Charlie when I get a call for help. “Hey Dan, Charlie’s at it again, turnover is up, we’ve just lost another one of our star performers, our customers are irritated, etc…, can you have someone from your team give him some coaching? Is there another course we can send him to? How about a book?” And even worse, “How about if we do another round of team building with Charlie and his entire team?”

This is when I usually check my “banned managers” list – the ones who have already been given every developmental intervention we have to offer, and are coming back around for seconds or thirds.

Finally, there’s that heart to heart conversation with Charlie’s manager. The manager really wants to do the right thing, and is on the verge of pulling the trigger. He’s been given every opportunity to improve, and the manager feels terrible that he’s let Charlie down. But he just can’t do it. Isn’t there something else we can try?

In these cases, especially the last one, I’ll sometimes send managers an old, 2003 scanned copy of an article written by Geoff Colvin, a Fortune magazine writer, called “Make Sure You Chop the Dead Wood”. It’s the most convincing case I’ve ever heard to convince a manager to make a decision. Unfortunately, I Goggled and searched and can’t find an online copy, but here’s an excerpt that gets to the heart of it:

Let’s be clear about the corrosive effects of avoiding this problem (underperforming managers). A recent survey from McKinsey is fairly chilling: Keeping poor performers means that development opportunities for promising employees get blocked, so those subordinates don’t get developed, productivity and morale fall, good performers leave the company, the company attracts fewer A players, and the whole miserable cycle keeps turning.

It gets worse. Employees know who the underperformers are. They know that the top executives know who they are. So every day the top team fails to address the problem, it’s sending a message: We’re not up to managing this outfit. Refusing to deal with underperformers not only makes your best employees unhappy, but it also makes them think the company is run by bozos.

Why don’t companies act? Some fear it would lower morale, which is nonsense. Mckinsey asked thousands of employees whether they’d be “delighted” if their company got rid of underperformers, and 59% strongly agreed – yet only 7% believed their companies were actually doing it. Executives often say they leave poor performers in place because they want the company to be seen as humane. That’s just more evasion of reality, of course. As Ed Michaels of McKinsey says, “The attitude is, “Let’s be fair to Charlie. He’s been here 21 years.” But we say, “What about the eight people who work for Charlie? You’re not being fair to them”.

A senior executive at Hewlett-Packard, put it like this: “"I feel there is no greater disrespect you can do to a person than to let them hang out in a job where they are not respected by their peers, not viewed as successful, and probably losing their self-esteem. To do that under the guise of respect for people is, to me, ridiculous."

Sure, dealing with underperforming managers is hard work. There are often legal issues, and HR will insist on process and stacks of documentation. The path to firing someone is one of the emotionally hardest things a leader will ever have to do.

However, in today’s knowledge based economy and lean organizations, the performance of a single employees matters now more than ever. That’s the only competitive advantage most companies really have.

Managers, if you’re not developing employees and acting on poor performers, you’re not leading. And you’re doing a tremendous disservice to your company, your employees, your customers, and your community. And you’re not doing Charlie any favors.

18 comments:

Michael Ray Hopkin said...

Dan, you are spot on. Keeping underperformers (especially managers) is detrimental to both parties. In every case of which I am aware, firing underperformers was a blessing in disguise to them. It frees them from the burden of failure and gives them an opportunity to start fresh.

Leaders need to be aware of the other extreme: firing people for one little misstep. When this happens it's usually done to cover the lack of leadership on the part of the person who too quickly pulls the trigger.

Handling underperformers takes a lot of effort. True leaders will do everything they can to cultivate their people into effective performers. In the cases when it becomes apparent that cannot happen, the best action for everyone involved is to fire underperformers. -Michael

Ben Simonton said...

Very well said. You have left nothing for me to add.

Such managers are leading their employees to disrespect their work, their customers, each other and their bosses. They should resign their positions.

Best regards, Ben

CherryPie said...

There also needs to be a proper process in place to deal with this sort of issue.

Art Petty said...

Dan, I love this topic. While there is no joy in the act of firing someone, you don't build a high performance organization by perpetuating poor performers. I've honestly never walked away from firing someone when I did not feel like I was doing the right thing for the organization and all of the people that depend upon other high quality people for their livelihoods.

My opinion...the root cause of this common problem is related to the difficulty that so many managers and leaders have in executing feedback discussions. If our managers are uncomfortable delivering timely, constructive feedback (due to lack of training and practice), imagine how weak the appraisals are and how low the motivation is for anything as drastic as termination. I would keep going on this important topic, but I think you've inspired me to write my own post! Thanks for the great topic that you raised here.

-Art

Dan McCarthy said...

Michael, Ben, Cherrie, Art –

Thanks for adding your comments.

I don’t take the idea of firing anyone lightly, especially a long-term employee that’s really trying hard. Everybody deserves a fair chance, maybe even 2-3, and we need to follow a consistent process. This is hard stuff – where leaders earn their scars.

And Art, I totally agree on the feedback issue. While there’s always two sides to these things, the manager being fired often feels like they’ve been blindsided.

Rachel - I Hate HR said...

Great post. We've been working with our supervisors on this for lower level employees (somewhere is better than nowhere). We're finally starting to get them to see the value of getting rid of those individuals.

talentedapps said...

I'm with Art, I might pile on this one as well to keep the conversation going. This is a tricky part of management but a critical one.

James Higham said...

Loyalty and some ability in other roles is a human resource too. Loyalty is increasingly becoming an undervalued resource but without it, the firm inevitably cracks.

Dan McCarthy said...

Rachel, TA, and James -
yes, please, pile it on!

Dan said...

Dan, the excerpt of the article was so good, I tried finding it myself. It is posted on the internet.

http://money.cnn.com/magazines/fortune/fortune_archive/2001/01/22/295568/index.htm

Thanks for the great content and keep it up!

Dan McCarthy said...

Dan -
Nice work! Thanks.

Chris Young said...

Amen Dan. Amen.

Sarah said...

I have never seen a company make the kind of investment in an under-performer. How often does it happen?

Dan McCarthy said...

Sarah -
Depends on what you mean by investment. Training, feedback and coaching? Maybe not, but many do. Time? I think many managers would say too much, at the expense of others.

Anonymous said...

Great work, Dan.

Great punch, great packaging, the right lines ("you're not a real leader if you're not doing this"), appearing to "cut to the chase", "not being afraid to say what everyone is afraid of saying", using all the buzz words etc etc.....calculated for mass impact. Are you a good salesman? You must be.

Of course, you've missed some very basic, integral, HUMAN factors in your Icarus-type flight to the Sun.

The biggest aspect and most challenging task of great "leadership" is INSPIRATION (please note, not MOTIVATION, but INSPIRATION). If you cannot inspire your people and make sure everyone catches your vision, you're bound to have some people who don't seem to have logged in to your vision. Call these underperformers if you like, but had you taken the time to inspire them, it would have saved you all the groaning and moaning you've been doing about "they take so much of my time and energy, etc etc etc." Nice way of shifting some of the blame.

People look to leaders for inspiration, not for coaxing, cajoling, "motivating" or anything like that. You can never MOTIVATE anyone forever. Motivation is short-term and myopic; Inspiration is long-term and strategic. A simple thing, but most "leaders" routinely go with myopic ideas like the ones you've expressed above.

Odds are, you've done EVERYTHING to get your "underperformers" to work for you except INSPIRE them. And till you truly INSPIRE them, they're not going to budge. Perhaps you don't even have a vision. If you don't have one, then all this talk about "underperformers" etc is pie-in-the-sky.

I'm sure you also think that inspiration is only for those "overperformers" who can DO something about it. A popular misconception, but it isn't going to help things:)

Have you read anything from the age of the kings of old, Dan? Take even Jesus. Who did he "motivate"? Not a single person. Who did he sell himself to? Again, not a single person. But Jesus' inspiration has conquered the world. Are you going to be able to emulate this as a leader? And what was the single issue that clinched it? INSPIRATION.

That, and the fact that Jesus took a bunch of total underperformers to change the world. Each of his 12 was an underperformer all through, but after Jesus' death, they changed the world - they're overperformers even today.

Even with a team PACKED with overperformers, the Software industry wouldn't be able to execute ONE measly project that would end within your carefully constructed timeline. When that's the level of "leadership" we're dealing with in the Software Industry, have we even a right to talk about it?

Anonymous said...

Yawn - I'm just not inspired, sorry.

Anonymous said...

I am wondering about demotion (with appropriate feedback and buy-in, of course). Why isn't that discussed? I am an engineering manager with no business or management training other than on-the-job, so please excuse my ignorance. Is demotion generally considered a completely unrealistic option?

Dick said...

Well, I think Dan is right. Anonymous talks about inspiration. But the fact is you can't inspire evreyone. Some people just can't get it. No matter what you do. Attitude is the key, and not everyone has the right attitude, and it's not a thing that outsiders can help you build. You catch the right attitude because you understand your position and have a conscious desire to perform well. Attitude is not a thing you can "inspire" in others.