It was a Friday morning. I was meeting with Eric, CEO of a global consumer products company. Eric was talking about his key staff:
“Mary is a good communicator. People understand what she is thinking and what she wants from them. But, they do not like working for her because she is judgmental and very critical of them.”
“Logan is full of energy and very smart. When he has an assignment he jumps into it right away with great enthusiasm. After about 45 days, things are a mess. He always neglects the organizing, planning and collaboration required to lead a project to full and effective execution. Initiatives he leads rarely achieve the desired results and most often come in well behind schedule and over budget.”
“Rob. Everyone wants to work for Rob. People like him. He is fair. He is also warm and personable. His difficulty is communication. People have a hard time understanding what he is thinking about key issues and what he expects them to do.”
The following Tuesday, I was with Barbara, CEO of a business services company. She was talking about her vice president for national accounts:
“There has been no change with him. Despite my coaching and cajoling, he continues to call on only those accounts where he has friends. His performance in new accounts, which are 70 percent of his incentive bonus, is miserable.”
A few days later, I was meeting with Kirk, Chief Operating Officer of a large software company. He was concerned about leadership:
“Our senior management team is good enough. What we lack is bench strength. We just don’t have enough strong leaders at the at the director and manager levels.”
These comments are typical of the conversations that I have been having with senior executives for more than forty years. People issues are one of the most frequent and critical concerns of the executives with whom I have worked. The issues that come up most frequently are:
- The challenge of thinking systematically about the people in a complex organization.
- Deciding who the “right” people are for the organization.
- Understanding what are the critical requirements of jobs and assignments.
- Assessing the people in key assignments.
- Selecting the right people for jobs and assignments.
- Developing people for key leadership positions.
- Handling performance problems.
- Facing Up To Tough Decisions About The “Wrong” People
Getting the right people into the right jobs is critical to creating a high performance organization. It is one of the key challenges for you and your executive team.
Thinking About Your Organization’s People
When it comes to the quality of an organization’s people, I find it helpful to think about people in four groups:
- The members of the executive team.
- The leadership network, which is composed of the key managers and key technical people who are critical to the success of the business.
- The solid employees and managers who do the day-to-day work of getting things done.
- The marginal employees, who are performing below standard.
The Executive Team
The members of the executive team are critical to the process of building a high performance organization. They are so critical that I believe a business leader needs to have a trusted advisor with whom to talk about the key people on his or her staff.
A high capability executive team is a necessary ingredient in building a high performance organization, but it is not sufficient in and of itself. Leadership is required throughout the organization from a network of managers and individual contributors.
The Leadership Network
Every organization has (or should have) a core of highly capable managers and individual contributors that provide leadership to the rest of the organization on a daily basis. High performance organizations have a critical mass of talented people in this group and they are linked together into an effective network.
Building an effective leadership network takes an investment of time and resources. It requires the executive team to identify the leaders in the organization at all levels.
A process must also be designed and implemented to bring these people together so that they can get to know each other. Leadership development workshops and offsite meetings focusing on the strategic and operational plans of the business are an excellent way to build a leadership network. Calling upon members of the leadership network to serve on task forces and teams to solve specific business problems is another way to strengthen the Network.
Although leaders are important, the number of them is generally much smaller than the total number of employees, supervisors and managers. It is easy to overlook the contribution of those people who come to work every day and put in a good days effort on the company’s behalf. These “solid citizens” are the life’s blood of any organization. Their well-being needs to be a key focus of all the company’s leaders.
It seems trite to say that a substantial amount of leadership time needs to be invested in acknowledging and appreciating the solid citizens in your company. However, I find that in many of the organizations with which I have worked, these people are taken for granted.
In the best companies I have experienced, the leadership spends a significant amount of time walking around and engaging employees in dialogue and appreciating their efforts. These companies also focus on maintaining and enhancing the competence and capabilities of their solid citizens through appropriate training, reskilling, upskilling and development.
Your and the executive team’s efforts in this area are critical. It is natural and easy to focus on star performers and high potentials. However, it is the solid citizens that keep the business running from day-to-day and provide the platform for the stars and high potentials to shine. We all know the star quarterbacks of our favorite football teams, such as Ben Rothlesberger Russell Wilson and Tom Brady, how many of their offensive line can you name?
At any given time in most companies, there are a few employees performing below standard. This situation may be the result of jobs or assignments changing to a higher level of complexity (fit), hiring or promotion errors, employees losing interest in their jobs, or other issues such as sickness.
Tolerance of non-performers is one of the surest ways to injure the motivation and performance of good employees. People quickly become frustrated and angered when other employees are allowed to under-perform with no consequences.
I have observed the impact of allowing non-performance on the factory floor, among professional contributors and middle managers, and in executive teams.
This is an area where it is critical to have an effective process for setting performance standards and objectives and assessing peoples’ performance on an ongoing basis. A good performance management process is not sufficient, however. Managers and leaders must have the will to address performance problems as they arise. Situations of under-performance must be confronted, analyzed to determine the root causes and resolved.
One of my clients, Phil Kantz, the CEO of a global equipment leasing company, had a good approach to the problem of non-performers. The standard that he set for the company was “get good or get gone”. By this, he meant that every person was expected to perform his or her job well. He held the company’s managers to a 90-day standard to resolve performance problems once they were identified.
If an employee was unable or unwilling to perform at an acceptable level in his or her job, they were severed from the company. In cases where non-performance was due to a poor fit between the person and his or her job, every effort was made to match the person to a job in which they could contribute to the company at an acceptable level of performance.
Good People And Good Fit
I was talking about the challenge of staffing for high performance one day with my client, Greer Arthur, who had founded and built Trans Ocean Limited into a great company over a period 25 years. Greer’s answer was:
“Get good people”
What Greer meant by “good people” was that they:
- Are strong on the basics of honesty and integrity.
- Are highly motivated to perform well.
- Seek to continuously learn and develop their capabilities.
- Possess potential to grow into more responsible positions and roles.
- Possess the competencies required to perform at a high level in the jobs and roles they are in, or are being selected for.
There is a problem in the above list, however. The list combines two ideas, the attributes of a good person and the idea of a good fit.
Item number five in the list above is the really critical one. A person can be a “good person” who possesses all of the other qualities in the list and not be a “good fit” if they do not have the knowledge, skill and experience to perform at a high level in their specific role or assignment.
So I would adapt Greer’s advice to be:
“Get good people who are good fits”
Getting the “right people” means getting people who are both good persons and good fits by assuring that, in addition to meeting items 1-4, they are a good match for the job, role, or assignment they are in or going to be in. Getting the right people involves practicing hiring up, avoiding hiring down and having an effective way to address selection errors.
This is another key idea for which I have to thank Greer Arthur. I had observed that Greer was very active in his company’s hiring. He was highly concerned with the quality of the people at TransOcean.
Greer’s philosophy was to “hire up” by which he meant that when you have the opportunity to hire someone, hire a person who is better than you. Greer’s concern was that in his experience people frequently “hired down”. By hiring down, he meant that they would hire someone just a bit weaker than they were.
I have observed these processes at work in numerous companies. The companies that focus a great deal of attention on hiring and practice hiring up, Google is a good example, perform at a higher level than the companies that are lax on hiring and where hiring down tends to become the norm.
It does not take very long for a company to become weak with respect to having the right people if its hiring practices allow, or even encourage, hiring down. In my experience, the only way to stay strong from a right people point of view is to assure that hiring process and practices result in continuous hiring up.
What I have found in high performance companies is that the CEO takes a direct and personal interest in the people being hired by his or her direct reports. The CEO also requires members of the executive team to be involved in the hiring by directors and managers. Hiring, like leadership development, profits from the skip level approach.
Handling Selection Errors
No matter how good our selection process and practices, selection errors will occur. Sometimes, it is obvious quite quickly that the wrong person has been selected for a job or assignment. Usually it takes several months to realize that the person is a poor fit.
What is important is to confront the situation as soon as you are aware of it. The questions to answer are:
- How severe is the lack of fit?
- Is there a realistic path to grow this person into the job?
- How long will it take?
- Is there a way to offset the person’s weaknesses while they are growing into the job?
Based on the answers to these questions, it will become clear if there is a way to recover from the selection error, or if it will have to be undone by severing the person from the company.
Acting decisively when a selection error has been recognized is often difficult. My experience has been that there is a pronounced tendency in most companies to “just give it more time”. My observation is that the more time that goes by the more difficult it is to rectify the situation.
There is usually little to be gained by prolonging the agony of the decision and communication with the person involved. I have found that it is better for both the company and the person to recognize the situation and take the steps necessary to either bring the person into a good fit with the job, or get them moving along with their career outside the company.
Swift action is required when a key executive is incapable of meeting the requirements of his or her job. When action is not taken, every day that goes by brings more harm to a key part of the organization. Important things do not get done, valuable people may leave the organization, and it becomes difficult to recruit good people to replace them.
Assessing People In Key Assignments
Clear assessment criteria and an effective, performance assessment process are essential to building and sustaining a high performance executive team and leadership network.
Assessing The Executive Team
We all know the legend of King Arthur and the Knights of the Round Table. One of your key decisions will be choosing who is going to have a seat at your table. When it comes to building and sustaining a great company, the key executive group that sits at your table is of critical importance.
The first step in assessing your executive team is to define the core criteria required to attain and remain in an executive position in your company. In my view, key executives must:
- Possess the technical capabilities to direct their areas of responsibility.
- Hire and surround themselves with highly capable people.
- Possess the intellectual capabilities and business experience necessary to understand the business environment and contribute to the strategy and direction.
- Have highly effective leadership capabilities to mobilize their people, focus their efforts and execute the business plan.
- Be capable and willing to work as members of a team.
- Exhibit high standards of personal integrity and ethical conduct.
- Be willing to enthusiastically put their capabilities to work for the best interests of the organization.
These are the most useful, core criteria I have found for making decisions about key executives.
Assessing The Leadership Network
The next step is to assess the quality of this group. Assessing the quality of the leadership group involves taking a close look at their knowledge, skills and experience in four key areas:
- Functional competence – do they possess the appropriate level of knowledge and experience in their function to perform effectively?
- Business competence – do they have the appropriate level of knowledge and understanding of the Business to make effective decisions?
- Management competence – do they have the appropriate management capabilities to plan, organize and execute as individuals, team members and managers?
- Leadership competence – do they exhibit ability and skill to attract, energize, focus and align people to accomplish results?
If the quality of your leadership network is not strong, a program of upgrading through training, development and replacement will be necessary.
Having an effective assessment process and discipline is a necessary but not sufficient condition for developing and sustaining high performance. Your company must also do the difficult work of confronting and working through performance problems.
Handling Performance Problems
This is another area in which you and the members of your executive team must take leadership and set the example for the rest of the company. My advice is clear. Assess the executive team and members of the leadership network on an ongoing basis. As soon as you are clear that an executive or network member is failing on any of your assessment criteria, it is time to take action:
- Confront the problem. Sit down with the person. Share your perspective on the problem. Ask for their perspective. Listen carefully. Be sure that the person knows that their job is on the line. (This can be a challenge. The person may not want to hear it. And/or, you may not want to say it clearly and unequivocally). Set a time to get back together with them to do some problem solving, unless you are in situation (5) below.
- Create a plan of action. If there is a concrete plan to bring the person to an acceptable level of performance in an acceptable period of time, implement it and monitor the results. This may include adding someone to his or her team that has the strengths to offset the person’s weaknesses.
- Address a lack of fit. If he or she is a good person in the wrong job (bad fit) and if there is a job or assignment where the person can add real value to the company, offer it to them. However, let it be their choice as to taking the job or leaving the company.
- Make the tough decision. If there is no path to successful performance, or there is no time to implement a plan, remove the person from the job.
- Unacceptable behavior. If it is a matter of integrity, unethical or illegal behavior, remove them from the company immediately.
This is a tall order. I have now worked with over 300 executive teams. Each posed its own challenges. In my own experience as a CEO, I have had the luxury of building two executive teams from scratch and have stepped into situations where the individual executives were in place long before I arrived. As a consultant and business advisor, I have been through situations which range from a critical need to replace most of the team members to situations requiring the replacement of one or two key executives.
Failure to Perform
The easiest situations are those where it is clear that one or more of the key executives must be replaced because of failure on one or more of the criteria outlined above. In these situations, it is just a matter of doing the difficult work of confronting the issue, severing the executive(s) in question and getting on with the task of replacing them.
The most difficult situation that I have personally faced was when I built a team from scratch. I had an assignment which involved leading a critical technical area. I had a person who had worked for me in a previous company who had done a good job in this area. Like many CEO’s in a new assignment, I reached for someone I had experience with.
It took about six months before it became clear that the job in my new company was far more complex and challenging than the one in my former company. Unfortunately, my person was just not capable of doing the job at this level of complexity and challenge (a bad fit). Coming to the realization that I had to let him go was excruciatingly painful. Despite the fact that I gave him a very good severance package, our relationship was fractured beyond repair.
I have experienced the situation described above a number of times with clients. It usually proves as, or more difficult for them as it was for me. It almost always results in an irreparable break in the relationship. In the worst cases, I have seen otherwise great CEO’s drag their feet on this decision for prolonged periods. In several cases, I have seen good CEO’s lose their jobs due to their inability to come to terms with the failing performance of people that they have worked with for a long time. When the Board of Directors becomes concerned about this issue, it’s too late. The CEO has then lost some credibility and confidence with the Board.
My advice is to be especially careful about bringing people you have worked with in other contexts into the organization. Be sure that there is a good job/person fit before doing so. There is also the negative impact on the organization of creating an “in group” who all worked together at another company.
One of the most difficult situations, which I have encountered numerous times, involves a member of the executive team who uses his or her relationship with the CEO to try to influence and control other members of the team.
At one client, an executive consistently volunteered to take ownership of difficult problems facing the CEO. The CEO in turn grew to appreciate this executive’s help. The executive created the perception in the executive team that he had a special relationship with the CEO. He then used this perception to influence and control his colleagues for the benefit of his area of responsibility and himself. It took a long time for the CEO to discover that this executive was giving illegitimate directions to other members of the team in the CEO’s name. This breach of integrity should be grounds for immediate dismissal.
Another difficult situation occurs when there are one or more executives on the team who are pretending to go along with the CEO’s direction but fighting it behind his or her back. In meetings they are all smiles and nods of agreement. Back in the organization they are critical of the strategy and direction.
In the bad cases, passive resistance turned into active attempts to subvert the strategy and action agenda. In the worst cases, there were undeclared wars between key executives and the CEO that were tearing their organizations apart. This type of situation is another severe breach of integrity requiring immediate action.
Facing Up To Tough Decisions About The “Wrong” People
A high performance organization treats people with dignity and respect. This includes letting them know where they stand with the company, giving them a chance to adapt to changing conditions and having appropriate processes for dealing with problems, such as lack of fit and poor performance, and severing people from the company when necessary (“get good or get gone”).
This process is complicated by the fact that people are human beings with feelings, hopes, aspirations, dreams and families who depend on them. This makes it difficult to take timely action to address performance issues and often results in incrementally giving the situation more time to correct itself, or just living with it. Situations involving people who have worked for your company for a long time are often very difficult.
If the executive leadership won’t step up to these tough situations and decisions, they can go on-and-on to the detriment of your organization.
© Copyright 2017, A. Lad Burgin, Ph.D. All rights reserved.