Bold Exec

Letting Go

Every organization has one, or several, or lots. People who just can't pull their weight. Maybe they don't have the skills, or maybe not the drive, or maybe they're misplaced. You can be certain that either: (a) they know they're not doing the job and are miserable each day or (b) they don't care. In the latter cae; who cares? In the former case, it's always a good idea to demote the person to a job he or she can do and then you'll have a great employee. But there's not always an available landing spot. So what do you do?

Do CFO's Make Good CEO's?

Maybe! Sometimes! Depends! Real definitive answers!!! Without any hard data, I suspect that this promotion path, CFO to CEO, occurs more often than it should. I know a lot of great CFO's, and I know of severalgreat CEO's that came up the CFO path. That's not the issue; I'm not being discriminatory. The issue is whether CFO's as a category wind up being favored more for the top spot. Is that true? Why would that be?

The Personnel Matrix: Summary

Solid personnel decisions are one of the most important management functions. They impact individual positions and the way the entire organization views the CEO. Here's a summary of the last four weeks on this very important topic:

o Grade each individual according to capability alone. Then grade each according to attitude. When these two characteristics are completely separated, its much easier to make a discrete and binary detemination; e.g. he/she can do the job or not; and he/she has her heart in the right place (see previous weeks articles for more in-depth characteristics). With that information place them in the Personnel Matrix.

o Do whatever it takes to keep “Don’t Lose ‘Em” Performers (UL quadrant) fully motivated and fully compensated. Don’t ever lose one!

o Never trust a Mercenary  (UR quadrant). Reap the benefits while they’re there and pull the plug before they do any real damage.

o Shift Still Valuable (LL quadrant) employees back to their ability level to create “Don’t Lose ‘Em” Performers throughout the company.

o Fire Poisons f(UR quadrant) faster than you can sign the pink slip, even if you temporarily have to do that job yourself.

o Make these decisions rapidly. 

o The Personnel Matrix won’t solve every personnel evaluation problem. But it will help solve most, and on all will impart a clarity you’ve not previously experienced.

Poison

When both attitude and capabilities flash red, take on the tough decision to fire; fast like a bunny. Fire this person immediately, even if it’s a direct report and you have to do his job yourself.  Don’t make the common mistake and leave this person in place for a while, saying to yourself “Well, at least some things are getting done. Besides, I don’t have the time to do his job,” or "I haven't started a replacement search yet", or “I don’t know how to do his job,” or….  To delay is to continue doses of Poison.

Believe me, it’s always better to have an opening and take the time to fill it than to have someone like this in the organization. You don’t know how much disruption they cause, how much time you’ll spend doing repairs, how many screwed-up signals get to the rest of the organization, how far off base the people he influences will be, how your image and message and values get distorted because this person represents you.

Mercenary

As we consider the UR quadrant, think about your company in terms of a medieval society. This high-performance warrior is indispensable against your enemy but you never know when he’ll abandon the cause, switch sides or kill you. Yet for today’s battle, he’s critically important.

An interesting person to have in the organization; on the plus side, typically the egos and capabilities are so high you’ll get top-notch work when their attention is on the subject at hand.  He’ll dazzle customers, investors, and sometimes other employees with his skill. Don’t make the common mistake. Look out for your own interests; you owe this person nothing other than the specific compensation which they earn each day. You can’t ever fully trust him. With trust, you have a Star Performer; without trust, nothing he does can be accepted without checks and balances.  Your job is therefore much harder. Not only are you responsible for the end result, you’re also the means by which you get there. 

Treat him like a Mercenary.  Recognize his loyalties may be anywhere, but for sure are highly vested internally. He might be with you totally on the next battle; but who knows?  Double-check sources for any critical decisions or implementations; at the same time, reap the benefit of his skill.  Keep him in the job while you privately look for his replacement. 

The day the replacement is hired, fire the Mercenary without any empathy or severance other than what will fulfill your contractual obligation.  He played you, you play him.  It’s all fair.

Still-Valuables

All organizations have Still-Valuables, but they’re not frequently recognized as such. He can’t do the job, she’s not carrying her own weight, he’s over-compensated, she never should have been put into this job. But she’s loyal, his heart is in the right place, she stays until the job is done, he’s honest and reliable. Don’t make the common mistake. Don’t remove them from the organization. Rather demote to a level where they can perform. Don’t lower their comp but put it on extended freeze. Convert this person to an upper left hand corner Don’t Lose ‘Em. I’ve done this to over 30 people in my career; in every single case converted someone from “I hate to go to the office, I know I’m over my head, I might get fired” to a person whistling as he or she comes to work early full of pride in their performance.  Read further.

Dont Lose 'ems

If you have several upper left hand corner persons on your team, Don’t-Lose-‘em’s, do a cartwheel. Usually there are only several in a couple dozen. This is the easiest-to-deal-with category. But don’t make the common mistake. Individuals with these quality-of-character and capability characteristics are way too hard to find, so do whatever it takes to keep this person fully motivated and fully compensated before external temptations appear. The common mistake is to skimp a little on compensation, to take him for granted because “he’s loyal, he won’t leave, he’s not looking”. All that may be true, but when an outstanding external offer does materialize, because of their nature they won’t play the game of counter-offers. He’s not likely to come to you with the offer and open negotiations; that’s not his style.  The alternative consideration, providing for the family, will weigh heavily on his conscience.  He’ll be mentally gone before you know it, in a way consistent with his high character quality. And you’ll lose, more ways than seem obvious at first.

These Don’t-Lose-‘em performers are known to the organization. Losing one or more can be disastrous to morale.  Recognizing them and taking action not only saves them, it also lets the organization know you are pretty smart. The extra compensation and attitude required to make a handful of these employees feel totally loved is irrelevant.  The loss to your organization if you aren’t astute, or skimp, is huge.

Stay within the boundaries of good sense, but making this individual feel really wanted is critical. It’s especially important to create this feeling before a competing offer comes in. Be a leader not a laggard in compensation for this category. Be willing to pay somewhat above grade. Assume big offers will be coming in so stay ahead of the competitive curve. Count on an offer coming in that is so much more than their current compensation plus love package that they’ll question whether they are truly appreciated.  Competitors and recruiters will know this person is somewhat unique and will be in constant contact. 

Due to this individual’s nature, you don’t have to worry much that he’ll be on a search and leave in the middle of the night. You do have to worry about whether he’s being taken for granted.  Don’t let that happen.  Don’t rely on his good attitude, his “heart’s in the right place” loyalty.  Be aggressive; provide the up-front support necessary to make this person unbudgeable. 

The Personnel Matrix: How It Works

Making timely and accurate personnel decisions has more benefits then may be obvious. Your organization, your customers, your suppliers all see your key personnel as they really are; not when they're putting on an act for your benefit. When you accurately deal with your top personnel issues, your stature and respect in the organization will skyrocket. The personnel matrix gives you a solid tool to help in the process. It takes what is typically a linear evaluation and makes it two dimensional; allowing you to separately consider the two most important characteristics of an individual, and then know what action to take accordingly.

• Category 1: Is the person capable or not of doing the specific job?

• Category 2: Is their attitude appropriate or not?

Click through to see the specifics:

Making Great and Fast Personnel Decisions

I have presented the personnel matrix dozens of times to MBA students, and introduced it last year. It is always extremely popular because of its high effectiveness. So here it is again.

The personnel decisions you make, or don’t make, will make or break your organization’s performance and your career. Nothing is more important. Personnel decision-making is an acquired art not a science. Through years of trial and error experience, some good, some bad, I developed a method which makes the process much more determinative, accurate, and fast.

Human relations departments attempt making the process more "scientific" by installing grading systems and evaluation criteria, a scale of 1-5 for example.  But people aren’t linear, they’re compound and complex. Others make these decisions by gut feel. My breakthrough related to completely separating two evaluative factors. They are attitude (expressed above with a heart for a good attitude) and capability (expressed above by the + sign for adequate or above capabilities). According to their individual mix, individuals will clearly fall into one of four quadrants on the Personnel Matrix, and appropriate actions become quite clear.

Personnel Matrix Summary

Solid personnel decisions are one of the most important management functions. They impact individual positions and the way the entire organization views the CEO.

o        Grade everyone according to capability and attitude as independent variables, then place them in the Personnel Matrix.
o        Do whatever it takes to keep “Don’t Lose ‘Em” Performers fully motivated and fully compensated. Don’t ever lose one!
o        Never trust a Mercenary. Reap the benefits while they’re there and pull the plug before they do any real damage.
o        Shift Still Valuable employees back to their ability level to create “Don’t Lose ‘Em” Performers throughout the company.
o        Fire Poisons faster than you can sign the pink slip, even if you temporarily have to do that job yourself.
o        Make these decisions rapidly. 
o        The Personnel Matrix won’t solve every personnel evaluation problem. It will impart a clarity you’ve never experienced before.

Poison

When both attitude and capabilities flash red, take on the tough decision to fire; fast like a bunny. Fire this person immediately, even if it’s a direct report and you have to do his job yourself.  Don’t make the common mistake and leave this person in place for a while, saying to yourself “Well, at least some things are getting done. Besides, I don’t have the time to do his job,” or "I haven't started a replacement search yet", or “I don’t know how to do his job,” or…. 

Believe me, it’s always better to have an opening and take the time to fill it than to have someone like this in the organization. You don’t know how much disruption they cause, how much time you’ll spend doing repairs, how many screwed-up signals get to the rest of the organization, how far off base the people he influences will be, how your image and message and values get distorted because this person represents you.

Mercenary

Think about your company in terms of a medieval society as we consider the Mercenary. This high-performance warrior is indispensable against your enemy but you never know when he’ll abandon the cause, switch sides or kill you. Yet for today’s battle, he’s critically important.

An interesting person to have in the organization; on the plus side, typically the egos and capabilities are so high you’ll get top-notch work when their attention is on the subject at hand.  He’ll dazzle customers, investors, and sometimes other employees with his skill. Don’t make the common mistake. Look out for your own interests; you owe this person nothing other than the specific compensation which they earn each day. You can’t ever fully trust him. With trust, you have a Star Performer; without trust, nothing he does can be accepted without checks and balances.  Your job is therefore much harder. Not only are you responsible for the end result, you’re also the means by which you get there. 

Treat him like a Mercenary.  Recognize his loyalties may be anywhere, but for sure are highly vested internally. He might be with you totally on the next battle; but who knows?  Double-check sources for any critical decisions or implementations; at the same time, reap the benefit of his skill.  Keep him in the job while you privately look for his replacement. 

The day the replacement is hired, fire the Mercenary without any empathy or severance other than what will fulfill your contractual obligation.  He played you, you play him.  It’s all fair.

Still Valuables

All organizations have Still-Valuables, but they’re not frequently recognized as such. He can’t do the job, she’s not carrying her own weight, he’s over-compensated, she never should have been put into this job. But she’s loyal, his heart is in the right place, she stays until the job is done, he’s honest and reliable. Don’t make the common mistake. Don’t remove them from the organization. Rather demote to a level where they can perform. Don’t lower their comp but put it on extended freeze. Convert this person to an upper left hand corner Don’t Lose ‘Em. I’ve done this to over 30 people in my career; in every single case converted someone from “I hate to go to the office, I know I’m over my head, I might get fired” to a person whistling as he or she comes to work early full of pride in their performance.  Read further.

Don't Lose 'em

If you have several upper left hand corner persons on your team, Don’t-Lose-‘em’s, do a cartwheel. Usually there are only several in a couple dozen. This is the easiest-to-deal-with category. But don’t make the common mistake. Individuals with these quality-of-character and capability characteristics are way too hard to find, so do whatever it takes to keep this person fully motivated and fully compensated before external temptations appear. The common mistake is to skimp a little on compensation, to take him for granted because “he’s loyal, he won’t leave, he’s not looking”. All that may be true, but when an outstanding external offer does materialize, because of their nature they won’t play the game of counter-offers. He’s not likely to come to you with the offer and open negotiations; that’s not his style.  The alternative consideration, providing for the family, will weigh heavily on his conscience.  He’ll be mentally gone before you know it, in a way consistent with his high character quality. And you’ll lose, more ways than seem obvious at first.

Attitudes and Capabilities

In my early management days I felt bi-polar. My thoughts about an individual would be positive on Monday but by Thursday I’d feel the exact opposite.  Yes, I had discussions with each, laid the cards on the table, gave them my point of view, had performance appraisal sessions, blah, blah, blah. I wasn’t a first-grader in appraising and handling difficult cases but I still couldn’t make a decision with which I was comfortable. 

One day, or perhaps one night in a dream, I figured out that people are not one-dimensional but two-, three-, or more-dimensional.  I decided I could only handle two dimensions; that was a big enough mental step forward.  Two broad, rough, macro categories seemed most important:

• Category 1: Is the person capable or not of doing the specific job?

or 

• Category 2: Is their attitude appropriate or not?

or

The Decision Matrix

  The personnel decisions you make, or don’t make, will make or break your organization’s performance and your career. Nothing is more important. Personnel decision-making is an acquired art not a science. Through years of trial and error experience, some good, some bad, I developed a method which makes the process much more determinative, accurate, and fast.

Human relations departments attempt making the process more "scientific" by installing grading systems and evaluation criteria, a scale of 1-5 for example.  But people aren’t linear, they’re compound and complex. Others make these decisions by gut feel. My breakthrough related to separating the two factors of attitude and capability, which create confusion when they are comingled as is always the case. They are attitude (expressed above with a heart for a good attitude) and capability (expressed above by the + sign for adequate or above capabilities). According to their individual mix individuals will clearly fall into one of four quadrants on the Personnel Matrix, and appropriate actions become quite clear.

The Personnel Matrix Summary

Probably the most important, and toughest, decisions you’ll face are regarding personnel.  Assessing is difficult.  Having the courage of conviction of your decisions is difficult.  Implementing the correct action is difficult.  This session provides a framework and guidance on making those decisions smart and fast.  Topics: The Tough Choices; The Decision Matrix; Star Performer; Mercenary; Still Valuable; Poison; The CEO’s Guide to the Personnel Matrix. To be Published 1Q07.