A client approached me about helping him get his company ready to sell.
He was getting up in the years, and figured he had between three and five years left before his passion would be gone. He had built a good size manufacturing company.
I created a plan making sure that all the bases were covered, so that when he walked out the door, the business could run without him.
He had another priority which he repeated to me many times: “Let’s be sure and take care of the best people.”
He asked me to work with the production manager, finance director, human resources director and the head of sales and marketing. These four made up his leadership team.
We were going to focus on people, processes and profits.
My belief was that you had to trim the tree so it could grow deeper roots and yield more fruit, so we started with the people side first.
We conducted candid evaluations of everyone (not exactly a 360 process but close to it) and placed people into one of three groups.
The first group consisted of individuals that were deemed essential for future company success. These were the “A” players.
The second group consisted of employees who were good contributors but needed education, training and individual coaching to make stronger contributions to future company success. These were our “B” players.
There were some in this group that wouldn’t make the three year timeframe we had in mind but we felt we owed them the opportunity to improve.
The final group of “C” players and below included all manner of malcontents. These included people who thought they’d be on the payroll forever because of their last name or marriage. There were some stray dogs (friends of the family, unqualified neighbors and people who had been hired because they were good looking but couldn’t do anything else but look good), and a few who were simply unproductive, lazy and entitled.
Because we wanted to treat all employees with dignity and respect, we did our best to keep and retain the “A” and “B” players while we dealt with the third group.
The third group got eliminated over the course of a month.
It probably would have been less painful to those having to have the difficult conversations to do a mass termination, but we took our time because we wanted to send a message that we were doing things right for the future of the company.
We did two terminations each morning and let go two more employees each afternoon.
That’s a lot of firings. It was amazing how highly productive people got once word got out that people were being let go.
People would show up at work not knowing if that day was going to be their last day. It was one heck of a motivator.
But several unintended consequences came out of this exercise, despite the pain.
We escaped the trap of overworking and under-appreciating the best employees. Up to this time, the major reward for being an “A” player was (surprise!) even more work.
So we no longer assigned “A” players the more difficult and unglamorous assignments because they were the only people we could depend on to do them. We gave these tasks to “B” players as growth opportunities.
Second, we took those with the most ability, with the most enthusiasm and with the most passion, our “A” players, and gave them critical, challenging projects that would determine the future of the company.
Third, the company’s recruiting efforts became a lot easier. The “A” players became the best headhunters the company could have ever had, and word of mouth brought in many fine candidates.
The company’s former image as a place that rewarded laziness and limited ambition vanished, replaced with a reputation as a company where great employees were wanted and rewarded.
“Good enough simply isn’t acceptable here anymore” became the mantra of this company, and it can be the mantra you might want to consider adopting if you want a better business.
Ken Keller is an executive coach who works with small and midsize B2B company owners, CEOs and entrepreneurs. He facilitates formal top executive peer groups for business expansion, including revenue growth, improved internal efficiencies, and greater profitability. Please contact him at Ken.Keller@StrategicAdvisoryBoards.com. Keller’s column reflects his own views and not necessarily those of this media outlet.