By Ken Keller
Longevity in a company is not loyalty. Employee loyalty often manifests by showing up for a paycheck, for as long as possible, doing as little as required to stay employed.
This is about how loyalty can become a liability and what the CEO needs to do to implement change.
Companies often have individuals in key roles not meeting expectations. The pandemic has put these people in the spotlight and maybe into the crosshairs.
I ask about underperforming direct reports in my Strategic Advisory Board meetings, and each CEO instantly sees a face, or faces.
When asked why “Mike” (my made-up name for this exercise) is on the payroll, the CEO always begins with “I really like Mike, but …”
In my confidential one–on–one coaching sessions, I respond with, “Let’s remove the word ‘like’ and focus only on the business performance of the individual.”
Freed of the anchor of affection, the CEO launches into a tirade, a verbal presentation of facts and opinions, of all the things Mike has failed at or is not doing for the job he is being paid to do.
I always end by asking, “Why is Mike still on the payroll?”
This is the question the CEO fears. They already know the answer but don’t want to say it out loud — even to their business coach.
The answer is the CEO is afraid of having difficult conversations. The CEO wants to be a nice person; to be liked and hates having to discipline people or terminate them.
Why are conversations with Mike so critical? The longer the problem lingers, the more likely it is to impact the personal health of the CEO. In addition to physical and mental stress, dwelling on Mike eats up both energy and head space, a drain on thinking time that could be used for more strategic issues.
But the CEO isn’t the only one Mike impacts. Employees, vendors, suppliers, strategic partners, clients and prospects, all wonder when the CEO is going to deal with Mike.
Mike’s under performance, his messes, his trail of woe, is the 100% on the CEO.
No one can be a good employee without clear and measurable goals. Otherwise, the company becomes a place where people are paid regularly but spend the day doing what they believe is important.
Imagine having people on the payroll doing things all day long that are 180 degrees counter to what the CEO wants. It’s maddening!
Good employees want to know what is expected; they want to be measured against results. Being challenged and rewarded is at the top of their list to stay engaged. They want their boss to inspect their work, give them feedback and give them an opportunity to improve.
Underperforming employees expect to stay on the payroll because the CEO likes them. That’s wonderful except every underperforming employee is a direct hit to cash flow and profits. I estimate an average employee costs a business a minimum of $100,000 annually but Mike’s impact might well be 2 to 4 times that figure.
Is it time to confront reality? It is probably overdue. If you don’t want to have those challenging conversations, contact me and I’ll either coach you to do it or I’ll do it with you. If nothing changes, you can only blame yourself.
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.
Email:[email protected]. Keller’s column reflects his own views and not necessarily those of the SCVBJ.