How Does A Holding Company Make Money

The 1 Person Who Is Holding Your Company Back

If you want to have a high-growth company, you need to address it.

Almost every small- to midsize company has this person. The really nice, average producer who "covers themselves." They are a terrific corporate citizen, participate in the non-job-description responsibilities and do what they are asked. But why are they average?

Covering their cost isn't why they were hired. If you took that approach with every employee, your company wouldn't grow or achieve. To have a high-growth company, you need people who push. Nice, high-achievers do exist. It may take a little time to work through it, but they are out there.

While the issue may seem like it's about this one employee (Why don't they push harder? Why don't they learn a new skill?), it's really about your entire company. Every employee who works with this person views them as the bar. Their presence turns your company into a group that believes mediocre results are OK. It's OK to come up short--if you're nice.

What's wrong with having a company of nice people? Nothing. It's a great thing to have. However, when you take the defensive stance over a mediocre performer, you're exacerbating the problem.

So, how do you fix it?

Make your managers stack-rank their teams in three different ways. A) Who they like. B) Who is best at their job today. C) Who has the most potential over the next 12 months.
Work with your HR leader to set up: A) Documented performance improvement plans (PIPs) for people who show up at the bottom of 1B and 1C. B) Weekly or bimonthly one-on-one meetings between managers and staff. C) Expectations of what is acceptable (average!) and what is excellent performance.

If people are average, they should know it. Employees will think they are doing well unless they are told their execution is subpar.

It's not easy to have poor-performing, nice people. You may have started your company or become a leader because you had been treated badly at your last company. You want to attract nice people and keep them. I get it. Holding people accountable doesn't mean you're not nice.

And at the end of the day, how nice is someone who could be more productive if they worked harder or learned more, but who choose not to because they knew mediocrity would be tolerated?

Oh yes, and to make it work, you have to fire the mean employees who are highly productive. Stay tuned on how to do that.

Sep 30, 2019