Fly in the ointment
I recently promoted someone to be my 2IC. He's a charismatic salesman and pulls in the numbers. I had so much faith in him that he's now in a profit-share arrangement, and he's wrapped up in a bunch of other agreements. But while he used to seem quite normal and rational, I've realized he's a mild psychopath and fairly aggressive. The staff can't stand him and I've had to pay out a couple of them after they walked out and threatened legal action. He creates a lot of discontent and staff turnover is high. Do I get rid of him – which is going to be an expensive exercise – and save the staff but sacrifice the numbers, or accept the high turnover rate and keep him on?
– Crossroads, Auckland
It’s great you’ve recognised that there’s a problem, as far too many people have seen a promotion of an individual that seems to defy belief, while the continued presence of people as you describe your salesman can ruin a company or division. I would move quickly to give him feedback, get him out of the current role and ensure he is part of the solution.
The first is to have a proper performance conversation with him, and preparation is critical. Use a structured feedback approach to walk through examples of his behaviour, talking about its effect on you and the staff, get his feedback and then agree with him on a plan to change. At the beginning of the session, hand him a letter showing all of this, and walk him through it. Listen to his concerns and feedback when you go through the examples, and seek to understand if there is anything else happening inside or outside the company that impacts on his behaviour. Be firm - the feedback is genuine, the need to change is high and the action plan is a mandate, not an option. It’s a chance for him to absorb some very serious feedback and moderate his behaviour before it is too late, and to deliver on a plan for improving everyone’s lives. If the situation is beyond recovery, then consult an HR legal specialist before the meeting to make sure you get the legal side of the process right.
Part of that plan needs to include an action that gives him a respite from managing and interacting with staff. The rest of the firm needs to see you deliver them from the poisonousness of this chap, and they want action quickly. Move him aside to a special assignment where he has no staff. Call him what you like (chief sales officer?) but fix the rest of the company, and smartly.
Once he’s out you can start to bring him back in, making him part of the solution again. Help him succeed by giving him constructive feedback, helping him focus on what he is great at and avoiding what he is lousy at. The 2IC role can take a backseat while he focuses on delivering the topline result. You may also want to tweak his incentive plan to include staff turnover as a KPI.
If his behaviour doesn’t change, and if it’s going beyond internal to external behaviour, then your company is at a crossroads. Is he giving the right vibe to clients? Is he representing the company correctly and ethically? If this is true and his behaviour now is unchangeable then you’ll need to accept the initially lower returns from losing his sales ability, but retain the overall business in return. It’s pretty obvious to me that despite the super sales aside, you don’t want to run a business where nobody wants to work.
In that case you will need to biff him off the profit share and other contracts. That may mean legal advice, but then you did seek legal advice before you granted those benefits, didn’t you? If not, then next time do so, and make sure you have the ability to take away rights if working with the person turns out to be untenable. If you’re stuck with a legal obligation, get rid of him regardless, negotiating an expensive yet decisive exit. Your family, staff and business are greater than one person, and if e really wants to take you to the cleaners then he’d better leave the country, as it’s a small one, and a smaller industry.
Am I a sellout?
I own a small marketing business that's doing well. I've been in the game for about six years, it's hard work and I'm getting disillusioned. I've heard of the head of a big company looking to acquire some of the little guys. Should I sell out while the going's good, considering how I feel, or should I keep trucking along? And if so any advice on how to get over this feeling of being disillusioned and find some sort of new motivation?
– Tired, Hamilton
Whether you should sell comes down to two pieces of information: what’s your price and how much will you enjoy being part of a larger company? Your price should reflect the loss of not just the income, but also the loss of autonomy, and make sure you seek advice from someone that knows how to value the business before you decide. It also pays to quietly shop around now and then, perhaps getting a few of the big companies to give indicative prices.
If the bigger companies are offering silly money due to a short-term boom, then it might be smart to take it, work out the bondage period and then either stick around or start another business in a year or two. That could be pretty mercenary, but if it means that you and your family will have financial security, then it could be worthwhile.
But you will also need to really understand just how life will be in a big company. Talk to people that were in your situation in the past - how did they manage? What did they do? Some may have sold, and others who stayed in their business may have expanded, shrunk or even failed.
Which brings us back to motivation. Perhaps it is time to stake stock. Why are you in business? It is just to make money, or is there a wider customer cause? If you can, working with your team, agree on a wider customer cause, especially one that genuinely benefits society, then aligning the business around that has to be motivational. Alternatively perhaps some in your team have aspirations beyond yours? Perhaps it’s time for you to step aside a little and move into the founder yet not in charge role, and let the younger, more aggressive folks take your company somewhere bigger. While it’s great to build your own business, it can be even better to help others build an even better business, especially when you are the majority owner.
But keep questioning and keep listening. Speak to your family, your peers and ponder about business and life. Perhaps a nice long break would help in the process – I recommend lengthy trips on motorcycles for quiet contemplation.
Does the nice guy ever win? I'm starting to suspect I'm not cutthroat enough when it comes to business, but I don't know if I can live with being a bastard.
– Unpolitical, Wellington
Let’s assume that you do want to be a nice guy, and that you also want to work with nice people. Nobody really wants to work or hang out with people that are not nice, and it’s perfectly acceptable to refuse to do business with bastards.
So while there are plenty of ways to "succeed" in business by stepping on other people, why would you want to? There is no point rising to the top to find you are disliked – and you’ll find it doubly lonely when you eventually move on. So please, for the sake of all of your friends, family, colleagues and waitresses, please be the nice guy that wins.
This doesn't mean that you can’t be tough, so long as you are fair. You should be unafraid of firing people who continue to underperform, despite repeated coaching. You can also be firm with your customer list, firing those customers that take up too much energy, are painful to work with and produce little or negative profit. You can hold the line on prices, invoicing terms and on contracts, as these the basics drive business success. You can help your colleagues be nice guys as well, by calling them out if they indulge in unethical behaviour, or by modeling behaviour for them through your own nice-guy approach to work. It is eminently possible to do these things and to be a good person, and we can lean on our over-developed Kiwi notion of fairness to help.
You can refuse, when you find out, to do business with scoundrels. Any whiff of corruption should be regarded as not only a strong signal of a poorly run business, but a loud warning to stay away. That may be a reason I've stayed out of certain industries, and a contributing factor as to why I don't own a house.
So if you are in it for the money or the power then please just bugger off overseas and work in finance. If you want to grow or help grow a fantastic business, working alongside great people with a sense of purpose, then please stick around. There are plenty of like-minded folk here that would gladly work with you. And if you find yourself in a company that rewards bastard operators, get out as quickly as possible before you become one of them. Nothing is more important than your own integrity.