How do you deal with an underperforming executive?

Executives perform the most impactful and important roles in your company.  Weak executives create weak teams, which start to rot the company from the inside out.

Sometimes we have good people who we trust, but they perform at a B level. They score high on the core values but score low on productivity. These people can be difficult to deal with, and exceptionally difficult to deal with if it’s a CEO dealing with a B performer executive.

This week, Kevin Lawrence and Brad Giles share stories they’ve seen where leaders have dealt with a B player executive well, and stories where they haven’t. Through these stories, they share best practices for dealing with an underperforming executive.

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EPISODE TRANSCRIPT

Please note that this episode was transcribed using an AI application and may not be 100% grammatically correct – but it will still allow you to scan the episode for key content.

Brad Giles  00:13

Hi there, welcome to the Growth Whisperers where everything we talk about is building enduring great companies. My name is Brad Giles, and today as always joined by my co host, Kevin Lawrence from Vancouver, Canada. G’day Kevin, how are things today?

Kevin Lawrence  00:28

Awesome. Yes, it’s nice. It’s getting a little dark here. But as always, things are going well, we’re just starting to see people get fired up into the fall season, as we call it here. And there’s lots happening. People coming out of summer mode and looking for some help to sharpen up their companies as we go into the end of the year and the beginning of the new year.

Brad Giles  00:52

Very good. So let’s jump right into it. What is your word or thought of the day what might be on your mind today? As you think about that, this is something that we encourage all teams to start a meeting with just something to shake it off, get ready, get started.

Kevin Lawrence  01:14

I think it’s the value in being a jerk.

Brad Giles  01:20

That’s not what I thought you were gonna say.

Kevin Lawrence  01:24

It’s like there’s a time and place for it. I’m listening to this audiobook right now, Anthony Bourdain, it’s called medium arrives, I think, I believe it’s the last book he wrote. And you know, he’s a very well known chef wrote a book called Kitchen Confidential, almost like a critic of the chefs and not a food critic so much, but a critic of the industry and you know, he traveled around the world trying amazing foods, and unfortunately, he ended up taking his life. And in the book, he talks about his struggles with mental health and, and things like that. But, you know, there was there was times in the book where he was known to be a bit of a jerk in many different ways. And I think in many ways, he could be a good guy, and he could be a jerk. But, you know, really made me think there’s times when you really need to be strong, and almost put your foot down and not endorsing being a jerk, per se, but there’s times where you need to be strong. And some things just need to be said. And he had a whole diatribe about how there were some major things wrong in the food business, particularly. In some parts of protein processing, I’ll save it for those who want to read the book, but he just like, it’s like somebody is like, some things are just wrong. It’s not right. And you know, and sometimes you got to be a jerk about it to kind of get some attention on it and get some energy behind it. So I might change that to maybe sometimes it’s important to really take a stand and be direct, rather than a jerk. I just thought about jerk when I’m thinking about him, but we’ll keep it as sometimes it’s good to be a jerk.

Brad Giles  03:03

Okay. So for me, it’s, I got to see Jim Collins speak a few weeks ago. And it was, as always really good. But one of the things that he said that really struck me was about COVID. And he said that COVID is quite possibly the largest return on luck event that’s going to happen in our lives. So how have you capitalized on that event? He just put context, he, he says that, luck is a real thing. And great companies capitalize on luck when they get a luck event. They make the most of it.

Kevin Lawrence  03:47

And so it is research, he said, It’s not that they actually have better luck, knows good luck and bad luck. They just know how to capitalize on a luck event that sometimes can swing the other way.

Brad Giles  03:58

Yeah. And so he’s it just was a perspective that I’d never thought of, what are you doing to capitalize on that event?

Kevin Lawrence  04:11

It’s interesting is you say that Brad, because I know, during COVID, our firm, doubled in a number basically doubled in size. And I know of other boutique consulting firms, I know, one that collapse dramatically. Because they played the cards differently. They didn’t they read they read it and played it differently. We had a dramatically different approach than they did. And we had a conversation, you know, as COVID was, you know, three quarters of the way through, and I shared with them things they’re like, what? Oh, because they were expecting me to say that our business was down and it was far from that.

Brad Giles  04:47

And you know, what is funny drawing on what you just said? He also said that there are people throughout the pandemic who doubled down they were like, Whoa, this is a whole All new situation, we’re going to work really, really hard and get into it and get stuff done. And they were like, they worked harder than they’ve ever worked. And then opposite. There were people who are like, I gotta catch up on my Netflix. But his point was, find the people who worked the hardest, and really dug down and singled them out and promote them, like, these are the future leaders of your business. And I thought that was really good, because they’re the ones that are taking responsibility in critical situations.

Kevin Lawrence  05:43

They’re the people who step up in tough times, those the ones you want to go to war with. And it was kind of like the War of COVID.  So in today’s show, we’re talking about how to deal with an underperforming executive, now, it could be an executive or a senior leader, anyone, but we’re looking at, you know, more in the board room. And it kind of the key thing here is that these executives are critical roles in our company, they set the tone for a lot of things and making sure things get done. And you know, we executives generally create weak or weak performing teams, which starts to rot their company from the inside out, it all starts to fall apart. And even though it’s one part of the division, that can get really weak, and it can suck the whole company down.

Brad Giles  06:31

So let’s just frame it this way. Maybe you would like to go out and have a beer with them or have dinner with them? Like, yeah, you’d love to hang out.

Kevin Lawrence  06:42

I got I got a list of those people, I’d love to go for a beer with, I just wouldn’t want to have them working in any of my clients.

Brad Giles  06:49

Yeah. And, and, like you liked their company, and they’re good to hang around. But each time you get the data, like, they’re just not consistently creating the numbers that they need to. And it’s this horrible feeling that you get, it’s like, why can I just get them to do what it says on the job scorecard? Where are they just do their job? Well, they just did a job, like they seem like a good person. So this is what we might call B players.

Kevin Lawrence  07:21

Yeah, you love them. They fit the culture, but they consistently don’t perform that well. You need to step down a little bit out of your role to manage them, follow up with them, support them. They are just not, you know, an incredible performer that you can always count on. But they’re really nice, and they’re trusted. And that’s why we often hang on to them. There’s two categories of underperforming companies normally hang on to B players, we love them. And we’re loyal to them, but they’re mediocre. The other category is toxic A players that are high performing, but they are jerks, taking into account the word I used up front. And so these B players can clog up a system because they just they, they generally don’t help to create amazing outcomes in the business, even though we like them and love them. And you know, in the years of doing this, those are the hardest ones, we’ve had to let many of them go. And however, we’ve also had to demote a bunch of them and get or give them notably less responsibility, which can be a great solution. It’s just really hard to deal with. And generally, most of the CEOs we work with, they normally up until we come on just kind of let it roll. And there’s bigger, bigger fish to fry in our mind. And unfortunately, it creates a lot of secondary and third, third tier issues.

Brad Giles  08:43

Because we have a responsibility to create the results. And yes, we have a duty as leadership positions to help people to get the results. But some people don’t know they’re either not going to get there or they’re slow to get there. It takes them too much time to get there.

Kevin Lawrence  09:02

And maybe there’s a lot of other factors, you know, they could be in the wrong job, they could have the wrong manager, they don’t might not even know. So we’ll dig into some answers some good examples. But to start with, we’ve got other episodes that you can listen to that would relate to some of these principles. You know, number 71 is about how to use SMART goals with your team to have you know, clear accountability 72 and 73 about how the best leaders create team accountability. So setting up accountability, and we’ll touch on some highlights of that today. And then number 123 is Seven valuable ways to help develop middle managers because, you know, there’s many different versions of what could fix this. Also in my book, Your Oxygen Mask First chapter 10 Make yourself useless, which is about building a strong team that delivers better results than you do without you. And Brad and your book.

Brad Giles  10:00

So it’s about the five roles of a CEO called Made to Thrive. And the first chapter is there is accountability for all employees and suppliers and the five things that you need to do to ensure that you can get that. So there’s some good resources there maybe, like this start off with an example, is the sales manager, I started working with a team. And the sales manager had a sales team, I don’t know, maybe 20 or 30 people in the sales team. And it was a lovely guy, quite entertaining as salespeople often are, which is a great trait, I love it. But, you know, he just didn’t drive the results. So he had a part time, he was kind of, I guess, late 40s, early 50s. And he had a part time hobby, which was real estate. So a lot of his energy would go into his real estate portfolio. Now, that was a, you know he didn’t have hundreds of properties. But you know, I think he had a few, and they kept him busy. And that was really where his passion lied. And so oftentimes, we would be wondering, where is he or certainly the CEO would tell me that they were wondering, you know, like, he popped out, and then he had to go and, you know, fix a leaking tap, or there was something else that he’d find out about, but he’s really, you know, he’s got this team of salespeople who could be great. And they weren’t. And so we had several conversations about that. And we continued to drive the accountability that we need. And this person, you know, I don’t know if he couldn’t or didn’t want to, but the, you know, the elephant in the room was really that this person had a real estate hobby. That was their passion. And they didn’t really want to be part of a scaling company. They wanted to be just in a job that would pay enough that they could do the other things. We subsequently we increased the accountability over time across the whole business. He didn’t love that he ended up resigning. And then we brought in an amazing a player. And subsequently, we saw the revenues in the business. Yeah, look, it took six months or something. But it really took off.

Kevin Lawrence  12:29

So in that case, when you actually created the accountability that probably should have been there in the first place. Yeah. He said, Hmm, I’m not really signed up to do this full time job thing with all these accountability, so I’ll go somewhere else?

Brad Giles  12:41

Yeah, pretty much.

Kevin Lawrence  12:44

Yeah, I’ve had lots I had a similar one with a sales manager at a different scenario. But the sales manager was dramatically underperforming. The CEO wanted to fire him from everything I heard about the guy was like, What are we doing? One of my team went in and did a bit of an assessment with this gentleman, the head of sales it was and started coaching him because we wanted to try and give them a chance. They were loyal to him, he had some shares in the company, and it was, you know, well, what my team member found is, the person actually didn’t know how to be a sales manager. He got given the job because he had the gift of the gab. He was a technician. And then he was running a sales team. So he wasn’t I don’t think working as hard as he could have. But he actually did not know what to do at all. There was no structure, no accountability, and no even system for him to run. He was lost, just purely lost. So the member of my team got in there, started getting him to have plans, goals, thinking about the team thinking about visiting customers cetera, all of a sudden, his performance started to get better and better and better. So it was tightening up the accountability. But it was also in this case, he needed help he needed capability to be able to do it. So that was a, you know, a different but as a success story. And another similar one we had, and I had of the finance function in a company that I work with. And the person in the role was awesome, like, great to chat with personable, but they were consistently failing on what they were doing. Yeah. So you know, and when we do strat planning sessions, we break out the KPIs and the goals by executive and they came to a meeting and everything was right, a second meeting in a row, everything was red. And we happen to do a 360 at that time, too. And then the CEO was able to have a conversation and I was probably a little bit and saying, Look, we think you’re awesome. We really do want you on the team. But you can see based on the results in the meeting In, this isn’t going to work. So you have a choice that you can step up, and I want you to, or I’m gonna have to make a change because I can’t, like the stuffs got to get done. And from everything I knew, in that situation, if I had to make my best guess my best guess would be, they wouldn’t have made it. That person stepped up and isn’t a player these days, you know, they might have days where they’re an A minus, but they’ve done an incredible job. And but because it was, the system was so clear, and the CEO had the real conversation with them. And they found a way to pull up their socks, like it was absolutely inspiring, and absolutely, just freaking awesome.

Brad Giles  15:54

Yeah, so many times, people get promoted, because they’re a good technician, as you kind of indicated there. And technician could be in any role, right? They’re doing a good job, they get a promotion. But do they really want to do that new job, give me the more give me the higher pay. But do they really want to do that new job and take the responsibility often for holding other people who used to be their teammates accountable. And, and sometimes that can be a bit of a problem, I think about one team that I work with, we’ve got a, we’ve got a person was kind of promoted from supervisor to manage, you know, lovely guy, just, you know, the kind of guy again, that you’d love to go and have a beer with. And he was a great participant in our leadership team workshops. But he went through a journey, where he realized he just didn’t want to do the job. And I tell you what, I was so proud of this guy. Because he, he took it in such a humble, he didn’t take it. No, he came to the conclusion. And I stress tested it with him. And I was like, Look, are you sure? Because you know that that that this pay rate is different to that pay? Right? Are you sure? And he kind of said, I know that I know what that other job delivers. And I don’t want to do that other job. Like the higher the senior role. I want to stick at the supervisory level. It’s, it’s, you know, it’s what I do, but I haven’t been able to make those numbers. So. So that was a, I think, an unusual, unfortunate circumstance that was probably mostly to do with that company’s strong culture. But you know, so often, it’s hard, it’s hard, we get an executive that isn’t making the numbers. And, and they use their, you know, their friendship, their personality, everything to just continue to do that.

Kevin Lawrence  18:08

Yeah. So last one I’ll share it was one of the Middle East I worked with where it was a director or a VP, I think under an SVP, but the second level of leadership, and I’ve worked with this guy for about a decade, I knew this guy very well liked him. And I knew he was challenged. But there was a new leader running that division. And the new leader after a year or so wanted to get rid of the guy and said, This guy’s no good. He’s gotta go. And I’m like, this is a long time. This is a company that’s loyal to people always wants to make sure people try to, you know, treat it right. But it kind of came not out of the blue. But the leader was so strong and passionate about firing this person very quickly. It just didn’t feel right, and want to ask them what the issues were. And he explained them. And I was kind of an advocate for doing the right things in that company. So long story short, when I asked the executive explain it, it wasn’t clear. I had a meeting because of something else. I had a meeting with that person and I’m the executive. And I had the executive articulate what needed to happen. And he wasn’t clear at all. I asked the executive to write out what needed to happen. And he wasn’t clear, long story short, even though it looked, you know, the executive made a clear case, I wasn’t convinced because there was some history there. But what I ended up needing to do because the executive couldn’t make a clear case of what the person had to do. He was just more frustrated. And so I had the executive make a list of five specific things that this guy needed to do to keep his job. The three of us had a meeting. The truth is, we had questions about the executive at this point, we weren’t even sure about him. That’s why I was involved. So the executive and his employee. Yeah. And because the executive was no, we’re still checking. Long story short, we made the list, all three of us aligned around the list. And I said to the, to the director, hey, you’re crystal clear on what you got to do. Great. So when I was back there the next quarter, because I went every quarter to meet with them. For other things, I just had a quick meeting with these guys said, Okay, let’s talk about how we did. And we went through the list and the director had achieved about 40, or 50% of things on the list. And I said to the director, well, you know, you put your executive in a very tough position here, you were given a chance and clearly told what you needed to do. And you didn’t do it. Yeah. So this is between the two of you. But I said, was this crystal clear? Yes. Did you have the resources? Yes. I said, what happened and he sort of, you know, made up a story, but because it was so darn clear that he basically fired himself. And that’s, it is, and it’s as fair and humane as possible, it bothers me greatly. If people get fired out of the blue, now, there’s certain things that it might need to be. But if you haven’t articulated the situation, and giving people chances, it’s like they should fire themselves, even though they’ll still react and be shocked or whatever. But they shouldn’t be firing themselves because they choose not to do what needs to get done in that job.

Brad Giles  21:30

But I’m going to raise a big red flag at this point. Because and, and this is to do with something that we’ve spoken about a few times recently, which is the window versus the mirror, all of the examples that we’ve provided, have been looking out the window rather than in the mirror. And so what that means is, looking out the window is a Jim Collins phrase, which means when something happens, we look out the window to blame other people, rather than looking in the mirror and saying, Okay, what am I done to create this? underperforming situation? Yep, I’ve got a case that occurred recently, where we’d launched in another country, we’d sent a senior executive over to that other country. And they were underperforming. And I took a call with the CEO. And they were like, look, I think that I need to, should I bring this person back to Australia, and recalibrate them, get them in a different position so that we can kind of start from scratch. And I was like, Okay, if we do that, there’s a pretty good chance they’re going to quit, you know, I know, this person is a high performer. And I said, Well, before we do that, let’s just explore a completely alternate opportunity, which is looking in the mirror. And so how clearly have you communicated this problem to this individual? And, and he said, Well, we haven’t probably had a one on one for three months. And I was away and the other person was away, not bread, but the CEO was away, the other person was away, we just really haven’t connected, okay.

Kevin Lawrence  23:19

And then awesome often happens also, in situations where they don’t want to have to talk about this stuff, they avoid talking to each other. Whether that’s what happened in that case, it becomes like, I don’t want to have to talk to them. I don’t want to have to deal with.

Brad Giles  23:32

Yeah, that was starting to have that sign. And I was like, Okay, so that’s one thing. Do they understand? Are they given the support? Or have they been sent to this new country? Where to start up a new office? And they don’t feel like they’ve got the support from you? Or the executive team? Do they feel like they’re an island or part of our culture? Long story short, I, we went through that, and he was like, Oh, my God, I’ve been looking at this the complete, wrong way. Oh, that’s awesome. And I said, metaphorically, why don’t you put your arm around this individual? Okay, and say, look, I think that, that we’ve really let you down about A, B, C, D, E, F, G, all of these items. And we actually that worked, turn that situation around. And yeah, and the point was, that this person was poor. Their numbers weren’t there. Okay. But there was things that were structurally occurring that was meaning that this person thought, I’m not part of the executive team. They don’t value me and they’re kind of stepping out. So it’s just a red flag don’t say how to deal with an executive that’s underperforming and only look out the window. Also look in the mirror.

Kevin Lawrence  24:49

That’s good, because if they’re not performing, and that’s why I think it’s our job because have we made ourselves clear most of it. What I’d say is we need to isolate ourselves. As the variable that is the problem, right that that’s, they basically remove ourselves from the equation because often the man that the manager doesn’t do enough, because they’re fed up, and they’ve almost resident resigned to the fact that they’re not going to make it in their mind. And that’s not fair. So there’s a few basics that we always make sure you pick them up in the stories. One, are their crystal clear expectations that get reported on regularly, ideally, at least monthly for all of them, for sure, quarterly. And that’s, you know, there’s financial targets, they have to hit for their team, there’s KPIs that tell the health of the their operations, and then there’s goals or rocks or priorities, whatever you call them that they need to achieve. But those three specific accountabilities are there on a regular basis being reviewed, other goals got to be smart, they got to be aligned to the strategy, they got to be smart. So you can measure it and tell if people are performing. And they can tell them performing. And I think the ideal is, they should be able to self manage, because their objectives are so clear in most companies. It’s is clear as mud. So the managers often and again, when we go into companies with a first things we do is get goals for everybody in the room. Because then we can start to see who’s who in the zoo, because I’ve been conned by charming people in those rooms before. Remember a guy that was head of marketing, the most loved guy in the whole company by everyone? He didn’t get anything done. The man could he tell a story and it was great to go for beers with. But you know, once we started having clear accountabilities, it was clear, and he ended up having to get fired because he couldn’t get things done. So basically, the basics Clear, clear accountabilities goes back to the book, The One Minute Manager, make sure the goals are clear. And if they don’t achieve their goals, go back and double check. They’re clear. And if they were, then go back and give feedback and get them to reset it and try again. Yeah, um, the monthly reporting I talked about, and then you got to take time to think about this yourself. Like, what, like, you talked about Brad, and you got to think, what is my role in this? What can I do? How can I support them better. And at the end of the day, once you go through that, if it’s still not working, then you probably need to, quote write them up. Yeah. And putting stuff like a formally putting stuff in writing saying this isn’t working. And a lot of companies have what they call a pip a performance improvement plan, but there’s a notice, you’re failing to achieve your objectives, this is detrimental to your ability to maintain your job. And then come up with an action plan, like I explained with the guy, that we had the meeting to outline the goals what he needed to achieve. So when we get people to this, I, if someone’s gonna get fired, I often will ask to see the document. And normally, they’re so damn vague, like the example I shared with you. It’s like no, it needs to be needs to work on your improve your behavior. Well, that’s not a SMART goal that says, you know, that’s a mile wide.

Brad Giles  28:17

But there needs to be a line in the sand, like a number 99 is red. 100 is green, like a really distinct delineated difference between success and failure. And to your point, when we do performance reviews, we advocate that people have the manager write a person’s performance on a KPI or priority or whatever it is red, amber green, but then separately, the individual rate their performance are green, because they’re talking about the Delta. Well, why did you rate yourself green there? When I wrote a red?

Kevin Lawrence  28:55

We do the same when we do 360s, we get their perception. And that’s why when we have executive reporting sessions and stress sessions, we get them to self report how they think they did all often ask, how would you rate your performance on a scale of zero to 10? This quarter to everyone individually? And then what are you going to do to take it up a notch? Yeah. And then if the CEO disagrees, they can jump in. So point of it is you need to at some point, you need to start taking formal action, I strongly recommend involving HR when you do that. So they help you to do it, right. They don’t do it for you. And sometimes you invite HR to the meeting, which increases the seriousness of it or maybe you invite the CEO to the meeting, if appropriate. And then finally, it’s like, okay, how do you help them? Like if you’ve identified a gap and something and are willing and you’re willing to invest in them? What are the resources that don’t just tell them to work harder? What is the course? Who is going to mentor them? How are you going to teach them better? Who are they going to learn from? Are you going to get them a coach or You know, it’s important stuff. Again, none of this stuff is rocket science. It’s really, to kind of summarize all of this stuff. If you’ve got an executive who’s underperforming, you need to be able to ensure that they’re having clear expectations to perform to, and that they understand under clear, smart, tangible expectations. They need to have a conversation with them, say, hey, there’s a gap between what you’re doing and what we’re expecting. And then somehow, you need to follow up on it to ideally see improvement, or see it fade. And if it doesn’t improve, you need to do something different. Maybe you change their job, maybe you split their job. Or maybe you ask them to the point there.

Brad Giles  30:45

You outline the expectations, they take the responsibility, and then it’s on them whether they step up, or step out, and you’ve got to be okay, because that’s what the company needs.

Kevin Lawrence  31:00

Yes. And if it doesn’t work out, it’s a base. No, at the end of the day, it’s like, if it’s not working, it’s almost like they fire themselves. And they are the ones who have chosen not to do it. And worst case scenario, by the way, if it isn’t going to work, how do you allow them to exit gracefully? How do you allow them and give them time to find another job ideally, or to take us quote, take a sabbatical, but you also don’t kind of be a jerk about it now, if they’re stealing from you, or abusing your employees or customers? Sure, you know, walk them out in handcuffs if needed, if that’s appropriate. But otherwise, we’ll look at your guilty in this too, you might have been the person that hired them, or didn’t mentor them enough? Or maybe you promoted them when you shouldn’t have like, everyone’s got a role in this. How do you treat them respectfully and with as much dignity as you can, if at all possible if it comes down to the least desirable outcome?

Brad Giles  32:02

Awesome, what a good episode we’ve had here again, how to deal with an executive that is underperforming. And ultimately it comes down to you’ve got to be able to outline the expectations, make it clear to them and make the consequence clear to them, as we’ve said, so you can find this podcast on YouTube search for the growth Whisperer is obviously where you can find it. Also, where as you probably have, where all good podcasts are found, you can find Kevin, his firm Lawrence and Co. At Lawrence and co.com, you can find myself at evolution partners.com.au And both of us have, I’d say pretty interesting newsletters that we put out every week.

Kevin Lawrence  32:50

We like to think so.

Brad Giles  32:53

So hopefully you’ve enjoyed the episode, and we look forward to chatting to you again next week. Do have yourselves a good week.