Awake at 2 o'clock?

A client found himself in an unenviable position. The cancer of negativity had spread through his management team. He knew the sources, and was prepared to clean house. Where should he start?

First, some background. The company was a bootstrap start-up founded by an inexperienced young owner that grew rapidly for almost ten years. Without a mentor or much experience, he relied on his intelligence and work ethic to figure out problems as they arose. Most of the original management team, chiefly the owner’s acquaintances from local businesses and personal contacts, had reached their limits of competence about halfway through the expansion curve. With considerable personal angst, he replaced those who couldn’t keep up with new “professionals” experienced in specific areas of operations.

I put professionals in quotes, because although they had experience, their recruitment came with a price. A low price. It was typically a lot more than their predecessors earned, but it still wasn’t near the top of the market. When you are struggling with personnel who have no training for the job, folks who know even a little bit seem like a big step up.

As the business continued to grow, these new managers increased staff and lowered expectations. They quoted their own experience as authoritative. Deadlines just “couldn’t” be met. It was never the right time for new initiatives. They began criticizing the owner behind his back, telling coworkers that his lack of business knowledge had led him to set standards that were unrealistic.

Eventually their criticism became a widespread culture around the headquarters of feeling overworked, underpaid, underappreciated and stuck in an organization that offered little future. Despite their attitudes, the owner’s personal drive kept the company growing.

Finally, the owner made a couple of key hires at competitive salaries. His eyes were opened by the ease with which these new players did their jobs. It turned out that his expectations weren’t unrealistic, he just didn’t have the right people on the bus. He knew that reaching the next level required some wholesale changes in his core staff, but where to begin?

If he replaced an underperforming manager, he would saddle the new hire with an unresponsive staff. If he replaced multiple managers (three in total) in a brief time, he risked completely unraveling any coordination (poor as it was) between departments. Piecemeal replacement carried the danger that new hires would be corrupted by the bad culture before he could finish the replacement cycle.

He debated how to begin. Should he start with the most rotten apples; those who seemed to be the center of dissatisfaction? Should he start with the least competent performers? Should he start by changing out a whole department? That way, he could focus his attention on getting one part of the business running correctly, them move on to another.

Sometimes radical change is called for. Let’s not be smug about how he got into the situation. We’ve all kept mediocre performers because it was just to inconvenient to replace them, or at least right now. When you are growing rapidly and fighting fires, it is easy to let two, or three , or even more of those poor performers linger.

In the end, a hybrid approach got him through the change. In one department he replaced the manager, moved two employees to different areas of the company (for which they were better suited), and let the new manager hire a strong assistant. That was complete turnover in the department, but the repositioned employees were still available for some guidance and corporate knowledge.

In a second, he let the manager go and outsourced the function, hiring a lower level person to coordinate with the vendor. In a third,  he hired a strong second in command, outsourced a major labor-intensive function, and then reduced staff, letting the malcontents (including the manager) go.

The planning was extensive, but he managed a complete turnover of almost all staff functions in a month of activity that resulted in happier employees, a much improved culture, and better quality of work.

It wasn’t not easy, but when was running a small business easy?