Right Attitudes

Ideas for Impact

Hiring & Firing

Are Layoffs Your Best Strategy Now?

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Are Layoffs Your Best Strategy? We’re in a demand slump; if you think downsizing will cut costs and shore up the bottom line, consider the unexpected consequences of layoffs.

Hefty severance pay, outplacement services, and other direct costs can add up quickly, and indirect costs can be substantial. E.g., losing experienced employees can precipitate lasting damage to your business. The direct costs can wipe out any short-term financial benefit if new hard-to-find employees are to be hired and trained within six to twelve months when the downtrend stops.

Then there’s the trap of believing that things will get better soon and downsizing the smallest number of people in anticipation of a quick turnaround. And when that expected miracle doesn’t materialize, you’ll wind up making successive cuts. That’s awful for the morale of the employees spared. The best employees won’t feel indebted to soldier on and may start casting around for new offers terrified that they will be among the next to be cut.

Idea for Impact: Layoffs may not be the best strategy for grappling with hard times. Examine not just the cost of labor, but also the value created by labor. Consider the trade-offs and try furloughs, pay cuts, job sharing, and scaled-down hours instead, depending on when you foresee business rebounding. You’ll spread the pain of the downturn more broadly, keep talented employees, earn loyalty, and better position your company for recovery.

Wondering what to read next?

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  3. Lessons from Peter Drucker: Quit What You Suck At
  4. Fire Fast—It’s Heartless to Hang on to Bad Employees
  5. General Electric’s Jack Welch Identifies Four Types of Managers

Why You May Be Overlooking Your Best Talent

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Affinity Bias - Overlooking Your Best Talent Many organizations have a hard time articulating their culture. They can’t explain what they mean when they evoke the phrase “culture fit.” Sometimes it’s just an excuse to engage employees better whom managers feel they can personally relate.

Affinity bias is a common tendency to evaluate people like us more positively than others. This bias often affects who gets hired, promoted, or picked for job opportunities. Employees who look like those already in leadership roles are more likely to be recognized for career development, resulting in a lack of representation in senior positions.

This affinity for people who are like ourselves is hard-wired into our brains. Outlawing bias is doomed to fail.

Idea for Impact: If you want to avoid missing your top talent, become conscious of implicit biases. Don’t overlook any preference for like-minded people.

For any role, create a profile that encompasses which combination of hard and soft skills will matter for the role and on the team. Determine what matters and focus on the traits and skills you need.

Wondering what to read next?

  1. The Unlikely Barrier to True Diversity
  2. The Duplicity of Corporate Diversity Initiatives
  3. Can’t Ban Political Talk at Work
  4. Tokenism Isn’t Inclusion
  5. Stop Stigmatizing All Cultural ‘Appropriation’

What To Do If Your New Hire Is Underperforming

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What To Do If Your New Hire Is Underperforming If a recent hire, particularly one brought into the team with high expectations, isn’t delivering, start by asking the following two questions:

  1. Is the employee in an environment that allows her to perform at her best?
  2. Are you clear on what her personal objectives are?

Only after answering both these questions with a ‘yes’ can you move to consider coaching, reassess the employee’s suitability, and examine if you need to terminate the bad hire quickly and cut your losses.

Idea for Impact: Nothing puts wind beneath a manager’s wings more quickly than asking these two questions when dealing with employee underperformance. Ask, don’t guess, how you can accommodate each employee’s strengths and needs and create an environment that works best for each individual.

There’s no one-size-fits-all answer to creating a positive culture, empowering employees, and tackling performance problems. Each employee faces individual challenges and has her own goals and preferences.

Wondering what to read next?

  1. Fire Fast—It’s Heartless to Hang on to Bad Employees
  2. General Electric’s Jack Welch Identifies Four Types of Managers
  3. Seven Real Reasons Employees Disengage and Leave
  4. How to Manage Overqualified Employees
  5. Four Telltale Signs of an Unhappy Employee

Never Hire a Warm Body

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Warm Body Syndrome: Never Hire a Warm Body

If you have a position open and you’re having a hard time filling it, don’t compromise and hire a warm body. Certainly not to fill an open spot within a specific time frame so as to not risk losing your team’s headcount.

Alas, many warm-body hires do not last very long. So, until you have a candidate who fully meets the job’s requirements, don’t fill the position.

Rather than jumping at every job seeker to cross your path, be methodical and follow a clear and consistent approach.

Take your time during the hiring process. Needing to fill the position yesterday is not an excuse for shortchanging the process.

Idea for Impact: Don’t hire quickly and, thus, poorly because you need a warm body. You and your team are better off working overtime than cleaning up the messes generated by someone who didn’t meet your requirements fully.

Hire wisely; nothing is more important.

Wondering what to read next?

  1. How to Hire People Who Are Smarter Than You Are
  2. General Electric’s Jack Welch Identifies Four Types of Managers
  3. How to Manage Overqualified Employees
  4. Competency Modeling: How to Hire and Promote the Best
  5. Don’t Lead a Dysfunctional Team

The Unlikely Barrier to True Diversity

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Corporate Culture---Barrier to True Diversity

As much as companies like to tout diversity, the definitive rule of getting ahead at work is to be likable—to follow the unwritten set of norms and adhere to your company’s culture. That is, you must fit and mix well with the rest of the “gang.”

As I’ve written before, likeability is a significant predictor of success. Well-liked people, especially those who work well with others, will advance. Those who aren’t very likable don’t usually get as far. If your company is conservative, you should be conservative. If the leadership is aggressive, snappy, and rule-bending, be the same. It’s better to be “one of them” to progress your career and endear yourself to your colleagues and higher-ups.

Every grouping of people, whatever the institution, community, or population, has an unwritten set of norms. It’s true for nations, in social groups, sports teams, and businesses. Wherever people form a group, they organically form rules. They institutionalize ways of doing things, traditions, and unquestioned assumptions. Such norms give the group a sense of identity. It’s natural. It’s tribe mentality. We, humans, are social creatures, and this is how we foster a sense of belonging.

Affinity Bias

Per affinity bias, human nature is such that people instinctively associate other people with labels, relate, and play favorites. Groups establish the norms and embrace and propagate them. The resulting categorization not only resists differences but also initiates prejudice and favoritism.

In professional settings, most workplaces tend to hire similar people and encourage them to think and work in the same way. I’ve previously written,

Even if nearly all corporate mission statements extol the virtues of “valuing differences,” managers stifle individuality down in the trenches. They are less willing to be receptive to different viewpoints. They seek to mold their employees to conform to the existing culture of the workplace and to comply with the existing ways of doing things. Compliant, acquiescent employees who look the part are promoted in preference to exceptional, questioning employees who bring truly different perspectives to the table. The nail that sticks its head up indeed gets hammered down.

Defining, fostering, and defending a corporate culture often becomes an exercise in clarifying ‘this is who we are’ and ‘this is who we are not.’ It engenders a strong norm, which builds an even more significant incentive to get people to think alike, get on, and tolerate or repel incompatible people.

Idea for Impact: Culture is a Barrier to Diversity and Inclusion

Culture is the unlikely—if unintentional—barrier to true diversity. Culture has a pernicious effect on hiring. It gives people ample reason to favor and engage who they believe to be “the right people.”

Wondering what to read next?

  1. The Duplicity of Corporate Diversity Initiatives
  2. Why You May Be Overlooking Your Best Talent
  3. Tokenism Isn’t Inclusion
  4. Don’t Manage with Fear
  5. How to Avoid Magical Thinking

Don’t Surround Yourself with People Like Yourself

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Don't Surround Yourself with People Like Yourself It’s easier to hire people you naturally feel comfortable with, and you’ll feel most comfortable with people who remind you of yourself and your in-group. This is instinctive—it’s part of what psychologists identify as implicit bias.

However, clone-hiring initiates groupthink. There’s much value in surrounding yourself with others who are not like you—people who may make you feel a little uncomfortable and bring a different perspective. As the Bay-Area career coach Marty Nemko cautions, “We find comfort among those who agree with us, growth among those who don’t.”

To build a team with diverse talents, look for people with complementary skills and agreeable temperaments. As I explained in my article on competency modeling, identify the traits, characteristics, and behaviors in the star performers on your team and not in the average performers. Then, hire and promote people who have demonstrated the distinct traits and behaviors of the star performers.

Idea for Impact: Don’t try to hire clones. Instead, look for people who’re a complement. You need people less like you and more of a complement to you. Compatibility is not about being similar in nature; it’s about co-existing and thriving in harmony.

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  3. Making Tough Decisions with Scant Data
  4. Cancel Culture has a Condescension Problem
  5. Stop Stigmatizing All Cultural ‘Appropriation’

How to Manage Overqualified Employees

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How to Manage Overqualified Employees Some employees are overeducated and overqualified—or think they are—for the jobs they are doing.

Such employees will find their roles not demanding enough to keep them occupied. They may not feel fully engaged in those tasks and responsibilities that they judge “beneath” them.

Toffee-nosed employees can create team tension. They can develop negative attitudes, such as a sense of entitlement about their skills (remember the FedEx “Even an MBA Can Do It” advert?) or resentment through boredom. That frustration and disillusion can ripple out and bring everyone else in the team down.

Here are two guidelines for managing overqualified employees:

  1. To keep overqualified employees engaged, allow more autonomy, and assign them more creative assignments. Delegate longer-term projects or have them collaborate with other teams within the company. Though, be mindful that this may create even more resentment in the team towards the perceived overqualified employees. Discuss with the team why some people have been chosen for those special assignments.
  2. Work together with the human resources staff and help the overqualified employees chart out individualized paths for climbing the corporate ladder and reach their potential. Find ways to help them acquire new skills and get exposure to other parts of the organization. Coach them to apply for roles that possibly do not yet warrant their experience and expertise. Expand their leadership capacity by assigning training and mentoring responsibilities.

Idea for Impact: Nurturing and keeping overqualified employees can create a strong foundation for tomorrow’s management team.

Wondering what to read next?

  1. Fire Fast—It’s Heartless to Hang on to Bad Employees
  2. General Electric’s Jack Welch Identifies Four Types of Managers
  3. Seven Real Reasons Employees Disengage and Leave
  4. Don’t Push Employees to Change
  5. To Inspire, Pay Attention to People: The Hawthorne Effect

Executive Compensation: Pay Them Well, But Not Too Well

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Our executive compensation system is broken. Surveys show that the average public company CEO compensation is many hundred times that of the average employee. This gaping disparity in pay vis-à-vis the relative value they bring to their organizations is a moral embarrassment to our society, a point that wasn’t lost on the Occupy movement of yesteryear.

The debate over executive pay won’t die away anytime soon. As election year approaches, grandstanding politicians are vying to outdo each other with pledges to implement pubic policies that limit executive compensation, whereas theorists argue that, in a market economy, compensations should be set by supply and demand for executive talent.

Disproportionate executive compensation can demotivate employees The latter position is commonly echoed by company boards and executive compensation consultants—both of whom owe their cushy jobs to the CEOs and their top teams. They assert that leaders need to be provided with personal incentives to attract and motivate them.

Strangely enough, such incentives often demotivate the leaders’ followers. Financial incentives that are directed disproportionately to the leader in isolation often prove downright counterproductive.

Leadership is an outcome of the relationship between leader and follower, and excessively compensated leaders do not engender followership effectively.

This comports with financier J. P. Morgan’s observations at the start of the twentieth century that the only characteristic common to his failing clients was a tendency to overpay those at the top. As Peter Drucker commented in The Frontiers of Management (1986,)

[J. P. Morgan found] eighty years ago that the only thing the businesses that were clients of J. P. Morgan & Co. and did poorly had in common was that each company’s top executive was paid more than 130 percent of the compensation of the people in the next echelon and these, in turn, more than 130 percent of the compensation of the people in the echelon just below them, and so on down the line. Very high salaries at the top, concluded Morgan—who was hardly contemptuous of big money or an “anticapitalist”—disrupt the team. They make even high-ranking people in the company see their own top management as adversaries rather than as colleagues…. And that quenches any willingness to say “we” and to exert oneself except in one’s own immediate self-interest.

Idea for Impact: Employees’ efforts are devalued markedly under conditions of gross inequality. Pay leaders well (if you pay peanuts, you’ll get monkeys,) but not too well.

Wondering what to read next?

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  3. To Inspire, Pay Attention to People: The Hawthorne Effect
  4. Seven Real Reasons Employees Disengage and Leave
  5. Don’t Push Employees to Change

Fire Fast—It’s Heartless to Hang on to Bad Employees

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Firing is About an Underlying Commitment to Retaining Great People

The former General Electric leader Jack Welch earned the moniker “Neutron Jack” for sacking some 100,000 employees in the early years of his tenure as chief executive. Welch defended the dismissals by emphasizing that it would have been far more heartless to keep those employees and lay them off later when they had little chance of reinventing their careers. The dismissals were part of his deliberate efforts to establish a corporate culture that emphasized honest feedback and where only the “A players” got to stay.

Many Fired Employees Feel Surprised That the Axe Didn’t Fall Sooner

Fire Fast---It's Heartless to Hang on to Bad Employees Managers know that ending a bad fit sooner is better than doing it later. Firing a bad employee is often better for both the employee leaving and the employees remaining.

Then again, many managers hesitate because firing is awfully difficult. No one likes to fire people. Looking an employee straight in the eye and telling he’ll no longer have a job is one of the harshest things a manager will ever have to do.

Besides, some managers are so uncomfortable with conflict that they are unwilling to deal directly and honestly with a problem employee, not to mention of confronting the risk of a wrongful termination claim.

If an Employee is Not Working out for You, Fire Fast

By holding on to a bad employee, you are really doing a disservice to the employee. Forcing a person to be something he’s are not, and giving him the same corrective feedback—week after week and quarter after quarter—is neither sustainable nor considerate. Trying to keep the employee in the wrong role prevents his personal and professional evolution.

  • Give the employee a chance to turn the situation around—people can change.
  • Try to find him an appropriate role within your company. Recall the old Zen poem,

    Faults and delusions
    Are not to be got rid of
    Just blindly.
    Look at the astringent persimmons!
    They turn into the sweet dried ones.

    However, if the employee is a truly bad fit, reassigning him just shifts the problem to a different part of the company.

  • If your efforts to remediate a bad employee haven’t worked out, cut your losses and fire him promptly. Help the employee move on to a job or a company where the fit is much better.

Idea for Impact: It is much worse to retain someone who is not suited for his job than it is to fire him. Help him find a new role quickly and land on his feet.

Wondering what to read next?

  1. General Electric’s Jack Welch Identifies Four Types of Managers
  2. How to Manage Overqualified Employees
  3. What To Do If Your New Hire Is Underperforming
  4. Seven Real Reasons Employees Disengage and Leave
  5. How to Promote Employees

How to Hire People Who Are Smarter Than You Are

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Apple’s Steve Jobs frequently pointed to the risk of a “bozo explosion,” which is what happens within a company that makes the mistake of hiring B-grade managers early on. As the company expands, these bozos—Jobs’s label for well-meaning, but less-competent managers—tend to emerge through the ranks and run important divisions of the company.

When bozos hire other people, they prefer to hire bozos. As entrepreneur (and bonafide Steve Jobs’s coattail-rider) Guy Kawasaki explains, “B players hire C players so they can feel superior to them, and C players hire D players.” Lo and behold, entire divisions are soon swarming with hordes of bozos.

How to Prevent a Bozo Explosion

How to Prevent a Bozo Explosion

The heuristic “hire people smarter than you” is obvious enough, but, every so often, smart people can be a terrible fit within your team.

In this Startup School 2013 interview with venture capitalist Paul Graham, Facebook’s Mark Zuckerberg offers a better heuristic to hiring and keeping smart people who aren’t jerks and can get things done:

What’s the right heuristic for determining if someone is really good? Over time, what I figured out was that the only actual way to let someone analyze whether someone was really good was if they would work for that person. I don’t think that needs to recurse too many levels down in the organization but I basically think that’s a really good heuristic. I believe that. If you look at my management team today if we were in an alternate universe and I hadn’t started the company it would be an honor to work for any of these people. I think if you build a company that has those kind of values, rather than just saying ‘oh I want to hire the best person I can find’ or whatever, if you hold yourself to that standard then I think you’ll build a pretty strong company.

Idea for Impact: Mediocre managers often feel threatened by employees who seem more intelligent than they are, and could potentially pinch their jobs. In contrast, a wise manager knows that she reveals well on her own ability to discover and nurture talent.

  • As with advertising tycoon David Ogilvy’s Russian nesting dolls metaphor for building “a company of giants,” insist that managers hire folks who are better than themselves. For example, a product manager should hire a designer who is better at design than the manager is, not worse.
  • Insist that each interviewer ask themselves of job candidates, “Would I want to work for this person?”
  • Remember, the best don’t come cheap.

Wondering what to read next?

  1. Fire Fast—It’s Heartless to Hang on to Bad Employees
  2. Never Hire a Warm Body
  3. General Electric’s Jack Welch Identifies Four Types of Managers
  4. How to Manage Overqualified Employees
  5. David Ogilvy on Russian Nesting Dolls and Building a Company of Giants