When Life Gets Tough
Part Three: Let's Stop Wasting Money!
By Adam Radzik
Consultant to Professional Firms

In a difficult economic environment with less revenue, companies are forced to take a second look and a third look at all their expenses. Having done turnaround work for several years in the past, I am often asked for my advice on this challenging subject.

One of the biggest expenditures companies have is labor costs, and whereas in the past mediocre or even poor performance was tolerated, it needs to stop and it needs to stop right away. Weak employees are causing companies to hemorrhage by virtue of their own negative impact on the effectiveness of the organization (for the watch to work, every single piece must do its part successfully), and also because they have a bad effect on everyone else's productivity. Attitude is contagious, so a poor performer infects the organization with mediocrity, a lack of accountability, and a loss of respect for management that obviously accepts and will tolerate inferior performance. The impact of having even one mediocre employee is at least a $100,000 loss to the company.

A client who is going through a rough time recently said to me, "Adam, we can't afford to keep anybody who isn't at least a B player." Isn't he right?

Haven't we all kept weak employees who have not been pulling their weight? Can we afford to continue to do that? Can we afford to wait another 30, 60 or 120 days to get rid of them?

One of the ways to assist in this process is to take a careful look at previous annual evaluations to determine who the weak players are.

Another methodology is to fire everybody in the company on Friday, and then schedule interviews for their positions on Monday. See how many people you would actually rehire if you had it to do all over again. You’'d need to consult with an employment attorney to see if this would be permitted. Even if you didn't actually do it but did it just as a fictitious exercise as if you were going to do it, it would yield powerful realizations about whom you would rehire and whom you wouldn't.

I don't wish to be hard hearted, but management must function with the survival of the whole company in mind, not the survival of individuals who have been performing poorly all along.

I know it is difficult to fire long- term employees, employees with families and employees who depend on the company for their livelihood. On the other hand, I point out to management that if the company has 100 employees, chances are the company is supporting them, their spouses, their children and maybe an aging parent. That is almost 500 people… a whole village is being supported by that business. The whole village cannot be allowed to perish because mediocre or poor performers are draining the life blood out of the business. I impress upon management the concept that the saving of the village is a noble and sacred duty that will require leadership and the performance of unhappy tasks. But it must be done!

The eulogy of many a failed business reads, "Sadly, the company did too little, too late." Make sure that your company is not one that can be so described.

Comedy Corner - An Announcement

To all my email friends who in 2008 sent me best "wishes," "chain letters," "angel" letters or other promises of good luck if I forwarded something,

NONE OF THAT WORKED!

For 2009, could you please just send money, Jack Daniels, chocolate, movie or gasoline vouchers, and airline tickets instead?

Thank you!