Issue 19 (emailed version), Monday March 19, 2001
Made in New Zealand - twice winners of the America's Cup

An email magazine dedicated to making you a better leader, by providing:
— provocative thinking about what it means to be a leader
— the tools, techniques and best-practices that drive leadership improvement

"Thought is action in rehearsal"
Sigmund Freud

"Hard work pays off in the future. Laziness pays off now"
Stephen Wright

With thanks to David A Weiman

In this issue
WarmUp
Ten Minute MasterClass – Hiring and Firing: When to let people go ToolBox – Termination time
Self Improvement – trusting your gut

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WarmUp® — HR Serendipity
My old Mother used to say 'it never rains but it pours' – usually when half a dozen things had all turned to custard.
It happens in this office too often to be pure coincidence. In comes an inquiry about, say, quality in education. Within hours there's a newsletter, a couple of discussion-list posts and another email, all on the same subject. Serendipity. Or maybe a benefit of effective networking. Whatever, it happens all the time, and this week it's leadership and human resource management.
Perhaps it's not surprising. With the longest ever US stock market bull run now officially dead (Fortune, this week). Suddenly it's not recruitment that preoccupies the ether – it's 'letting people go'.

Ten Minute MasterClass – Hiring and Firing: When to let people go

In a Fortune Web exclusive – Hiring and Firing: When to Let People Go – Geoff Smart says “keeping 'C' players on your team isn't fair to the top performers”.
Having an "A team" is not just about hiring stars, he says. It is also about doing the toughest thing in business: removing people. "It is not disloyal to remove somebody who is not performing in their job," Jamie Dimon, CEO of Bank One, once told a gathering at the Executives Club of Chicago. "It is disloyal to everybody else in the company to not do so."
In an ideal world, you would not have to fire anybody. But if you are a business owner, investor or manager, you will inevitably find that there are people working for you who should not be in their jobs – Smart's "C players."
When someone is not meeting your standards, you owe it to him — as well as your customers, employees, shareholders, and yourself — to do something about it. According to Smart, one of the most common regrets that his consultancy hears from managers as they reflect on their careers is, 'I just tried to do the best with the cards I was dealt' or that they covered for their C players.
Wrong approach. Star leaders do not leave C players in place. They evaluate their team, remove non-performers, and hire A players.
Or. Maybe not. An alternative that may cost a lot less is to communicate clear goals and expectations, coach the C player on how to succeed, and measure his or her performance. Have the tough talk early. Say, "You are not meeting the minimum expectations for this role. Let's see what we can do to improve your results over the next two months. I am here to help you. But if you are not making it at the end of two months, you will have to go." Then have progress checks every two weeks, orally and in writing.
After eight weeks of knowing that they are under-performing, many C players will gracefully leave on their own, Smart says (you can tell he's a consultant, can't you!?). Otherwise, you might redeploy a C player into a role in which she will be successful. That could mean narrowing or changing her responsibilities. But make sure she can really be an A player in the new role.
Morale does not go down when you remove a C player. It goes up. In fact, you might be surprised to find the remaining employees actually praising you for removing a person who may have been disrespectful toward others, disorganized, undependable, damaging to customer satisfaction, or a culprit of some other behavior that undermines the value of your company.
Ninety percent of managers wait too long to fire people. They therefore do not make space to hire great people. I have found that the best one percent of managers makes about five times the hiring/firing decisions of other managers. Err on the side of implementing too many changes rather than too few in your attempt to build an A team.

Geoff Smart is president of G.H. Smart & Company, a Chicago-based consultancy that uses its expertise in human behavior to help investors and senior managers create value. E-mail him at Fortune@ghsmart.com.

ToolBox – Termination time
 Source, with thanks, David A. Weiman.

Firing an employee is one of the most difficult tasks that leaders face. And the potential problems created by terminations are substantial, from high turnover costs to lengthy vacancies to lawsuits filed by disgruntled ex-employees and morale problems among the remaining staff.
Before you reach the point of having to fire an employee, make sure you've assessed why they are not meeting your expectations. Be aware of the employment laws that apply to your business in your state. And consult with your attorney to make sure you've documented and addressed your concerns appropriately.
If you feel you have no other choice than terminating the staff member, follow these guidelines:

1. Be prepared
Make sure you've reviewed the termination process with an attorney well versed in employment law. Be clear with the employee about the reasons for the termination. Rehearse what you're going to say. Anticipate questions the person may have and practice your answers. The better prepared you are, the easier the process will be for both of you. You will also want to prepare for announcing the termination to your staff. This should be handled smoothly, as the rest of the employees will assume that this is how their termination will eventually be announced.

2. Be compassionate
Even if you're furious at the person you're firing, the termination meeting should be conducted calmly and professionally. Being fired may make the employee feel rejected, worthless, embarrassed and guilty. There's no need to make it worse than it already is. Also, employees may be more likely to sue you if they're angry at the way they were treated in the termination meeting.

3. Be clear
If you did a good job of providing the employee with feedback all along, the firing should come as no surprise, but that doesn't mean that they will be thinking clearly during the termination meeting. Don't assume the person knows exactly why they're being fired: review the reasons so there's no confusion.

4. Be future-oriented
Employees who are being fired, even when they know it's coming, often try to deal with hurt feelings by asking many questions about various issues that led up to the termination. Similar to getting over a failed relationship, moving on is part of the process that will help them feel better. To orient the person toward the future, offer post-termination employment counseling, help with a resume or reference letter, or other services that will help the terminated employee transition to his or her next job.

5. Be careful
For your own legal protection, conduct termination meetings with a witness, such as someone else in a leadership or human resources position in your firm. If you're concerned that the employee has the potential for becoming angry or violent, contact your local police or a private security consultant for suggestions on handling the meeting.

No matter how much you prepare and feel justified for firing an employee who's not meeting your expectations, terminating someone often has emotional consequences for the leader, as well as the employee.
Self improvement - trusting your gut
Also with thanks for his contribution to David A Weiman

If you're like many leaders, you may do some of your best business thinking when you're not thinking about business. Perhaps the answer to a tricky problem arrives while you're taking a shower in the morning. Or a choice that's eluded you for days suddenly becomes clear while you're on the golf course. And once you arrive at a solution, you tend to trust it, even if it's hard to describe exactly how you got there.
It's called gut instinct, and an article in the February Harvard Business Review attempted to uncover what exactly is at work in our minds when we make decisions based on those subtle processes described by words like intuition and hunch.
You might be surprised to learn that executives routinely rely on their intuition to solve difficult problems when lists of pros and cons don't seem to work. In fact, it appears that the higher up someone is on the corporate ladder, the more they'll need to rely on their intuition to make critical decisions. Why? Because by the time most business proposals have been handed up to the decision maker, very smart people have usually prepared the data and analyzed the different possible outcomes already. That means that the executive-level decision maker has to go beyond the information being presented to decide intuitively which choice to make.
So what is the intuitive process that allows business leaders to make major decisions? It's seems to be fueled by two related phenomenon.
First, your mind is capable of receiving and processing information outside your conscious awareness. For example, information that protects you from physical harm is usually transmitted directly to the parts of the brain that control motor activity. That's why you jerk your hand away from a hot stove before seeming to consciously realize that you touched the burner. Also, studies have shown that data presented to subjects below the threshold of conscious awareness has the ability to affect future choices the subject makes. That means that you have absorbed information about your business that you did not necessarily intend to learn. And that data, along with all of your conscious thoughts, becomes available to you for decision-making purposes.
Second, data that you collect both consciously and unconsciously can be processed quickly and in a seeming endless number of ways by the brain. While this process is not completely understood, it is clear that when decision-makers are presented with data, the brain sets to work trying to identify patterns in the huge number of discrete memories and facts that reside in your head. When this process yields a result, you have the "a-ha" experience - your conscious recognition of that sub-conscious connection.
Gut instincts, then, are the product of all of the experiences that reside in your mind, and the connections you're capable of making among those experiences from which patterns - and the answers to many questions - emerge. So should you trust your instincts or not? Before answering that, it's important to consider some potential decision-making pitfalls, pointed out in the article:
1 some people will take unnecessary risks to recover a loss, also known as the gambler's syndrome.
2 we may see patterns where none exist. Also, we have a tendency to recall when we didn't trust our instincts but should have, forgetting when we were lucky to have disregarded our gut instinct.
3 there's the insidious self-fulfilling prophecy, compelling us to make sure that someone we backed for a promotion actually succeeds, justifying our original decision and blurring whether or not the choice was in fact a good one.
To protect yourself against making unwise decisions, consider these important steps:
1 Check to confirm if your judgments are correct. Follow up on your decisions to confirm the results.
2 Make sure you examine the bad decisions as well as the good ones.
3 Look at the entire decision-making process, not just the final choice.
4 Focus on the moods, emotions and drives that you're experiencing during the decision making process.
5 Consult with trusted friends or associates, particularly when you're uneasy about a decision.
Even if you employ these checks, there are some people who gravitate towards fact-based decisions rather than relying on intuition. If you're the databased type, you may rarely trust your gut, or you may view gut feelings as irrelevant data in the decision making process. It's probably best to stay with your preferred method of decision-making.
Next issue Thursday, April 5th/6th, 2001 - reader contributions warmly received
Copyright © 2001, Macpherson Publishing All rights reserved
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Written and edited by Malcolm Macpherson
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