Early on in my career, I was asked to take over a regional service company with over 280 technicians and operating in 4 states. Having worked for another company in the same ownership portfolio, I was very familiar with the business I was tasked to take over and even assisted them with some management development stuff along the way.
Standing in the owner’s kitchen, I was offered the position and before I could even censor myself, I blurted out,
“I don’t really have the resume for this but I will work my ass off to make it work. And… I’m probably going to fire all of your managers…”
Not unlike other small businesses that grew quickly, the company had taken its high performers from front line positions and promoted them into management. Truthfully, this can work but it takes a special kind of talent to make this transition. They didn’t have many special talents.
The company was facing their first possibility of losing money in the business despite being busier than they had ever been. Productivity, quality and employee retention were all down dramatically.
True to my word and over the next two years, I did work my ass off and I did fire almost all of the office managers. Some were incompetent, some were bullying their staff and some were even stealing. Firing people sucks- except the one that was bullying his staff. I still reflect on that being the only time I’ve fired someone and actually enjoyed doing it. He was a jerk and he was treating our people like garbage.
I didn’t issue pink slips from a corporate office on a Monday- administratively eliminating all the managers in one big sweep. We took some time to understand each circumstance which either confirmed or disputed our belief in each manager’s ability to drive the business forward. We talked to their techs, their warehouse managers, their office managers and even the people in central operations about how each of them was performing. Pretty soon, we didn’t need to ask the questions- people were coming to us with feedback and suggestions.
We also changed the pay from a seniority model to a performance tier system, retrained techs, replaced the fired managers with a mix of internal and external folks, bought new equipment and tools, developed professional operating practices and even added a middle tier of management to push the transition. There was much more but listing it all is tedious reading and tangential.
The company turned the corner over an 18 month period driving up productivity almost 50%, reducing turnover 60%, opening two new offices, growing to over 400 technicians and adding almost 30% more revenue. The best part was the profitability was higher than ever.
As a business grows in size, complexity or depth, you will have people who can make the transition and those who can’t. Can you development them? Are they worth developing? Do they embrace and promote your company’s culture?
I have seen where companies don’t ask these questions because they are afraid of the answer- they have folks that can’t or won’t take the next steps with them. You know the symptoms of those decisions; people are shuffled around into different positions without increasing responsibilities, new hires and installed around them to fill gaps in ability and even creating positions for people that are unnecessary or redundant.
Making these decisions comes with sleepless nights and repeated moral compass calibrations but not making these hard choices can cost you your profit margin or worse.