I published my third book, “The Meeting” last November. This is an excerpt from the book and one of my favorite chapters. The setting is a one-day peer group meeting. Bud is the group Chair and Tex is one of his group members. The group is in Executive Session when members bring strategic issues/decisions to the group for help.
I hope you enjoy the story.
“He’s a Terrorist”
“The best thing you can do for a good employee is to fire a bad one.”
– Bob Thomson, Vistage Speaker
“Tex, you’re batting lead-off today in the Executive Session. You made mention earlier in our check-in about having a terrorist on your management team. Tell us more about that,” said Bud.
Tex’s facial expression quickly changed from a broad smile on his face to a look of disgust. He had brought this same issue to the group once before several years ago and had hoped that he wouldn’t have to bring it back again. It was a sore subject for Tex and one that had gotten progressively worse over the past year.
“You all remember my CFO David. He was originally hired by my dad many years ago before I graduated from Tech and joined the company. He didn’t have CFO credentials at the time and certainly is not showing them now. The faster we grow, the less engaged he is in the company. He seems to be taking time off at the least opportune times like the end of the month closing. His financial reports are late and full of mistakes. And frankly, I just don’t think he gives a sh**!”
Bud interrupted Tex for a moment. “I think before we go any further, this is a good time to review the Welch Grid as Tex has referenced the ‘terrorist’ on his team.”
The Welch Grid is believed to have originated with CEO Jack Welch at General Electric in 1991. Welch and his leadership team were looking for a more effective way of evaluating their talent. They decided that the two most important factors to consider were the employee’s effectiveness (job performance) and their alignment to company values (employee behavior).
Bud Irvine approached the flip chart in the front of the room, grabbed a marker, and drew a big square with four quadrants inside of it. He labeled the horizontal axis of the square “job performance” and the vertical axis “behavior”.
“Tony, upper right hand quadrant. Above average job performance and above average behavior. What do we call this person?” asked Bud.
“That’s me Bud.” responded Tony Barnett with a big grin. “That’s a superstar.”
“I agree with both statements,” said Bud.
“We may have to take that up as a separate issue,” called out Will Kross with a sly look on his face. “More of a part-time superstar given his vacation schedule lately.”
“Okay Will, how about the bottom right hand quadrant. Above average performance and below average behavior” asked Bud.
“That’s a terrorist, Bud,” said Will quickly. “Not me by the way”.
“Right answer, sir, on both counts” replied Bud. “Lacey, you’re next. Upper left hand quadrant. We have below average job performance and above average behavior. What is our term for these team members?”
“I know this one because I have more than my share of them. These are ‘cheerleaders,’’ recalled Lacey. “Fun people with great attitudes. But they are not getting the job done.”
“Dave, last quadrant. Bottom left. Below average performance and bad behavior. What do we have here?”
“Bud, I am proud to say that I have rid myself entirely of these guys. This is ‘deadwood’. Our last group discussion on this convinced me to fire the last two,” responded Dave Borden. “And the interesting part? They both landed in much better jobs after I cut them loose. It was a win-win.”
“Everybody clear on the Welch Grid before we move forward with Tex’s issue?” Bud asked of the group.
Phil Balmer’s hand jumped up. “Bud, please remind me how we arrive at these designations? Is it just a gut feeling?”
“Phil, in many cases it is just a gut feeling as we evaluate an employee’s job performance and on the job behavior. However, we are far better off having good metrics to drive these determinations. Performance metrics along the horizontal axis and engagement and behavioral metrics on vertical axis. My experience is that most companies have the performance metrics and do not have the behavioral numbers.”
The group took the next ten minutes to ask Tex clarifying questions. They included inquiries about the CFO’s job responsibilities, his relationships with his peers, his job status, and compensation package.
“Tex, where would you put your CFO on the Welch Grid?”asked Cliff Junningham.
“Well, for sure lately he has not been doing his job. Our financial reports have been late and filled with mistakes. He blames others, but the responsibility is his to provide me with timely and accurate financials.”
“How about a number from 1-10 on job performance, Tex?” asked Cliff.
“It’s a four at best. He’s good working with our investors. He’s a schmoozer there. The banks run hot and cold on him. I had one banker last month tell me he thought David was ‘full of sh**’. He tried to renegotiate a loan package with mostly fictitious numbers. The banker was pissed.”
Cliff spoke up again. “How about a number on his behavior? Is he aligned with the company’s core values? Does he play nicely with everyone?”
Tex responded practically before Cliff could finish his last sentence. “That’s a two at best. I have people coming to me every day complaining about his attitude and rudeness. He’s aloof. Too good for the rest of us. Never a kind word for anyone. A real SOB.”
Trace Webster perked up from the other side of the room and spoke up. “Tex, I heard you call this guy a ‘terrorist’, but based on what you’ve shared with us he sounds more like ‘deadwood’. Bottom left quadrant. Why is he still there?”
“Well, until you all got me thinking about this I did think of him as a terrorist. But you’re right, he’s ‘deadwood’ in the Welch Grid. He’s been with us so long and he has the title of CFO, it’s just hard to think of him as ‘deadwood’”, Tex explained to the group.
Bud jumped into the conversation to help move it forward. “Tex, now that we have established his position in the Welch Grid, what do you see as your options moving forward?”
“Bud, I remember the speaker we had last year on this Welch Grid, and he identified four possible options. The first and most popular option is to do nothing. I can’t afford to do that. I’ve been putting up with this too long as it is.”
Tex continued. “The second option, if I remember correctly, is to isolate the ‘terrorist’. Move him out. I am not sure I can isolate David any more than he has already done on his own. He is already on an island so to speak. He has flexible work hours. He comes into the office sparingly. If I isolate him any further, it will only continue to impact his job performance.”
“The third option is coaching. I’m done talking to him. My dad speaks to him on occasion but I know he’s not willing to coach or mentor him. A friend of mine suggested maybe an executive coach for him, but I’m not sure that would work, nor do I want to spend that type of money on him. I also know that coaching for a ‘terrorist’ rarely works. He’s not going to change his behavior with or without a coach.”
‘What’s your fourth option Tex?” asked Bud.
“Cut him loose. Fire him,” responded Tex loudly.
“What’s preventing you from doing that?”asked Dominique sitting next to Tex. “Has he got pictures of you in a compromising way?”
Tex smiled at the thought of David holding him hostage in some way.
“Remember the speaker we had earlier this year that talked about the ‘J Curves’?” Tex asked the group.
“I am looking at one big ‘J Curve’ if I fire David. He knows where all the skeletons are hidden. He developed all of our financial systems. He has key relationships with our investors, bankers, and many vendors. It would take us ninety or more days and probably cost us low six figures to fire David.”
“What are you fearful of Tex?” asked Theresa Mulsey in a soft voice.
“Three things. I am fearful of what this will cost the company. We’re running on very tight margins right now as it is. I am also fearful that I will not be able to find another CFO for this job. Lastly, I am fearful that I’m wrong. Maybe he’s not the problem.”
The room got very quiet.
Breaking the uncomfortable silence, Bud posed one of his favorite questions. “Tex, if you brought in a hired gun to run the company. Top-notch, a no ‘bs’ executive. What would that person do in this situation?”
“I hate that question Bud,” complained Tex. “He would fire him right away. It’s a no-brainer.”
“Tex, if your CFO came marching into your office this afternoon and tendered his resignation, would you accept it?” asked Theresa Mulsey sitting right across from her friend.
“In a heartbeat, Teresa. That’s a no-brainer.” responded Tex.
Dominick Patrick raised her hand next. “Knowing what you know about your CFO, if he left for a year and came back; would you rehire him?”
“Not a chance, Dominick. He has burned way too many bridges.”
Tex then paused for what seemed like an eternity but was actually about fifteen seconds. His eyes took one slow lap around the room and then he stood up.
“That’s it. I will terminate David before the end of the week. I owe it to my investors and more importantly to my people. Keeping a ‘terrorist’ makes me a ‘terrorist’ and that’s not my calling. He’s gone.”
Once again, the room got very quiet before one by one each member stood and applauded.