Why toxic employees can harm your remodeling business

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My daughter smiles more than anyone I know, tries hard, listens and is a kind soul. To build on these qualities and to have some fun, we signed her up for her first foray into team sports with soccer a couple months ago. Above all, we hope that it will be fun for her and introduces her to being on a team, life lessons about hard work and a level of coordination that I missed out on as a youth.

Since the first practice, one child stands out. In scrimmages, his talent and results are evident. He deftly dribbles, kicks and defends. He is fast, competitive and focused. In the first scrimmage, he scored about 90 percent of the goals; coach switched him to the losing team halfway through. In practice, however, he stands out for his lack of discipline. In dribbling drills, he's kicking the ball 20 yards. He's scoring goals while the coach is giving instruction. He isn't friendly.

We have people like that on our team: toxic employees. Not many but a few. They are highly talented in their narrow window, enabling them to consistently achieve quantifiable results. But toxic employees typically do not follow our processes and, as a result, can be very disruptive to the team. We are in a battle to achieve results, and these heavy hitters help get us there. But we are also in a battle to achieve other goals — team unity, future growth, brand equity — and the same people can eat away at the foundation of this vision. These toxic employees pose our leadership team with one of its toughest challenges.

My compass for this and any other difficult challenge is what is important in the short-, medium- and long-terms. There are three primary goals of a business for its shareholders and owners:

1. Income: This is all about maximizing net profit/owners compensation. Many business people assume this is the only goal for business, and their cultures reflect that belief. In such a business, a toxic employee will typically thrive and will be further enabled as long as they are hitting quantifiable milestones.
2. Lifestyle: You need a level of compensation that will enable your pursuit of hobbies and lifestyle, but you are not interested in squeezing every dollar out of your business. For instance, you might invest a little more in your team so that you can take time off for travel, sports or other hobbies. In such a business, a toxic employee will survive for the short- and medium-terms, but eventually the havoc caused by a toxic employee will be their demise. If lifestyle drives you and your business, a strong team is required. A note of caution here: I see many business owners who sway between the goals of income and lifestyle. This can cause severe tension within your business because one must have priority over the other to be sustainable.
3. Equity: Think of this as building a business that has value over and above any individual. If this is your goal, income becomes only one piece of the puzzle; the power of team and the strength of your brand are equally important elements. Toxic employees will either fall in line or will not last long in a business focused on equity because results are not the only scorecard.

What is important to me is equity. Yes, we need income. Yes, I need some time off to pursue hobbies and other lifestyle pursuits. But my drive is to build equity because that will give us long-term stability, opportunity and strength. There are times we consciously sacrifice short-term returns in the hopes of creating more equity. As a result, toxic employees will not last in my culture.

That is why we are creating equitable compensation programs that are consistent for every team member. We are holding everyone — even the high performers — equally accountable to follow our process. We are focused on creating true team rather than a group of individuals. We will retain as many all-stars as we can, but they need to follow our processes, and they need to work constructively with team members. Terrell Owens need not apply.

It will be interesting to see how the coach works with the soccer prodigy. Is it all about playing him as much as possible to try to win every game? Or is it about teaching strong fundamentals, discipline and team spirit — the foundations of equity that will allow the team to succeed far down the road?

RELATED ARTICLES:
Bruce Case's blog [2]
Consultant Rodney Hall's blog on human resources [3]