Today we are talking about underperforming managers. But, let’s take care of a little bit of housekeeping here first. So when we say human capital, what are we talking about when we say human capital?

It’s essentially the value of the people in your business. Do you have rising stocks with rising value? Do you have stocks with diminishing returns? Do you have stocks that are going off the market? What is the value of the personnel you have in your business? This is an important thing to think about as we talk about underperforming managers.

So there are really two scenarios small businesses find themselves in relating to underperforming managers.

The first one would be where you have someone who’s just not happy. They’ve essentially quit your company, but they keep showing up every day and collecting a paycheck.

There are a couple of reasons why this might happen. The culture might not be for them, you may be limiting their overall ability, or they may not be feeling valued.

The second situation is that you have a manager who used to be great. They were showing up every day on time, doing whatever you asked them and delivering at a high level – now they’re struggling. They’re missing deadlines, they’re micromanaging their employees, they’re making excuses where they didn’t used to.

This often happens with employees that have been promoted up through the ranks. So, we’ve rewarded an employee for being loyal, but this is just the progression.

We might see someone starts on our shop floor, they show up every day, they are responsible and they show some leadership capabilities. So, we make them a supervisor. They continue to show up each day. They’re enthusiastic. They’re bringing some ideas to the business. So we may move them into a management role over the next few years.

We elevate them in the company. So as they’re elevating in their role, our company is growing as well. But what happens is oftentimes we end up with an overvalued asset in terms of that employee. Their experience is with your company and the your company has been busiest they’ve ever worked for.

They’ve not worked with any other company at this level, as well. So not only is their experience very narrow, it’s very shallow. They have experience in your company doing things a specific way.

As the company is growing, they don’t have any experience, ideas, training, resources to draw upon to improve. This can happen in the sales, operations or any any part of your organization.

They simply don’t have a breadth or depth of experience to draw upon, and they don’t have the capacity. They don’t have any experience or greater knowledge to draw on. They haven’t worked for a larger company.

How can we solve this problem?

We hire for experience and for capacity.

And what does bringing someone in with the experience look? So if you are a $5 or a $10 million a year business, If you bring in someone from a larger company who has been trained in the processes you need to thrive, and is able to help create a plan for future expansion, you have a candidate that can provide you with both key elements for growth – experience and capacity.

They’re able to educate and work with each person and develop them and give them more experience and more capacity. Now, your employee base \is getting educated and getting better in building a breadth of experience and knowledge which they can draw upon to make improvements to your business.

This is a topic we’re passionate about because at Key Hire, a majority of our job is to work with small business owners to assess their leadership team. Fix those constraints they have within their own personnel, and create scalable processes and procedures so they can reach their growth goals.

If you are struggling with an underperforming manager, or feel your small business might be out of capacity, feel free to reach out and schedule a free consultation with us –

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