Hey there, welcome to this episode of our podcast! Today, we're talking about a topic that can be a challenge for many online businesses: dealing with underperforming employees.

As a CEO, I know firsthand how difficult it can be to address underperformance in the workplace. However, I've learned that taking action is crucial for the success of the business. In this episode, I'll be sharing some actionable advice on how to identify signs of underperformance, communicate effectively, and put performance plans in place.

In this episode, you'll learn:

• Signs of underperformance: We'll discuss some common signs that an employee may be underperforming, such as missed deadlines, poor quality work, and lack of engagement. It's important to be able to identify these signs early on so that you can take action before the situation gets worse.
• Communicating effectively: We'll talk about how to have difficult conversations with underperforming employees in a way that is respectful and productive. This includes setting clear expectations, providing specific feedback, and listening to the employee's perspective.
• Putting performance plans in place: We'll discuss how to create a performance improvement plan that is tailored to the employee's specific needs and goals. This includes setting measurable objectives, providing support and resources, and regularly checking in on progress.

Throughout the episode, I'll also emphasize the importance of evaluating whether an employee is the right fit for the team and knowing when it's time to let go respectfully and professionally.

The consequences of not taking action when dealing with underperforming employees can be damaging to the business, including hurting revenue and team morale. As a CEO, it is essential to take responsibility for the success of the business and address underperformance, even if it is uncomfortable.

So, if you're a business owner or manager who is struggling with underperforming employees, this episode is for you! Tune in to learn some practical tips and strategies for dealing with this common challenge.

Links & Resources:

• The Art of Online Business website
• DM me on Instagram
• Visit my YouTube channel
• The Art of Online Business clips on YouTube
• Full episodes of The Art of Online Business Podcast on YouTube
• The Art of Online Business Podcast website
• Check out my Accelerator coaching program

Please support the podcast by giving an honest Rating/Review for the show on iTunes!

All right, what's up my friend? Welcome to today's episode of The Art of Online Business Podcast. Rick, I'm Mulready here. How the heck are you today? Hope you're doing well. So today I wanna talk to you about a challenge that so many of us CEOs of online businesses come across or deal with, or ignore for way too long. I know that this is something that I did early on in my business a lot, actually, because honestly, it was just something that I didn't want to deal with, and then I learned my lessons, and that is the, when we hold onto an employee for far too long, meaning this person's been underperforming for a long time and we have not dealt with it in the proper way, whether that's putting them on a performance plan or whether that's actually letting them go when we hold onto something or hold onto somebody for too long, it is a huge hindrance to the business.

Obviously, it's so important to have the right team members in place to grow and scale your online business. And when we don't have those people in place, meaning they're on your team maybe, but they're just not performing, what tends to happen and what I see a lot of, especially this year, there are some people in accelerator that were going through this earlier in the year where they were holding onto employees for too long, for whatever reason, and it was really hurting the business. So what I want to do here today is help you identify, you know, some of the signs of an underperforming employee, what some of those consequences are of not taking action on that underperforming employee or employees, and then just give you some actionable advice and tips on how to handle those situations. One thing that I want you to remember, I learned this really early on, I've never forgotten this, is the team members that you have in the early part of your business generally are not the ones who are going to get you to the next level in your business.

Whatever that next level is, it's not like a set dollar figure like, oh, I reached $200,000 in my business. The team that got me to this point are not gonna be the one to get me to half a million, or whatever it might be. But I've seen this was the case for my business, and I've seen this time and time again with the people that I've worked with and coach the people that get you to a certain point in the business when it's time to make another big jump in the business. If that's something that you want to do, generally, it's not the people that got you to the point right now that are gonna be able to help you get to that next level. It's just another skillset, et cetera. Or they are the right employee that you wanna hold onto and you just need to move them into another place on the team.

Now, we're not gonna get into that part right here on today's episode, what I really wanna dive into is when we hold onto an employee too long. Now, earlier this year, I was down in downtown San Diego at the harbor, and there was this massive cruise ship there. The cruise ships come into San Diego Harbor all the time, but I don't think I've ever seen a bigger cruise ship than I was looking at at the time. And my nephew was, was actually visiting from, he was on spring break from, uh, Roger Williams University come out to visit for a week or so, and he wanted to see, you know, the harbor in downtown and stuff like that. And so I started thinking about, it's the perfect metaphor, right? So let's just say that cruise ship, when it's ready to leave port here in San Diego, it backs up and then it starts to head out to sea.

Well, as that thing starts picking up steam, if you will, and starts to go faster, let's just say that the anchor on that boat gets dropped and it is just this huge heavy anchor, right? And the bus or the ship is trying to move forward, but there's this heavy weight, this heavy anchor that's stuck on the ocean floor that is keeping the ship from moving forward. This is exactly what it's like when you're holding onto an employee for too long. That employee is going to bring everything down else down in the business, and it's gonna kind of keep you stuck in neutral, if you will. You're trying to move forward, but you, you are slowing down and it's keeping you stuck because of that, right? And so what are some signs of an underperforming employee, first and foremost when you bring somebody on? And also, if you've had somebody on for a while on your team, you need to be consistently reviewing with them what their responsibilities are, what are the results that they're responsible for?

Okay? So number one, there has to be clarity there because if there's not clarity, then you as the C E O or the manager, what have you, are gonna be expecting one thing, and then there's gonna be a complete miscommunication with that person on your team who doesn't understand what the expectations are of them, right? So you're gonna be wanting one thing and they're gonna be doing something else, and they think they're doing things right, but yet you're expecting something else. Like that's been, I've gone through that so many times over the years and it's super frustrating, right? So that's why it's important to have a role description that, you know, yes, you take into account the job description, but then you can also have a role description about what the types of things that, that, you know, what are the measures of success, how will they be held accountable, et cetera.

And so let's just say that there is clear communication between you and the employee, and they're saying that they know, you know, what they're supposed to be doing, and maybe for a while they are, they're doing really, really well, but then they start to miss deadlines, or they start to underdeliver, maybe their engagement in the business or enthusiasm is less than what it normally is. Maybe they're making a lot of mistakes or making poor decisions and right? And just a quick note on mistakes, right? Look, we all make mistakes. We're human, but when the same types of mistakes keep happening and the person is not learning from that, that's when we start to run into a problem, right? So if they're making poor decisions, if they're making a lot of mistakes, if they are resistant to change in the business, or you know, if improvements are being recommended and the to the team or you know, the other, the rest of the team is making improvements and that person is just really resistant to all that, this is gonna have a negative impact on the team morale and productivity.

This is also another example of this, is if they are having a negative impact on team morale and productivity, these are all absolutely signs of underperforming people on your team, okay? And so the idea there is to, number one, make sure that you are watching this, keeping an eye on this. And, you know, uh, again, we're not gonna get into it all in this episode here, but ways that we can be doing this is through our scorecard is through regular check-ins, team meetings. Are they doing what they're supposed to be doing? Are they, you know, are they operating within the values that you've set for the business? I mean, if they're consistently outside the bounds of your values, huge, no-no, right? That has to be dealt with immediately. So if these things are happening, I'm not saying get rid of them right away, right? But we do need to address it with them.

We need to have that open communication with them and giving them honest feedback. We need to be, a lot of people don't do this, but in the v at the very minimum, quarterly reviews with people on your team. Now you might be saying, well, Rick, I don't have any full-time employees on my team, I just have a con contractors. So if for, if that's the case, I would be doing sort of monthly check-ins with your contractor to make sure things are, you know, that are getting done that are appropriate to what they're responsible for. Now, I'm not saying don't talk to them for a month, I'm just saying you can sort of put like a sort of more, a more formal, you know, system in place or process in place where you're checking in with them and at least a monthly basis on how the overall performance of what they're doing in the role, right?

And also, this is not legal advice in terms of employee versus contractor. So let's just say you're doing those things, whether it's a contractor, whether it is a, an employee, and you're still having problems, we need to have some form of performance improvement plan. Generally, it is a 30 day improvement plan. What that looks like is a conversation with that person and being very clear on what you're seeing, examples, and then what that improvement plan looks like. What are your expectations that you want to see in terms of improvement over the next 30 days? And then you revisit that at 30 days. Part of this right here is a lot of CEOs, a lot of us don't want to even have these conversations because we as CEOs often don't want to deal with, you know, team issues or team managing a team or being a boss or whatever.

You just wanna do your thing, right? This is a, unless you have an integrator or somebody on your team who is managing the day-to-day of the business, and the team is reporting to that person, and they are doing all of this for you in terms of HR type of stuff, then you gotta be doing this yourself. And I know this is a part of it that so many of us don't like to do, but it's a necessary piece of being the c e o of your business, okay? And, you know, implementing that performance improvement plan, offering them support and for growth, and again, it's really clear that those clear expectations and deadlines for improvement are set. Okay? And so those are the things that we need to be doing when there is underperformance. So what if we are not doing those things, which is something I see a lot of, or we are doing those things, they continue to under improve, but yet we're not doing anything about it that has huge consequences to the business and to the rest of your team.

So what this is gonna do, it's just like that anchor, that person becomes that anchor where you as the business is like that cruise ship trying to move forward, but there's that anchor that's holding you back, and that is stifling the growth of the business. And it also can affect overall team performance and motivation, because the rest of the team is saying, oh, we're, I mean, they're doing their jobs, right? They're thinking, we're working really hard over here. We're getting our stuff done, we're coming up with great ideas, we are trying to help the business move forward, but this person over here is not doing what they're supposed to do. And they're holding things up. And also that sends to weigh on the people on your team who are performing really well, because they're probably thinking, well, why isn't, you know, why isn't Rick doing anything about this?

Well, if this person's continuing to get paid over here just like we are, but they're doing a crappy job, what does this say about Rick as a C E O, right? Also, this can mean increased workload on those team members that are doing a good job because they have to pick up the slack for people that are underperforming. That person might be damaging client relationships, not doing the things that they need to do to fulfill for your current clients or your current students, or maybe they're responsible for customer service or what have you, and they're not doing their job well, that is hurting your overall business and the reputation of your business hurting your brand. Perfect example of this is, I was working with a member of our accelerator coaching program earlier this year, and they had somebody on the team who was a chronic underperformer, which is was, I mean, the first conversation I had with the person that I was coaching or that I am coaching, the same conversation happened after several months when we were talking, and this person just still hadn't done anything about this, this underperforming employee on the team.

And they were coming up on a huge launch in the business, and they were using a tool in the business in terms of checkout, right? And it's, it was an order form tool, and it was actually hurting. The conversion rates on the order form were not good. They also had an upsell in place. And so this tool they were using was actually hurting revenue. And I'd recommended, you know, long before to move over to another tool, because this was something that I'd seen over and over, this is not new, and I'd recommended this other tool and, you know, the person was that I was coaching was, you know, a little bit apprehensive because it meant more work and new tools and stuff like that. Making this kind of change meant that this person on the team, this underperforming person, would need to learn all this stuff and just wouldn't be psyched about this, basically, in a nutshell.

And so the c e o that, that I'm working with didn't, you know, didn't make a change. And then all of a sudden they were up against this huge launch and they came to me and they said, do I make this change now to, you know, to this new, this checkout tool, or do I keep what we're doing where this underperforming employee actually does know how to troubleshoot things if things go wrong, but doesn't know anything about this other tool? And so at that point, right there, so the underperforming person on the team had been held onto for far too long, and this was another glaring example of how this person is, was actually gonna be hurting the financial opportunity of the business, right? Because the c e O hadn't made a change earlier on. Because if that happened, then maybe the new checkout tool would've been implemented earlier, or the checkout tool would've been implemented shortly before the launch, and the right employee would've been able to jump right in there, take initiative, set things up, test it, and to be able to educate themselves on potential issues that might arise.

You know, connecting all the right tools and the, and like, and just run with it and own it. But that person who was on the team wasn't that person. I mean, that is a negative consequence of holding onto somebody on the team for far too long. Oftentimes when you lose trust in somebody on the team, it's, for me personally, there's kind of no going back on that. And that is on you. You need to deal with that as a C E O. If people on your team, or if a person on your team has gotten to that point where you don't trust them anymore, it's really hard to go back. And again, what I see a lot is we as CEOs tend not to do anything about that because like, I don't wanna deal with that, and so we just don't deal with it. But as you're hearing today, there's a lot of consequences when we hold onto an underperforming employee for far too long.

You know, give you an example of, for me, or a couple months ago, and this wasn't somebody I held onto for two, well, maybe it was for a little bit too long, but they were working on a project. I had the whole team working on a project, and each person sort of had their assigned area of the project that they were responsible for the results for. And ultimately it came to the point where I had to let this person go for a number of different reasons. And once this happened, the other members of the team got into look at what this person was doing, and they hadn't even done the things that they said they were, they were gonna be doing. And also the things that they had done were done incorrectly. Now completely, I take responsibility for that, again, because we are the c e O, it's our business.

We need to take responsibility for everything that's happening in the business. But now my, you know, amazingly performing people on my team had to pick up the slack, right? And that's not good. I don't want that. But it was just another example of the types of things that can happen. So we really need to, and this is the uncomfortable part, again, as a C E O, so many of us don't want to deal with these sorts of things and manage people, but we do need to. And it is a skill, and it's not something that, like you snap your fingers and be like, oh, okay, I'm a like, I love doing this, or I'm amazing at it. You don't have to like it, but you do need to do these sorts of things again, unless you have an integrator, for example, in your business who's handling this type of stuff, okay?

And so when we hold onto people for too long, we've got to come to a point where, all right, you're not gonna let this happen anymore. And that's what happened with me early on in the business where I was holding onto people for too long. And all the things that I'm mentioning to you today were happening. And finally, I'm just like, this is not going to continue in the business. And we have to know when it's time to let go of somebody. And then how to do it, you know, respectfully, they're a person, right? And professionally, and I've talked about here in the podcast before, and this is something I talked to our accelerators about all the time. When we're having a conversation like this, I want you to be reiterating it's the business needs. The business needs this, the business needs X or Y.

And so that might be the business needs to change directions now or what have you. It's never like, don't be like, I need to do this, because then it becomes a little bit more personal. It's not personal, it's just business, okay? So don't be afraid to put those performance plans in place. Make sure that you've got clear expectations that you're communicating with people, giving them honest feedback. You've got them on if necessary. You got them on a performance plan, you're offering them support along the way. And if things continue to go awry and they're, they continue to underperform, then we need to let them go and have that tough yet necessary conversation with them. Now, lastly here, one of the things that, that does come up a lot too, when I'm talking with, you know, online business owners, it's not only how do I know when it's time, which we've talked about here today, but one question I ask them is, if they left the business tomorrow, if they just up and left the business tomorrow, would you be upset?

Would you do everything possible to get them back? And if it's not a hell yes, I would really look at that. Why are we keeping that person on the team if it's not a hell yes. It's kind of one of those filters that you can ask yourself that can really help start to make these decisions. And they might have the most amazing personality and like all the values and all that stuff, and you get along with them great, and they're hardworking, but they're just not performing in that role. Well, that might be an example of, all right, we need to move this person into another role, okay? But just kind of recap what we're talking about here today. There is huge risk and huge consequences of holding onto employees for too long. They are gonna be the anchor of your business, and I don't mean that in a good way.

I mean that. And they're going to slow you down. They're gonna be dragging the business along when you just want to keep moving forward. And you've got this huge weight that's holding you back, that is that employee that you're holding on for too long. So I want you to reflect on your own team, and we need to evaluate whether you've got any underperforming employees that need to be addressed. And if you wanna read a great book about how to do all these types of things and have actually a process in place, a system in place is traction by Gina Wickman. I've talked about the book a million times here. It's like your operational bible, if you will, for your business, but they have like the want it, get it. I forgetting the third thing, but they have like sort of like a checklist, if you will, that are based on your values.

And then do they get it? Do they want it? Do they do it? Something like that. And you know, if you're saying, no, no, no, we've got a problem. So think about your own team. Evaluate, you know, do you have any people on your team right now that maybe fall under this that you maybe have been holding onto for too long that you really need to address? Because letting go of, and I'm, again, I'm not, you know, I'm not encouraging you to let go of somebody just at will or just for the heck of it. But if you've got somebody that you feel like you've been holding onto for too long and you know right? You, your gut's telling you, yeah, I've held onto this person for too long. The best decision for the both of you, for the business and for that person is to move on, is to have a conversation.

And hopefully, hopefully this doesn't come out of, you know, left field for them, where you've been having conversations all along, doing the performance plan, doing reviews, et cetera, then you just gotta move on and make another decision here. Huge consequences for holding onto employees for too long. Hope this was helpful for you. Again, this is a very common challenge, and if you're doing this, it's okay. It's just a, and we all do it right? Just a matter of, okay, let's learn from this and this is one area where we can be better as CEOs. All right, my friend. Hey, if you've not yet left a quick rating and review for the podcast over on Apple Podcast, if you could take 10 seconds to do that, I would super appreciate it. Also, hit that subscribe button on your listening app, whatever you're listing on, whether it's Apple Podcast or Spotify, click subscribe or follow so that you don't miss any episodes here on the show. And I do read all the reviews for the show over on Apple Podcast. It's still very helpful for the podcast, which is why I'm helping your support is greatly appreciated. Thanks in advance for doing that. And thanks as always for listening today. I appreciate my friend. Until next time, be well and I'll chat with you soon.