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  • Writer's picturejoel

Why Leaders Fail to Design a Great Team? Obstacle #2 - Leaders Hold onto What is Familiar:

Updated: Nov 29, 2023

Building a successful team may be a difficult effort for leaders, and one of the most common challenges they face is the reluctance to let go of present employees. This could be due to several factors, including apprehension that it could result in higher turnover, devotion to long-term members of the team, or a reluctance to part ways with those in whom they have spent time and effort. This approach is frequently motivated by apprehension over the unknown as well as the mistaken notion that employee turnover is undesirable. Nevertheless, keeping employees who aren't pulling their weight can result in a negative turnover rate, in which high-performing workers quit out of frustration or burnout.

The Law of Familiarity:

According to this psychological principle also known as the "Law of Familiarity" people tend to favor what is familiar to them because it enables them to feel more at ease and in control of their surroundings. Because leaders worry that employee turnover will disrupt the business or their predictable routine and lead to a loss of productivity, they may be hesitant to let go of any current employees, even those who are not meeting the company's standards or culture. They concluded that if it was familiar, at least one would know what to expect from it.

The Loyalty Fallacy:

It's possible for leaders to develop feelings of loyalty for their employees, particularly those workers who have been with the organizatin for a significant amount of time. It's possible that they put a lot of effort and time into training a member of the team, and now they don't want to see any of that time and effort go to waste. This can also occur when the leaders of the team place a greater emphasis on their individual team members than they do on the overall health of the organization and the team, which is the more constructive and beneficial approach. Leaders who prioritize pleasing others have a greater risk of giving in to this temptation.

Although it is admirable, this sense of loyalty should not be at the expense of the success of the team. When making important choices, loyalty shouldn't be the most important consideration. It is imperative that leaders put contingency plans into action to ensure that any gaps in the team's task are adequately covered. In addition, leaders should mitigate having to deal with underperforming personnel by proactively making the recruitment and hiring of the best applicants for open positions a top priority in their organizations. However, to build a high-performing team, leaders need to strike a balance between their followers' loyalty and the responsibilities that come with their positions.

Negative Turnover:

The failure of leaders to engage in positive turnover because of their insistence on clinging to what is comfortable is one of the factors that might contribute to the phenomenon known as negative turnover. The term "negative turnover" refers to the departure of high-performing members of an organization for reasons such as exhaustion or discontent with the team's overall performance. When leaders continue to keep members of their flock who are not productive, they run the risk of alienating their eagles. Talented individuals want to collaborate with other talented individuals, and they will not want to remain in an environment where they are constantly held back by underachievers.

The Robinhood Effect:

When high-performing individuals perceive that their coworkers are not held to the same level or are not contributing to the success of the team, eventually they will become discouraged and believe that their hard work is not being valued. If this is not addressed, it may also result in the development of a culture of entitlement. Good performers can begin to feel they are being asked to make up for the deficiencies of the lower performers. The Robinhood Effect is when those who have (responsible team members), are asked unwillingly to compensate for those that do not have (less responsible team members). Rob from the rich and give to the poor.

Over time the Robinhood Effect may result in feelings of animosity from your reliable team members. This may eventually lead to the choice to leave the organization. Our eagles eventually become sick of working with the turkeys and leave the company in pursuit of a better work culture where accountability and appreciation is given more importance.

The leaders of the team need to be willing to let go of those members who are not contributing to the success of the team to prevent negative turnover. The culture of an organization should be one in which leaders encourage and recognize good performance and in which all employees are held accountable for ensuring that corporate goals are met. They need to make finding and employing the best potential individuals a top priority to avoid being trapped with personnel who are unable to meet expectations.

Positive Turnover:

When leaders focus on the benefits of positive turnover, they will be able to overcome their fear of the unknown and let go of people who are not performing to their potential. A positive turnover rate is achieved when managers consciously replace employees who are underperforming with others who have a higher potential. Increased employee turnover can result in a workforce that is more productive, efficient, and profitable. The idea that firing underperforming employees is not a bad thing but rather a step in the right direction toward establishing a better team is one that managers and other leaders should embrace.

  • Positive Turnover = Continued improvement through the process of consistently upgrading and replacing your lower performers little by little over time.

  • Negative Turnover = Continued depreciation of talent through the process of atrophy by downgrading and losing your top performers little by little over time.

Another reason leaders hold onto underperforming employees is that they believe that they need to turn them into high-performing employees. The belief that they are obligated to transform low-performing employees into high-performing workers is yet another reason why executives choose to keep personnel who aren't meeting expectations. This misconception is frequently exacerbated by the sunk cost fallacy, which refers to the assumption that individuals are more likely to continue investing in a project or choice because of the resources that they have already put in it, even if the project or decision is not working as expected. Leaders that continue to work with personnel who are not performing up to expectations may naively hope that the employees will eventually improve their performance squander a lot of time, resources, and energy. Leaders should focus their efforts on recruiting and hiring high-performing workers who are already a strong fit for the team rather than increasing their investment in employees who are not performing up to expectations.

This can be compared to the process of trimming the weaker buds that suck up vital resources from a rose bush. It is imperative that we always put our most valuable resources at the forefront of our lineup. As a leader, it is not our responsibility to ensure that everyone is compensated equitably and that all their requirements are met in an equal manner. If we don't weed out the people who aren't performing well, they'll never have the motivation to improve their game and become high performers. It goes without saying that we should always make sure that everyone has a fair and equal opportunity to contribute, but rewards and continuous employment should be awarded depending on the outcome or the outcomes. Everyone needs to have equal access to opportunities, but attempting to provide everyone with the same outcomes is a formula for disaster, particularly for those who are unsuccessful.

Backwards Leverage:

It's possible that managers who keep employees who aren't performing up to par are also paying them more than they should be to keep them happy, so they don’t leave. Employees will have an exaggerated sense of their importance to the organization if they perceive that there is little threat to them for their poor performance. When people start to believe they are irreplaceable, it's like playing a game of tug of war for the boss since they'll start to lose their leverage. Backward leverage is when leaders overpay low-performing employees to retain them, even though those employees are not contributing to the success of the team. Backward leverage is a desperate form of employee retention. Backward leverage is a desperate and unsustainable position because it rewards mediocrity and sends the incorrect message to present and potential high-performing personnel. When something like this occurs, the leader has an instant responsibility to act to rectify the situation. I will expand on this topic later.

Creating a culture that promotes good turnover should be the top priority of all leaders, no matter the cost. In the society that we live in today, I feel that a company that serves the blue-collar community should make it a point to routinely replace the employees that make up the bottom 25 percent of its roster. This will result in three different outcomes: The lack of skill will be remedied by the introduction of more desirable options by the organization. Those that underperform will not be rewarded for their poor performance, and instead they will be placed in a position that demands them to make the proper adjustments so that they may learn to carry their own load. High performers will do well in an environment where there are fewer obstacles and barriers to the progress of the team.

Objective Standards:

Utilizing data and metrics to make decisions to gain a better understanding of the situation is yet another method for overcoming problems with objectivity. It is the responsibility of leaders to monitor employee performance and single out those who fall short of expectations. It is possible for leaders to steer clear of making judgments based on subjective considerations like loyalty or fear of the unknown if they make use of objective evidence. The use of data can also assist leaders in identifying sections of the team that are working effectively as well as areas that have room for development.

In addition to this, it is vital to discuss the employees' performance in an open and forthright manner with the employees. The perspective that matters most is the employee. A great leader will always focus on how the employee perceives their performance and how it will likely affect their future income, work relationships and opportunities. It is the responsibility of leaders to provide feedback to employees by seeking a common transparent mutual understanding whenever possible of their performance and how they may improve. In some instances, it may be beneficial to get feedback from some of your core team members on the performance of individuals.

If a worker is not performing up to standards, managers need to provide them with a specific timetable for improvement as well as the tools and assistance they need to reach their objectives. If an employee is still not meeting expectations after the allotted amount of time has passed, managers need to be ready to let them go by completing the necessary processes for terminating their employment.

Having data to back up your concerns can make any hard conversation easier. It puts the responsibility back on their actions rather than the leader’s subjective opinion. The ability to have unpleasant talks with employees who are underperforming while maintaining a combination of care and candor is a must for leaders. They should convey the expectations as well as the repercussions of not meeting them in a clear and concise manner. If it turns out that a person is not a good fit for the team, the leaders should be willing to let them go, even if it causes a temporary disruption. This may be challenging in the immediate future, but it is necessary for the continued growth of the organization in the long run. Leaders can establish outstanding teams that are able to drive the success of the company and attract and retain top talent when they are willing to embrace change and progress, as well as place the success of the team ahead of their allegiance to individual employees.

In summary, leaders often struggle to let go of familiar team members, hindering the building of successful teams. This reluctance is rooted in the Law of Familiarity, where leaders favor the known for control, leading to a loyalty fallacy. However, loyalty should not compromise success, as negative turnover may occur, driving away high performers. To overcome this, leaders must embrace positive turnover, replacing underperformers for enhanced productivity. Believing leaders can transform low performers is a misconception driven by the sunk cost fallacy. Creating a culture valuing good turnover, adhering to objective standards and utilizing data, ensures leaders build outstanding teams focused on success. Embracing change and prioritizing team success over individual allegiances are essential for sustained organizational growth.

Joel Smith

Business Coach, Author and Entrepreneur

This article is a section out of the book Team Design: Building Great Teams By Attracting the Right People. Download the Free PDF version.

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