Get Rid of the Wrong People – Fast!

Get Rid of the Wrong People – Fast! Why a Three-Month Grace Period Can Cost You Three Years Today, I want to discuss a truth that many entrepreneurs, managers, and HR professionals are aware of but often don't take to heart: Having the wrong people on your team costs money, time, energy, motivation, and, in the worst-case scenario, the future of your company. And no, I'm not talking about someone having a bad day or dealing with an exceptional situation. I'm talking about the people who fundamentally don't fit in: In terms of performance, culture, or character. It is exactly during economic downturns that problems worsen. The markets are uneasy, interest rates are high, budgets are being cut, projects face delays, and investments are on hold. Customers take longer to decide. Meanwhile, competition for orders becomes fiercer than ever before. At the same time, companies are under immense pressure to stay profitable and control costs. In such times, every mistake, poor decision, and especially every bad personnel choice, becomes twice as costly! The tragedy is that it is exactly during these times that many companies fail to lead with clarity. Why? Because uncertainty causes paralysis. Because they are afraid of making wrong decisions, they prefer to do nothing at all. Because they hope that problems will solve themselves "on their own". Because they think now is not the right time to replace someone. The truth is: There is no better time to remove the wrong people from the team than right now! Every day you keep the wrong ones is a day you can't work effectively with the right ones. And no one will get this lost time back for you. Or to paraphrase Adorno: "There is nothing right in the wrong." Cost of Goods and Personnel In most companies, I keep seeing the same patterns: The two largest cost blocks are the cost of goods sold and personnel expenses. Depending on the industry, the cost of goods typically makes up 40 to 50 percent of the sale, and staff costs account for another 20 to 25 percent. Added together, this is up to 70 percent of the total costs. The material that a company needs for its products or services is, of course, indispensable. Without raw materials, there is no production; without goods, there is no revenue. However, there is a significant difference when it comes to personnel: materials are ordered, delivered, processed, and then the process is complete. Staff remains. And that can be either your greatest advantage or your biggest slowdown. The Principle of Hope is Sabotage of One's Own Company! And this is exactly where one of the biggest and most underestimated problems lies: Too many companies have become accustomed to mediocrity. They simply allow weak or unsuitable employees to continue to work as if the issue would somehow resolve itself. This is the leadership version of the "Principle of Hope". And hope is not a strategy, especially not in leadership. It is sabotage of one's own company! Anyone who seriously believes that a weak runner will miraculously become a sprinter at some point should ask themselves: Have you ever experienced in a sports club that the last person on the track suddenly became the first without training, without effort, and without change? Hardly. And yet this is precisely how many managers act: They hope that performance will increase on its own just because time passes. It's like turning the weakest link into a coxswain in Olympic eight-man rowing. No coach in the world would allow such a thing! It would be the assured end of the competition. However, in everyday business life, this is exactly what happens every day: The slowest person sets the pace unnoticed, the strong have to adapt involuntarily, and overall performance decreases. The team is still moving, but no longer at full speed ahead; in the best case, it is just moving in a circle, so that it doesn't sink. And this is the exact moment where it is decided how quickly a company reacts or whether it reacts at all. The hardest, and simultaneously most effective determining factor, is the probation period. Ulvi's Law: Shorter Probation Periods Many people in Germany confuse probation periods and protection against dismissal – and in practice, this leads to expensive mistakes. The law states that legal protection against dismissal only takes effect after six months of service with the company. This means that within the first six months, you can usually part with an employee much more easily. But what do most companies do? They also set the probation period at six months, "because that's just how you do it," or because that's what it says in the standard contracts. It may seem logical at first glance, but it's a massive leadership mistake! Because what happens? A new employee knows: "I now have six months to prove myself." That sounds reasonable, but psychologically, something else happens: He postpones his own performance standards. The first few weeks are more of a warm-up than a real sprint. My tip, therefore, may seem counterintuitive, but it is remarkably effective: Shorten the probation period to three months! Why? Because it sends a crystal-clear message. It forces both sides to deliver quickly. The employee must immediately demonstrate their capabilities, and you, as a manager, must judge them just as quickly to determine whether they are a good fit. This takes the "Let's wait and see" approach completely out of the game. And now we get to the crucial point: With an experienced employee (and I'm talking about individuals with five, six, or seven years of professional experience), you don't need six months to determine if they are performing. After a week, you'll have to see if they bring power to the game. After a week, they should have reached 80 to 90% of their performance level. The remaining 10 to 20 percent is fine-tuning, which they can work on over the next few weeks. However, you immediately recognize the basic dynamic: Whether someone shows initiative, takes responsibility, networks internally, and actively seeks solutions. If he is still waiting for someone to write him a to-do list after a week, if he remains passive, if he delegates every responsibility upwards, he will not suddenly turn into a top performer in the fourth month. That doesn't happen. I call this Ulvi's Law: After four weeks at the latest, you know whether the new person is a self-starter or whether they are hiding behind excuses, meaningless coordination phrases, and "We should..." sentences. And if you're still unsure after these four weeks whether you want that person next to you in the trenches, then it's a no. This applies to both emergencies and everyday life. Imagine the litmus test: You have a crucial customer appointment, but you can't go yourself. Would you send this employee alone with complete confidence that he will rock the appointment and strengthen your position? If your answer is no or "I don't know", then that's already a no. No long hesitation, no further grace period. Get rid of him or her! Immediately! Clear Metrics instead of Gut Feeling The problem with grace periods is that they create habituation on both sides. The employee thinks the pace is normal. The management thinks he will develop. But development without pressure is like fitness without training: You tell yourself that you'll "keep at it", but your belly doesn't get smaller. The wrong people don't just stand still; they drag the rest of the team down with them. The good ones see this, get frustrated, and leave at some point. And the company loses not only the weak ones, but also the top performers. Hallelujah! So, what to do? It's simple: Set clear expectations! I like to work with a simple 10-point system, tailored to the role of each employee. Sales, for example, is about personality, representation of the company, verbal and written communication, following up with customers, product knowledge, and reliability. Accounting is about getting the money in. Period. Whoever pays discount invoices first saves money. Those who consistently address defaulting customers improve liquidity. This is measurable. And the surprising thing is that if you go through this review openly with people, many will thank you for it. Finally, they know where they stand. It is finally clear where they are strong and where they have to step up. Translation of the graphic: Employee Evaluation – 10-Point System (Example) Reliability Product Knowledge Follow-Up with Customers Written Communication Verbal Communication Representation of the Company Personality Evaluation (1-10) And here, we are not only talking about salary and benefits, when we talk about costs. You also pay in lost opportunities: Customers that are not won, projects that are not completed, processes that drag on. If you give a sales representative a car, a laptop, and training on top of it, the costs quickly add up. The real disaster, however, is the opportunity cost, i.e., the missed opportunities that no one will be able to give back to you. Conclusion: Get Rid of the Wrong People! Therefore, my crystal-clear plea: Remove the wrong people as quickly as possible. No months of stalling tactics, no "He just needs a little more time", no waiting for the miracle that never happens. Every week that you leave a weak performer in the team is like a leak in the boat: In the beginning, it only leaks a bit, but at some point, the water is up to your neck. And then it's too late. The rule is simple: After a week, a professional must perform at 80 percent. Those who are not yet visibly in the game will not be in it in the third month either. After four weeks, the decision has to be made: Does he stay or does he go? Anything less than that is nothing more than wasting time and money! Beware of Backfire! And don't underestimate the chain reaction: Anyone who doesn't deliver drags the team down with him. The good guys have to make up for what the bad guy didn't get done. The mood changes, the level of service drops, and the customers notice it. The truly exceptional ones eventually leave. And you end up sitting with exactly those who should have left you long ago. The costs are not only salary and benefits. You also pay with lost projects, missed customers, and missed opportunities. The sum of these opportunity costs is often ten times the actual salary. And the longer you wait, the greater the damage will be. Three months of a false grace period can cost you three years. Not only financially, but also strategically.