Crucial conversations for entrepreneurs and investors:#2 Termination

21 Jan

Crucial conversations on performance and termination

Business

Before becoming a Financial Advisor for entrepreneurs in Toronto, I owned, operated and eventually sold two language schools. A language school is a service, and the staff and teachers were 80% of what we had to offer. To stay in business I had to find and keep the best employees. It was just as important to terminate employees that weren’t pulling their weight.

crucial conversationBefore assigning blame to an underperforming staff member, ask yourself how things got to this point. Then, identify what you need to do to get closer to the desired results. Determine if you let the employee get away with an inferior effort or if you haven’t properly trained and/or motivated him or her. Maybe YOU took your eye off of the ball.

If you honestly believe the employee has put in an insufficient effort, and even if you’d rather get a root canal, it’s time to have that crucial conversation. It’s often advisable to have a witness with you and to document the meeting in writing, especially if you believe that sooner or later you will have to terminate this employee. Give specific feedback on what has to change, when you expect improvement and how it will be measured. Outline the consequences of failing to make the required changes. Provide the employee with a copy of the meeting notes and remediation plan.

It is important to remember that when you decide to talk about performance, you are taking a calculated risk. On the one hand, you may salvage an employee who has experience with the company and get better results from him or her in the future. On the other hand, the employee may decide to leave immediately (or in the near future). In one of the worst scenarios, if the employee feels unjustly treated, he or she may try to stir up trouble with other employees. It is important to plan for all eventualities.

Investing

As entrepreneurs, we believe in ourselves. This self confidence often extends to managing our own investments, without the benefit of professional advice. If you are a “Do-It-Yourself’ (DIY) investor, you may need to have a crucial conversation – with yourself – to honestly assess your knowledge, efforts and results. Here are some questions you may want to ask yourself.

  • Do you have the knowledge to make specific, measurable, achievable, realistic and timely goals for your finances?
  • Can you put an asset allocation, a dollar amount and a date to each of your goals?
  • Can you determine if you have the right savings amounts and properly structured investments to make your dreams come true?
  • Do you know what steps to take to recalibrate and respond to evolving circumstances? Are you taking too much risk by foregoing advice? In being self employed entrepreneurs are already taking on lots of risk in business. I believe we should minimize our risks on the investment side by seeking good advice.

With a good Advisor, an expert does the heavy lifting while you run the business and make it profitable. Moreover, you now have someone you can hold accountable for results. If you are a DIY investor, think about terminating yourself as your Personal Advisor and hiring a professional. Have that crucial conversation with yourself (and remember to document it.)

It’s just good advice.