Alex Freytag
Featuring Certified EOS Implementer™ Alex Freytag of ProfitWorks
Have you put off acting on a “people issue”? If you’ve hesitated to take action with an employee who seems to be in the wrong seat, you’re in good company. But what are the costs associated with failure to tackle your people problems head-on?
We’ll explore that here, and also share some best practices to optimize your team going forward using modern talent acquisition strategies.
People issues are huge for companies, and companies running on EOS® are no exception. A few years ago, EOS founder Gino Wickman wrote that a whopping 82% of their graduated clients had engaged because of people issues. Wickman has also written that:
“After over 1,400 full-day sessions with over 125 companies and over 11,000 hours of working with leadership teams, I’m convinced that the number one impact on an organization’s growth, once the vision is clear and the structure is right, comes from getting the right people in the right seats.”
To tackle this topic, we enlisted the help of Certified EOS Implementer™ and entrepreneur Alex Freytag of ProfitWorks. The following outlines his expert insights and proven management methodologies.
The Danger of Waiting to Take Action
In most cases, business leaders wait too long to correct their people problems. Jim Collins has said that, “The moment you feel the need to tightly manage someone, you’ve made a hiring mistake.” Really what he meant is when you have to micromanage someone. When you don’t trust their work and feel like you have to monitor their performance in a significant way, you know there is an issue.
It’s not enough to simply acknowledge it, either. Once you’ve identified there is a structural misalignment, action should be taken to resolve it. Waiting too long creates a huge opportunity cost for your business:
- Wasted Time and Energy: It is common to talk about the same person or issue across consecutive quarterly meetings. If 90 days go by and you are still gathering data, that is wasted time. Time that should be devoted to productivity and growth is spent managing a people problem instead. If you have five people on your leadership team, and you debate it for hours more than once, that is a massive drain on company resources. Had you addressed the issue months ago, you would now be talking about how great a new superstar is in that seat.
- Loss of Leadership Credibility: When a leader finally decides to let a struggling employee go, if they’ve waited too long, they may have lost credibility with the rest of the staff. In most cases, everybody in the company knows when someone’s not working out. The team looks to you, as the business leader, to manage the situation. By kicking the can down the road, leadership trust begins to erode. Being a leader means making those tough calls with grace.
- Cultural Damage: Prolonging a personnel issue creates a lot of unnecessary workplace stress. Performance gaps quickly become water cooler conversation, which fosters gossip and frustration. Employees start to question whether leadership is truly committed to excellence. The longer it drag outs, the more it breeds a toxic culture.
Removing underperforming personnel or cultural outliers from your team allows your top-performing stars to fly higher and shine brighter. When your attention isn’t spent trying to fix poor performers, you can focus your energy on creating growth opportunities for your superstars, ensuring stronger long-term retention.
Fill the Folder and Have Tough Conversations
One critical step many leadership teams miss is that they aren’t “filling the folder.” By that, we mean the managers who are doing the coaching aren’t documenting specific examples of where someone is violating a company value or underperforming as it relates to a potential alignment gap.
To run a fair, objective candidate evaluation, you need to gather clear data points. Start a document that records the date, the incident, and the specific performance metric or core value that was missed. You are tracking a behavioral trend, not isolated emotions.
This applies to structural skill gaps as well. If you see someone demonstrating a lack of execution in a role, or if you think their current seat has grown too big for them, document those specific gaps. When a manager has that data, they are armed with factual, metric-based information versus emotional impressions.
With clear documentation, managers can methodically have an adult coaching conversation about the misaligned behavior. When you have a good person in the wrong seat and you don’t address it early, they can turn into the wrong person altogether. Their attitude may shift because they’ve been left to flounder in a mismatched role. If you address the data trends sooner, the issue can often be fixed by a lateral move or targeted training.
Create a Repeatable Process to Optimize Your Team
Ideally, you want to maintain 100% alignment within your right people right seats framework. To get there, your leadership team needs to revisit your company structure every 90 days using the People Analyzer™ and Accountability Chart.
Using those tools is not a one-and-done activity. If your organization is scaling rapidly, you are likely going to be making structural adjustments to your Accountability Chart every quarter.
Most leaders do not have regular quarterly conversations with their direct reports, often waiting until an annual review to address performance issues. That is way too long. A quarterly conversation is a coaching checkpoint, not a formal evaluation. It is an opportunity to be completely transparent about documented events, review what behaviors have shifted, and establish a clear plan to facilitate positive change on a much tighter timeframe.
Why Open, Factual Communication Matters
Here is an example of why it is so critical to document incidents and communicate openly. We recently worked with a company where the leadership team hadn’t filled the folder with any written documentation, but they were able to talk very clearly in a session about different examples of a worker’s core values violations.
As we dug into the specific performance issues, it became clear there had been major inaccuracies on the reports this employee was filing, which directly affected the company’s operational numbers. That shifted the entire dynamic because it moved the issue from an emotional complaint to a clear breach of operational integrity and ethics.
Having an open conversation allowed the leadership team to view the problem from all angles, share stories, and confidently make the necessary structural change. The employee wasn’t surprised by the outcome because the numbers spoke for themselves. But how much longer might that issue have dragged on—and damaged business metrics—had the leadership team not come together to review the data?
A Best-Practice Approach to Managing Human Capital
When it comes to managing people, hope is not a strategy. Hoping an underperforming structure will magically fix itself is like not watering a plant and hoping it will come back to life. You have to prune from time to time, water it, or perhaps replant it. Proactive management is what leads to exceptional team outcomes.
Failing to remove chronic low performers means you risk losing your stars, who are often forced to carry the extra weight without relief.
It is also vital to conduct formal exit interviews after a separation to identify what went wrong and why. Take the time to reflect with your leadership team about what worked, what didn’t, and why that specific placement failed. Be vulnerable enough to accept structural blame. If you admit that a hiring criteria was flawed, you can adjust your corporate onboarding benchmarks and refine your data-driven hiring process moving forward to maintain ethical executive recruitment practices. Otherwise, the next person you place in that seat could present the exact same challenges.
Sometimes you need to admit, “yeah, we messed that one up; we should have seen that; maybe we should change how we ask that in the interview,” those kinds of things. Otherwise, the next person you put in that seat could present the same challenges you just worked so hard to get rid of.
In conclusion
In the early stages of scaling a business, some owners think it’s impossible to get 100% of the right people in the right seats. But when teams commit to the process, they reach a point where they have zero people issues during their quarterly reviews, allowing them to focus entirely on vision and execution.
To get there, great leadership teams aim to make at least one highly impactful people move per quarter. That could be a lateral move, a promotion, a termination, or launching an external talent search. By treating your people component as a dynamic, living entity that needs consistent tending, you build a healthy culture and secure a structure built for long-term growth.
Recommended further reading:
- Decide!, by Gino Wickman
- The Traction Library, by EOS Worldwide
- The Puppies and Stars Approach to Hiring, by Alex Freytag
- The Right Way to Solve Your People Problems, by Alex Freytag
- Why You’ll Regret Your Covert Search for a Key Hire, co-authored by Bob Spence and Alec Broadfoot
Image credits: © Canva
