I was born into a long line of entrepreneurs, so it was no surprise to anyone that I started my first business at age 14. It was a chain of large concession stands at county baseball diamonds in rural Kansas. (Don't laugh; my Trump-size lemonade stands more than paid for my college costs.) Prior to selling the business, over the next seven years,
I employed 30 people ranging in age from 16 to 45. Of those, we only lost two. One was injured in a non-work related car accident. The other, I terminated.
Running that business made me grow up fast. What I miss the most was at that age everything seemed so simple. I was too naive to know any different and my management style was the same way. For example, I gave everyone working for me three chances. When a big mistake was made by any of my employees, I took the blame, thinking I had not done my job and properly trained my people. I made a note of it, retrained them, and moved on. The second time they made the same mistake, I placed the blame on them. I felt I did my job, but now they were not doing their job. Again, I documented it, helped them understand what they missed before, asked for an apology, and set a consequence if it happened again. The third time the mistake was made, I enforced the consequence. With big mistakes, the consequence was termination. In the fifteen years that I have been operating my own businesses and managing people, only one employee ever made a big mistake twice.
Managing people is difficult, and getting them to perform the way you want is even harder. But over the years that I've been working with independent advisors, I've noticed a troubling trend that seems to be getting worse: Advisors are very quick to jump toward the idea of terminating their employees, even ones they confidently hired only a few years prior. Even worse, that thought frequently turns into action–often for all the wrong reasons–which usually costs them hundreds of thousands of dollars in effort, resources, and headaches.
The reason for this rush to a costly judgment? A surprising number of advisors have no idea what to do when an employee isn't performing as expected. Consequently, as if that would solve the problem, the only real thing they grasp is the thought of getting rid of them. The problem is that many planners have simply never been taught how to manage people. As a child, I was taught this principle by watching my grandfather manage his engineering business, and while my management style in my first business was quite basic and somewhat "ice-queen-like," I did trust it. I had to. It was the only thing I knew at the time, and the only way I could get people to respect me, despite my age. Our retention rates proved it worked.
How you handle various situations will depend largely on your management style. Having worked for, and with, many planners, I've learned that there are three very dominant, somewhat chaotic management styles in this profession that cultivates the "firing-is-the-only-option" mentality.
The first is what I call the "Snapper." Snapper managers are very tolerant. They don't like conflict and, consequently, their employees can push them further than other managers, such as continuing to make the same mistakes over and over again. But to avoid conflict, a Snapper will ignore the problem until it builds up to a level where one day, they've had enough and well, snap. Then, in an out-of-the-blue second, they decide to get rid of what they believe to be the problem–the employee.
