Michael Hyatt: Hi, I’m Michael Hyatt.

Megan Hyatt Miller: And I’m Megan Hyatt Miller.

Michael:  And this is Lead to Win, our weekly podcast to help you win at work and succeed at life. In this episode, we’re going to talk about how to confront a high-achieving but bad-behaving team member.

Megan: This is a really tricky subject, because you can feel so much pressure as a coworker or a boss to tolerate bad behavior if the performance is there. Very often… Thankfully not always, but very often what makes somebody able to produce amazing results…their ambition, their confidence, things like that…also is a real setup for them to think they’re above the rules of conduct and ethics and behavior. It can be an absolute nightmare.

Michael: It can be. This is the exact opposite of somebody with humility who has high performance. This is a situation where, like you said, it’s somebody who’s confident, prideful, and that can get them into a lot of trouble. The very things that make them succeed on the performance front can be their undoing if they’re not careful. So, we have Larry Wilson with us to help guide us through this discussion. Welcome, Larry.

Megan: Hey, Larry.

Larry Wilson: Last month, we talked on the show about what to do if you work for a bad boss. This is kind of the flip-flop: what to do when you have that classic “bad boy” kind of employee, somebody whose behavior is a problem even though their performance is strong. You must have dealt with this. What was it like?

Megan: First of all, it’s super easy to handle if they just have bad behavior. Then you just fire them. If we’re talking about the kinds of things we’re talking about, you just get rid of them. The real conundrum happens when not just you have high performance, but oftentimes it’s the highest performance. It’s your best salesperson. It’s your rainmaker. This is the person you feel like you can’t afford to lose who’s also doing something that is egregious enough that it deserves termination, but you’re not sure you can afford to lose them.

Michael: So what you have to do is purpose that you’re not going to tolerate this. You have to be committed to playing the long game. Nothing will undermine your culture or undermine your credibility as a leader faster than not dealing with this kind of situation. I’ve definitely been in organizations where this kind of behavior existed and management was unwilling to terminate the employee because that employee was perceived to be a rainmaker and it would create a performance problem for the company.

I remember one time when we hired an employee. I won’t say what the organization was or what context it was, because I don’t want to give it away. This person had a serious drinking problem. In fact, we were at a trade show, and this person came back to their room. They were staying with another employee, because in those days we shared rooms. So he was staying with another employee. This person came in, went to the toilet, was vomiting in the toilet, and otherwise keeping up his roommate.

So the roommate called us and said, “You guys have to help me with this situation. This is just a mess. This person has come in drunk, and I don’t think it’s the first time they’ve done that.” I can remember saying, “Look. We can’t deal with it. We’re trying to get a good night’s sleep too. We have an important meeting in the morning, so just deal with it the best you can.” I remember lying there in bed with my roommate, who was my dear friend Robert Wolgemuth, and Robert, after a few moments of silence, turned to me and said, “You know, it’s hard to find good help.” Sometimes that can be true.

I’ve also dealt with another situation where I was in a corporate context, where one of the rainmakers for a pretty important division in our company was involved in sexual harassment. In fact, the woman he had harassed had reported it to me and to HR. In that particular situation, top management wouldn’t let it go any further. They made excuses for the person and said, “Well, it’s just hearsay. It’s just her word against his word. He said he didn’t do anything.” I absolutely believed the woman who told me. She had enormous credibility. This guy had been involved in other kinds of shenanigans before, so it was much more easy to believe that this…

Megan: It’s kind of like where there’s smoke there’s fire.

Michael: Exactly. As it turned out, that wasn’t the last time that happened, and when I got in a position of power where I could do something about it, I terminated him, but it was frustrating to me to exist in that kind of environment and to have to go back to this woman and say, “I’m sorry.” This was 20 years ago, so there weren’t the kinds of remedies, or we didn’t feel like there were the remedies there are today.

It put her in a very difficult situation, and the only justification for it was that this person was a top performer, so management looked the other way. I’m going to tell you what happened. That made me think much less of management, because I realized in that moment that their ultimate value was performance…

Megan: At all costs.

Michael: At all costs. There wasn’t a commitment to ethical behavior. They chose expediency over ethics. That didn’t make me feel great about the company I was working for either.

Megan: It really creates a lot of cynicism.

Michael: It does. My contention is that culture drives performance, not in the short term, but in the long term. If you compromise your culture for the sake of performance, you’re eventually going to suffer on the performance side too. You cannot afford to get these backward. You have to deal with these bad-behaving employees for the sake of your culture and for the sake of your own future performance.

Larry: As the leader, it is up to you to confront that high-performing but bad-behaving individual, and we’ve identified five actions you can take to do exactly that. So let’s get to them. Action one: get clear in your own thinking.

Megan: This is where you need to get the facts out in front of you. You probably need to get your HR team involved. More objective eyes can be really helpful, but you need to analyze. What happened? Did it cross the line? Is it inexcusable? Then how do we need to proceed once we have that in mind? What kind of confrontation is necessary? Are you looking at a termination? Are you looking at disciplinary action? Different circumstances call for different responses.

Regardless, once you have clarity about what has happened and you’re purposely not in denial, then don’t dawdle. You cannot afford to ignore the bad behavior. If a few days have gone by and you’re like, “Well, now it’s kind of awkward…” It’s going to be awkward, but you have to deal with it, because it’s only going to get worse. These are not the kinds of things that resolve…drinking, carousing, overspending, abuse to other employees, all of the things you can think of. These things don’t resolve on their own. They’re character issues, and they don’t go away.

Michael: You can get in a pattern, if you’re not careful, of you have that moment of clarity, you decide not to act, so you postpone it, and then you just keep doing that over and over again. The pain of confronting it, you think, is going to be significant, so, again, you procrastinate. You don’t want to do that.

One of the best places to start is get really clear on your core values. What is it that you, as an organization, are committed to? More than anything else, this will shape your culture. If they’re core values that are not just a placard you put on the wall but are actually something you’re committed to living out, especially as a leadership team, then you have some clarity about what you’re willing to tolerate and not tolerate.

We had a situation in our own company just recently where, Megan, you had to terminate somebody based on our core values. That was the driving force in giving you the courage to take the action, the clarity to take the action. Do you want to talk about that a little bit?

Megan: One of our core values, kind of the foundational core value of our company is unyielding integrity. That means we do what’s right even when it’s inconvenient, expensive, or embarrassing. In this case, it was some of all of those. There had been a violation of integrity that just could not be ignored, so I had to make the really hard decision that the right thing to do was to terminate that person.

I did it because I knew that not only was that person outside of integrity but that I would be outside of integrity if I chose to look the other way, which would compromise the trust my team has in my leadership going forward. I was willing to make a really hard short-term decision for the benefit of the long-term health of our culture.

Larry: So, the first action in confronting a high-performing but bad-behaving team member is get clear in your own thinking. Action two: count the cost. Does this mean cost to you, cost to the organization, or all of the above?

Michael: Actually, all of the above. This wasn’t a high-performing employee, but this was a high-performing client. I had to make the decision to confront that client and essentially terminate them, but I want you to look at the calculus as I counted the cost.

This was a best-selling author I was publishing back when I was in my book-publishing days. It was one of our most important authors. It was an author whose book we had at the printer, about to be published, and I learned of some behavior on their part that was very contrary to our values; in fact, in direct opposition to our values. I’m not going to go into more detail than that because I want to protect the people involved, but it was a very serious situation.

So I went to my boss once I learned of it. In fact, this was being reported in the press. I was being asked by the press for an answer, and I didn’t want to do that without making a decision on our part. So I went to my boss and said, “This is the behavior this person is involved with.” He, and this was right… He said, “We need to confront the person with the behavior before we take any action.” I said, “Great idea.”

So we flew out. We met with this author, and we said, “Look.” In fact, I took the posture of, “This can’t possibly be true. I’m sure what we’ve heard is wrong, so we just want to give you a chance to explain yourself, because I’m getting calls from the press.” I did kind of light a fuse. I said, “I think I have 24 hours to respond or the press is going to run with this, and it’s not going to be good for your book.” So I confronted her with the information I had, and she said, “Well, actually, all that’s true, but I think you should still do the book.”

Megan: Wouldn’t that be nice?

Michael: Yeah, wouldn’t that be nice. I said, “Whoa.” My head was reeling. I never imagined that. As we flew back to the office, my boss said to me, “How many copies do we intend to sell?” I said, “Well, we have in the budget a couple hundred thousand.” “And what did we pay this author in a royalty advance?” I said, “About a million dollars,” which was a huge, giant royalty advance for us in those days.

He said, “Well, I don’t know that they’re going to be public with this, and I don’t know if it should be an issue.” He’s basically talking me into it (I happened to be the publisher) of why we needed to go forward with this project. I said, “I don’t think I can do this.” He said, “Well, let me tell you something. Why don’t you take 24 hours and think about it, because there’s going to be an enormous cost to the company to pull the plug on this book. I think we can work around this.” I said, “Wow.”

I can distinctly remember going home that night and going for a long walk with Gail and saying, “Honey, my conscience will not allow me to do this. I cannot publish this book. I have to just pull the plug on it, but I think I might lose my job if I do this, because I’m not sure my boss is willing to flush a million-dollar advance, plus the books at the printer, and we have a couple hundred thousand copies in our projection for our division this fall.”

She said, “Honey, you’ve got to follow your conscience. This is one of those times where if you just cave in, it’s not going to be good. You won’t be able to live with yourself, and it’s going to impact your culture and everything else.” So I went back to my boss and said, “Look. I’m not trying to grandstand here, but we have to pull the plug.” I said, “If you decide to go forward with the book, then I’m going to have to resign for the sake of my own conscience.”

Well, that blew his hair back, and he said, “Oh my gosh. I think you’re grandstanding here. I don’t think this is that big of a deal.” I said, “Well, I do think it’s a big deal. This is a huge deal. This is an ethical breach. It’s immoral behavior, and I can’t publish the book and give this author a platform.” He said, “Well, I have to think about that. I don’t know what we’re going to do.” I went back and literally told my assistant, “I think I’ve just lost my job. I think we need to start packing my office.”

The funny thing about it was my boss’ boss heard about it in about 30 minutes. He called me on the phone and said, “Explain the situation to me.” I explained the situation to him, and he said, “You’re absolutely doing the right thing. I support you 100 percent.” That was a “bet your job” kind of moment, and I was terrified as a result, but I had to count the cost. The cost in that situation… Yeah, I might lose my job, but I didn’t want to lose my soul in the process. I didn’t want to lose my own integrity in the process, so I just had to do the right thing, not the thing that would have garnered the performance for us.

Megan: Similarly, if you’re in your own business, this could mean tanking your revenue in a short period of time. If you lose, for example, a high-performing salesperson or marketing person, there could be a real hit in the short term to your revenue. You have to count the cost of that but then hopefully be willing to take whatever action is necessary to be in integrity regardless of the cost.

Michael: The funny thing about it was after I made that decision… I had no idea of how consequential it was in the moment. Of course, my entire team found out about it, and they were so proud that I had done that, because they all knew it was an ethical compromise. It became part of the folklore of our company, and it became kind of an example of the importance of making difficult decisions when it might cost us on the performance side.

Larry: I think it’s a good example of the fact that core values look good when they’re hanging on the wall. They’re very difficult to enact in a real-life business situation.

Well, the first action is get clear in your own thinking. The second action is count the cost. The third action in confronting a high-performing, bad-behaving team member: secure your supervisor’s support.

Michael: In that last example, I wasn’t really able to do that. I didn’t want to go over my supervisor’s head to his boss who ultimately supported me, because I had no idea that he would ultimately support me, so the chain of command was to do what I did. But, man, if at all possible, you need to try to secure the support of your supervisor and not surprise them. I’ll give you another example. All of these examples are flooding into my head. I have a lot of experience doing this.

I had an employee who was working for me in my division back when I was in the publishing business who was caught viewing pornography on his work computer. What I didn’t know at the time (he didn’t report directly to me; he reported to somebody else) was his supervisor had given him a written warning and reported it to HR and it just didn’t make its way up to me, but this person was already on probation. The stupid thing was he got caught again.

Megan: You’re just kind of like, “Idiot.”

Michael: I know. Like, what part of this doesn’t…? Obviously, he had a serious addiction. So, now I’m brought into it, but here’s the thing. I didn’t take what ended up being a termination action, and this guy was really a great employee, but I didn’t have to secure my boss’ approval. I informed my boss of what was going to happen, got total support there, but I went to HR, because I wanted to make sure I had all of my ducks in a row, that I followed this in a way that would reduce the liability of the company, because I didn’t want to get sued for wrongful termination. I was pretty sure I was in the clear.

Here’s the thing. You don’t want to terminate somebody like this and surprise your boss or surprise HR or surprise your lawyers, because there may be some nuances to this that you need to follow, like in documentation, or whatever, so that the employee couldn’t come back and say, for example, in this situation, “That’s totally baloney. That didn’t happen. I reject that.” So we made sure we had all of our ducks in a row. The odd thing about that was this person who had now been caught twice using their computer to view pornography… By the way, they were in a cube. They weren’t in a private office, so anybody walking by could see it.

Megan: Again…

Michael: Right? I know. It defies imagination. But that person begged for their job. That’s the only time I’ve ever had a person beg for their job. He said, “You can’t fire me. I will never be able to face my wife. I will never be able to tell her what has happened.” In that moment… I didn’t want to be callous, but I just said, “Buddy, you should have been thinking about that a long time ago.”

Megan: Not my problem.

Michael: That’s not my problem.

Megan: You’re not always going to be able to get the support of your supervisor. There are going to be times when you’re going to have to take a stand they don’t agree with, and you’re going to need to terminate someone, for example, and they’re going to refuse to allow it, if you need their approval. In that situation, kind of to our previous action of counting the cost, you may have to resign or at least be willing to resign.

That’s where this whole integrity question, kind of rubber meets the road. You need to be realistic about that too. Sure, you’d like to have the support of your direct supervisor. You’d like for it to be able to be peacefully resolved between the two of you (it’s unlikely that it’s going to be a peaceful resolution to confronting someone who’s working for you in this situation), but it’s not always going to happen, so you have to be willing to take the hard line if it’s necessary.

Michael: I guess we have to ask ourselves what our integrity is worth. Mine isn’t for sale.

Megan: That’s right.

Larry: The third action is secure your supervisor’s support. We might also say “Follow the protocols of your company and your HR procedures.”

Michael: Yeah. Don’t just go out there and be a gladiator and vanquish your foes, but make sure you have the support of the people who need to be in support so they’re not surprised. I’ve found that, generally speaking, leaders don’t like to be surprised. If they know what’s going down, they’re good with it.

Larry: Action four: confront the bad-behaving employee.

Michael: I think the first thing is you have to be calm. You don’t need to escalate the situation by not being calm. You need to be very objective and very factual. In some situations, depending on the behavior, this calls for immediate termination. There’s no negotiation. There’s no apologizing that can be done. They’ve crossed a line that requires their immediate termination.

Megan: By the way, we should say if you’re dealing with a situation that is that severe, you need to involve HR. There’s probably formal documentation that needs to happen. You’ll need to be prepared when you confront that person with talking points that HR has spoken into that are related to that documentation. You’ll need to have other documents prepared. This is not a situation that you want to catch somebody in between meetings and have this conversation.

This is a thing that needs to be well choreographed, and it may take you a day or two to get your ducks in a row with HR. Don’t try to just go rogue and figure it out yourself, because you’ll either handle it improperly and expose yourself to legal action on the part of the employee you’re terminating or you’ll not act strongly enough and put your other employees or the company’s brand and reputation at risk. There are some specific concerns and considerations that HR can advise you on, and it’s important to take their counsel in this situation.

Michael: You can’t underestimate how anxious you’re going to be in this situation or how fearful you’ll be yourself when confronting somebody, because nobody likes to do this. Any normal person doesn’t like to do this. That’s the value of having talking points, too. The way I can remain calm is I know exactly what I’m going to say first, what I’m going to say second, what I’m going to say third, and so forth.

By the way, we did a whole episode on this, but one piece of counsel I give here, in case people haven’t heard that episode about termination… One of the things I always do is start with the conclusion, because I want this to be a nonnegotiable. “We’ve made the decision to terminate you, and here’s why.” Then I launch into it, and I don’t get into a lot of rationale or feel like I have to justify it. The decision is irrevocable. I’ve made the decision, and we’re going to move forward on it.

But there are situations where it doesn’t rise to that level. It doesn’t rise to the level of termination, like a situation like disrespect. I had another author one time who gravely disrespected somebody at my company by something they said. It left the other person in tears, and I had to call that author and say, “Look. If we’re going to move forward, this is going to require that you apologize. You’re going to have to apologize to that employee to their satisfaction, and they have to report to me that you did that or else we’re not going to go forward with this book deal.”

Actually, that has happened a couple of times. Fortunately, in one case, they were willing to do that. They were willing to make the apology and set things right, and we were able to move forward. It may be a situation like that that could be remediated, but not always. If it can, awesome.

Megan: That’s what you hope for.

Michael: But they need to back up. You can’t sweep it under the rug just because they’re a high-performing employee or vendor or customer. That can happen in a context where a customer would be disrespectful to somebody, and you just have to say for the sake of your team… By the way, I always value my team over my customers.

Megan: Oh my gosh. Yes. Every time.

Michael: Some people say, “The customer is always right.” No. My point of view is my team is always right, and my point of view is my team takes care of the customers so the customers take care of us, but I never get that reversed. I can go find different customers, but my team must be respected. I’m always going to make a decision in favor of my team on that.

Larry: I have a question for you on this confrontation issue. You mentioned some things are immediate termination. They’re just that serious. Other things may call for an apology. What about things that don’t rise to the level of immediate termination but maybe are patterns of behavior? How hard do you work to remediate the character or the conduct of a high-performing team member? Do they get to apologize every Monday?

Megan: No. I would say this: I’m not going to remediate character. That’s not my job. If you have a character problem, that’s going to end in your either immediate or eventual termination. By “eventual” I mean we’re going to document it to the point that it has risen to a level of severity that we can reasonably terminate you, or it might be an egregious action. If you have performance issues, we can coach you on that. If you have the aptitude, we can bring you along, but character, like honesty… I probably can’t really help you develop honesty.

Michael: “Could you be a little more truthful?”

Megan: That was kind of elementary school stuff. If you’re just not self-aware, that might be a skill we could work on, but if it’s really a character issue, like integrity or honesty, forget it. That’s going to lead to termination in the end, because that is in violation of our core values. But I do think there are situations where there are character violations or character issues that are not so egregious that it would be advisable to terminate immediately, and that’s when you enter into either a probationary period or a period of HR documentation, where you’re documenting infractions over a period of time just to cover yourself legally.

We’ve had situations like that that have happened, certainly on the performance side and, to a lesser extent, in these kinds of areas. It’s really important to document. You want to go through an HR process. By the way, even if you immediately terminate someone, you should consult HR. Otherwise, you’re going to terminate them and you have no plan for how to get their technology back, how to get a severance agreement signed, all of the legal considerations. You don’t just want to fly off the handle.

Michael: Yeah. When we say “immediate,” we don’t mean the behavior happens and you just go as a lone ranger and make a decision.

Megan: You may even need to investigate. That may even be part, depending on the circumstances, of getting to a termination.

Michael: I want to hitchhike on Larry’s question and ask you this question. It’s like “Stump the Band.” Just imagine there was a supervisor who kind of had this annoying behavior of being very dismissive of what his teammates would say and would often embarrass them in meetings or just, like I said, be dismissive about their comments. Is that, in your view, something that would require coaching versus termination?

Megan: In that situation, I would try coaching first.

Michael: Because it might be a lack of self-awareness.

Megan: It might be a lack of self-awareness. That, to me, is very different than dishonesty or other integrity violations. That could be that you need to develop your skills in that area. Now if I encountered resistance when I went to that person and brought it to their attention and they weren’t willing to participate in coaching, now we have another problem, but if they’re willing to participate and I see results, then we might get some traction there.

Michael: The reason I ask is because I had another employee who was similar to this. This was a supervisor who reported to me. I started getting her people coming to me complaining about her authoritarian, demanding, overbearing, micromanaging style. So I actually confronted her on this and suggested that we go through a whole series of 360 exercises so it could objectify and prove to her that she had an issue. So we did that, and then as we were about to discuss the results with a consultant, she resigned.

Megan: Wow. That tells you a lot.

Michael: Yeah, it tells you a lot right there.

Larry: This brings us to the fifth action, which is explain your actions to the team.

Michael: This is important, because in a vacuum, people will make up a narrative. We always try to explain things. Somebody is one of your highest performers, and they suddenly depart the company or you fired them, you might be tempted to not say anything about it, because maybe you want to not gossip or you don’t want to violate that other person’s whatever, but eventually it’s not a service to your team.

You don’t have to go into a lot of detail, but I think you have to make it crystal clear as to why they were fired. It sends a signal to your team, which is good, and I think it also helps your team understand what you’re willing to tolerate and not tolerate, and it’s really good for your culture. Now, Megan, when we did that situation you were talking about, where we had to terminate somebody because they violated one of our core values, talk about how we dealt with that with the team.

Megan: This is tricky, because you’re probably going to get guidance from HR to say almost nothing. HR is always in the risk management business, which is good. That’s an important perspective to consider. The problem is it’s not always what’s in the best interest of your culture, so you have to balance the tension of those two things. We had to do that in our situation as well.

In our situation, I got the team together and, at a high level, explained what had happened. Again, not in great detail, not for the purpose of embarrassing the person who was fired, but for the purpose of illustrating our commitment to our core values and what we would and would not tolerate. So, really, it was about what our norms are behaviorally in terms of conduct, and so forth. I think that’s really important, because what you don’t want people to think…

There are two dangers here. One is that people think you don’t really take this stuff seriously, if you don’t talk about it, and you’re kind of dismissive of your values. You’re out of alignment. Or they think you’re rash and just firing people for seemingly no reason. All they know is this person was producing great results, and it doesn’t make any sense, and if you’re willing to do it to them, maybe you’re willing to do it to other people, and there’s no rhyme or reason to it. It creates a real sense of insecurity for people.

So we use that opportunity to say, “Here are the circumstances under which we will terminate people. If you are not finding yourself in one of these situations, you will not be surprised by a termination. If there is, for example, a performance issue, that’s not going to result in immediate termination. You will not be surprised. There will be a process of coaching and development that we go through with you to try to get to a place where you can stay with the team. You don’t ever need to be worried that you’re going to just be dismissed randomly or in a way that would surprise you.”

I think that’s part of what you’re doing. You’re trying to affirm the security of other people’s position. You’re trying to affirm your commitment to your core values and underscore the trust people have in your leadership.

Larry: Well, today we’ve learned that, as a leader, you must confront the high-performing but bad-behaving employee, and there are five actions you can take in order to accomplish that.

1. Get clear in your own thinking.
2. Count the cost.
3. Secure your supervisor’s support. Or we might say, act within the guidelines of your human resources department.
4. Confront the bad-behaving employee.
5. Explain your actions to the team.

Parting thoughts today, guys? What’s your final word for our listeners?

Megan: These are really hard situations when they come up, and if you feel kind of overwhelmed or have internal conflict about it, that’s normal, but err on the side of your integrity, even if it costs you in the short term. You’ll never look back and wish you’d done anything differently than that, but if you make an expedient decision, it’ll haunt you for years to come.

Michael: I have nothing to add to that. That’s perfect.

Larry: Thanks for giving us practical advice on a really tough subject today. Very helpful.

Megan: Thanks, Larry.

Michael: Yeah, thanks, Larry. And thank you guys for joining us on Lead to Win. On a personal note, during the month of July I’ll be practicing what I preach and taking a personal sabbatical, but not to worry. We have our greatest hits from the last two years queued up for the month. I know you’re going to enjoy these encore episodes, and we’ll be right back here on August 6, God willing, with a brand-new show. Until then, lead to win.