If you were a general manager trying to build a championship sports team, would you intentionally stock your roster with mediocre players?
No way. You'd never stop searching for the best people you could find.
I've had hundreds of employees, many of whom are among the best in the industry and consistently deliver great results. They are the engine behind our success.
Conversely, there have been employees who were negative, unproductive or unethical. We've immediately removed them from our team.
The challenge is what do to with mediocre performers: people who are friendly and show up to work on time but who perhaps make a few too many mistakes, or just never seem to shine.
Most people have untapped talent, so with consistently mediocre employees, we often offer them training or try and find them a niche where they can thrive.
But when that doesn't work? It's usually time to make a change.
Firing someone isn't easy. But there are many reasons it can be the right thing to do.
First, you're trying to win a championship. If you're the GM, all things being equal, it's not fair to management or the high achievers on your team to surround them with mediocrity.
Second, think of your clients.
Your clients are your fans. But unlike fans of a sports team — who may be passionate about the entertainment sports provide — we're in the situation of managing the life savings, investments and retirements of our fans.
The stakes are incredibly high, and our fans deserve to be serviced by people who will always make a great impression and keep mistakes to a minimum.
Lastly, accepting mediocrity is, I believe, bad for the employee.
Why? Lots of people float along for years in jobs they don't love, paralyzed by inertia, and never find a career they're passionate about.
Years ago, I hired one of my closest friends because I thought he had the skill set to do a great job. He'd been a success in almost everything he'd ever done. After a year, I had to take him to lunch and let him know that I was letting him go.
He's gone on to do great things, and we're still friends to this day. But for numerous reasons, our firm just wasn't the right place for him to thrive.
Firing people is hard. And I'm certainly not trying to sugarcoat it by saying that you're always doing them a favor. Although you might be.
But what is undeniable is that if you allow mediocrity to define your business, you aren't doing yourself, your firm, your team members or your clients any favors.
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When you let someone go, be gracious. If possible, provide severance that is higher than industry norms, and maybe even help them find another job.
Explain to them that it could be the beginning of something better.
In the end, great partnerships, best-in-class service, savvy marketing, and attracting and retaining the best team members you can find are the key components of thriving organizations.
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Scott Hanson is co-founder of Allworth Financial, formerly Hanson McClain Advisors, a fee-based RIA with $4.5 billion in AUM.