Columns

Are there saboteurs in your company?

BY RICH SCHMITT
Management specialist

I just returned from a trip. As many of you know, travel is a lot less fun than it once was. This outbound trip was “enhanced” by problems with the aircraft — actually two aircraft with mechanical problems.

As I think back, I wonder if it was tempting fate to get onto the third plane. As a regular traveler I have seen my share of service problems, but seldom has the situation been handled as badly as this most recent experience.

The gate agent announced, “Your flight is going to be delayed and we are waiting for a plane to be delivered from the hanger. You can probably expect to leave 45 minutes late if our partner airline isn’t any more screwed up than it was yesterday. With all our layoffs and station closings, things are not working that great. If I were the ceo we would surely fix a bunch of these things. I think I really ought to retire. Our partner airline is messed up. We’re probably going to dump them as a partner soon since this happens all the time. The second plane has a bunch of seats that are out of service so I am looking for volunteers to take a later flight.” (This was a quick synopsis of the announcements that were given over a 30-minute period.)

A young couple stepped forward volunteering to be “bumped” to a later flight. They were delighted at the prospect of getting vouchers for two round-trip tickets. The gate agent then decided to give them an extra pair of round-trip tickets to further punish the airline. He probably gave away the profits for the entire flight with his grand gesture and sullied the airline’s reputation in the process.

The whole fiasco reminded me of several stories from in and around our industry where individuals hurt their company and created a negative atmosphere within the company.

A wholesaler was having margin problems so he raised the prices on some of his products. In good faith, he announced the changes at a sales meeting. One salesman decided that the increases were not associated with a manufacturer’s price change and, therefore, not fair. His confused loyalty to his customers compelled him to inform each of his customers about the increases to rally their rebellion. He wanted to prove that he alone controlled the customers and also wanted to ingratiate himself to his customers. It worked. His customers’ complaints caused the wholesaler to pull back the pricing for that salesman’s customers. Surprisingly, other customers didn’t notice or object to the increase since their pricing was still quite fair when compared to the market. Having a big bunch of customers excluded from the increase made it another tough year for the wholesaler.

At another wholesaling operation, a counterperson noticed that the margin was robust (meaning greater than 25% — the “standard” endorsed by counter staff throughout our industry). He immediately said, “Let me see if I can do a little better with the price.” The customer had not complained. The margin was surrendered without any kind of pressure from the customer. It was no wonder that customers wanted to wait in line for “Easy Eddie.” It wasn’t that he was fast or accurate. He just loved to give the company’s money away in order to make friends.

Another wholesaler had a guy who treated customers with contempt to their face. He reminded the customers that he, once again, had saved their bacon and reiterated how smart he was and how dumb they were. Behind their backs he denigrated them and called them names that I cannot repeat in this column. In addition to the obvious damage to customer relationships, he set a terrible example for the other employees. This is arrogance at its very worst.

Another wholesaler had a guy who felt obligated to treat less-senior employees with disrespect. He trained new employees using a process that resembled a fraternity hazing ritual from back in the “good old days” before universities outlawed them. He insulted, embarrassed, offended, harassed and berated new people under the guise of “we all came up the same way.” The problem was that only the stupidest new people put up with his treatment. They could not “cut it” anywhere else so they tolerated the shabby treatment, knowing that they would be dishing it out in a couple years themselves.

At another wholesaler, a guy thought he was so important that he could create “backwash” as he did his job. Backwash is the extra work created by someone who does his job wrong or incompletely. He didn’t note the serial number when he shipped a water heater. Someone else had to track down the serial number and get it connected to the proper invoice to complete the transaction. He would accept a return without processing the product so the product would sit in the counter area until someone else dealt with his backwash. These guys play the odds. They know that only a portion of their backwash finds its way back to them. In the process they create additional work for the company and their co-workers.

Finally, one more from my personal experience. Long ago, I had a summer job as a ditch digger working for our local gas company. Another kid and I arrived each morning at 8:00 to work with the regular crew. We learned real quickly that the pace was not going to be challenging. We learned that the crew took its morning “break” until about 9:00 then we went to the jobsite. They dropped us off to dig a hole and told us that they would be back for us at 11:30. We told them that the hole should only take about an hour. They told us that it was a “2 1/2-hour” hole and they would get us at 11:30 so we could get back to the shop for the prompt start of our noon lunch hour. The breaks and lunch hour were the only prompt activities during the work day. The afternoon pace was pretty relaxed until about 4:30 when the crew would take something apart so it would require overtime (paid at time and a half) hours to get the situation resolved. The senior guys were great at helping us learn how to work a minimum amount and game the system.
I know these are a lot of examples, but they may help you to recognize saboteurs and traitors in your midst. These are strong terms, but it is important to understand that these people within your company are not benign. They are a sort of harmful hat-trick:

• Their actions are often directly damaging to the company. They cost the company profits and increase expenses through their actions or inactions. They often damage relationships within the company and with customers.
  
• They serve as a bad example for their peers who propagate problems into other areas of the company.
• Their bad behaviors infect others.
  
• They are demoralizing to the hard-working people who care about their work and the company. That the owner would allow this to happen is one problem, but these are the people who also must deal with the backwash which adds insult to the injury.
  

So what is the prescription for this common malady? While corporal punishment is not advised, these problem people do deserve strong feedback from others on the team both workers and management.
First, learn to identify the warning signs. The examples above should alert you to some of the symptoms for the most common situations. There are certainly many others. Then you must take action to deal with the problems. Some of these situations have been festering for years so they may require some time to get resolved. (Since the labor laws are constantly changing, it is critical that you review any actions with your labor attorney.) When you find yourself using one of the following excuses, you are probably masking the problem instead of directly addressing the problem within your company:

• “But it’s only a couple of years until he retires.” While you may rightfully feel an obligation to long-term employees, you do not owe them the right to damage the company. They must be in contributing roles or be moved to a job where they can contribute. Further, it is proper to adjust their compensation to reflect the reality of their contribution. I know this is tough but you want to be fair to the employee, other employees, the company and the shareholders. In the worst case, where you feel an obligation to someone who is an embarrassment to the company, consider working with your human resource people and labor attorney to retire them early or to have them work from home. Obviously, you must be aware of setting a bad precedent but there are typically ways to accomplish your objectives fairly and compassionately.
  
• “He’s an SOB but the customers really like him.” In some cases, customers “like” or tolerate him because he gives stuff away. It is certainly not because they enjoy shabby treatment and bad service.
  
• “He’s family.” Family should be exemplary in their attitude and actions. When that is not the case, it must be dealt with quickly and directly.
  
• “He has personal/family problems.” Many companies in our industry are like families so there is some empathy and accommodation of personal issues. I think this is what makes those companies great places to work. That said, it is important that is not be taken too far. I favor an approach that explicitly lays out what accommodations are being extended to the individual so everybody understands what is happening. Obviously, there are privacy issues to consider, but when situations are handled above-board they tend to have better outcomes.
  
• “He has substance problems.” Substance problems are really tough. I don’t think you can compromise regarding an employee coming to work or working under the influence. I think that your liability would be staggering if you allow this behavior and there is an accident. I don’t think you can compromise when the substance problems lead to theft or fraud. These are, within the constraints of your laws, one-strike-and-you’re-out type actions. One wholesaler suggested that an employee had only stolen about $50 so they were going to forgive him. We suggested that they publish this policy in the employee handbook since some less enterprising or more honest employees might not be stealing their fair share.

I always recommend a process wherein you are working with the individual to have them change from a negative influence into a contributor. This process includes discussing the unacceptable behaviors, getting the individual to list the changes he will make, getting a personal commitment from the individual to change and having a set of measures and milestones for you and the individual to monitor the progress being made. Generally, the milestones should be in days and weeks so you can immediately see that the changes are progressing as promised. Some people will accept the new direction and change while others will choose to change companies. Either way, the result is better.
Remember, these people are not benign. When other members on the team are working hard to serve customers and to eek out fractions of margin points, these saboteurs are harmful to the company and demoralizing to the productive members of the team.

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