Where do leaders spend their time?

Earlier this month in a presentation to clients who were made up of business owners and leaders of small and large organizations, I used the following quote to drive home the impact of poor performers on their bottom line.

“The top 16% of employees generate 60% of revenues; the bottom 16% cost the company 20% in revenue.” (Financial Post, May 2009).

My clients immediately resonated with this. But there is another powerful message wrapped up in that simple quote that I went on to share that I now want to share with you. 

I call it the 10-80-10 rule and it works by breaking down your staff/employees into three groups.

First, roughly ten percent of your employees fall into the highly engaged, high performer category. These employees are the ones who you don’t need to spend too much time with as they are always doing great work that has a positive impact on your bottom line. I call them your Superstars and you would always love to have more of this type. How do you know if an employee is a Superstar? Put it this way, if he or she surprised you by giving you their two week notice, you would have a tough time sleeping that night, wondering how you would replace such a great employee.

Next, Roughly eighty percent of your employees fall under that category of good employees. They do good work, are good with clients and for most part they do not cause you or their fellow employees too many problems. Many of the employees in this group are happy with their role. They will not always go above and beyond their day-to-day job description, but their performance is adequate and valuable to your business.

The third group, the remaining ten percent of your staff are the exact opposite of the top ten percent. These people do keep you up at night, create stress for you on a regular basis and impact your bottom line in a negative way. Chances are you have had multiple performance-based conversations with this group due to customer complaints, low quality of work and the endless conflict they create with their fellow staff.

Now here is the question I always put to my clients after I explain the 10-80-10 rule of thumb. As a leader or business owner, where do you spend most of your time?

Just about 95% of the time the answer is the bottom ten percent. Incredible!
What this means is that as a leader, chances are you are spending most of your time with staff who do not contribute to the success of your business. Think about that. As a leader your most precious commodity is your time and look how much of it you spend dealing with poor performers.

Now here is something else to consider. While you are spending a large part of your time with the underachieving bottom ten percent of your workforce, what do you think your top ten percent, the superstars are thinking? Trust me, great employees appreciate great leadership. Your best employees want quality time with you. If it is not there, and they see you spending a lot of your time with the bottom ten percent, many will consider a job somewhere else where they can get great mentorship and leadership to help them achieve their career goals.

One more important piece to consider as well. While you are spending your precious time with the bottom ten percent, what happens to the eighty percent group? This is a group that does good work, but they are also easily influenced by the actions of the bottom ten percent. When you are always dealing with performance issues and conflict with the bottom ten percent of your staff, it literally pulls a large part of the eighty percent group down.

The answer? Stop trying to fix the bottom ten percent! It is time to let them go. Begin the process of ending their employment as soon as possible and start spending your precious time with your super stars. An added benefit is that the eighty percent group will now be influenced by your best employees, ensuring that the majority of your workforce are taking their cue from people who make it easier for you to sleep at night.

Good luck!