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My client just costs themselves $350,000 by promoting the wrong person.
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Again, if you've ever promoted your top salesperson to sales manager and watch them crash
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and burn or giving your longest ten-year employee a leadership role only to see half the
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team start looking for new jobs, this episode might save you from making that same expensive
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mistake.
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Here's what nobody talks about.
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Some people are just not wired to lead.
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And that's completely okay, but the cost of not acknowledging this reality and letting
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ineffective leadership drag on, it's massive.
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The other side of this coin is we keep promoting people for the wrong reasons.
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We reward performance instead of leadership DNA.
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We promote performance instead of capability, performance, and DNA.
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And we convince ourselves that someone will step up when we know they probably won't,
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and while we're waiting for that magical moment for them to become the leader, we need
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them to be.
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We're bleeding talent, momentum, morale, and profits.
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And that is why today we're talking about how to stop making these expensive mistakes
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and what to do if you've already made one like my client did.
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Make sure to stick around to the very end because this episode is jam-packed with tangible
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advice to grow and scale your business and have the freedom you started it for.
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[MUSIC]
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Welcome to The Biz Doctor Podcast, my love letter to business owners the world over.
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I'm your host, Lauren Goldstein, award-winning business consultant and advisor,
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fondly nicknamed The Biz Doctor by my clients.
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I help business owners who are burning the candle at both ends, diagnosed,
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but is actually keeping them buried in the day-to-day busy work.
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And then formulate a treatment plan to adjust their business and team to fit them.
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So they can take a breath and a vacation and have more fun making a bigger impact than
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ever.
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So grab your favorite beverage and your earbuds and let's dive into our latest episode.
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[MUSIC]
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Look, I get it.
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Promoting from within feels right.
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You want to reward loyalty.
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You want to believe in people's potential.
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And honestly, it's often easier than going through the whole hiring process to find external
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leadership.
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But here's what I've learned in 14 years of working with business owners.
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There's a massive difference between wanting someone to be a leader and them actually having
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the DNA to lead effectively.
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Let me pull back the curtain and tell you what happened with my clients, $350,000 promotion
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mistake.
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Earlier this week, I was on an exit interview call with an employee leaving their team.
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By the end of our conversation, four things were crystal clear.
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He was an A-player stuck in a worker B-roll.
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He wasn't set up for success.
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He tried for 18 months to make it work.
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And his manager was 95% of the reason he was leaving.
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His exit wasn't about money, benefits, or workload.
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This guy was leaving because he was a player stuck under a worker B-manager that was killing
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his soul one micro-managed project at a time.
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Let me pause your first second in case you're new to the podcast and do not know about my
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philosophy on players versus worker bees.
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Let me explain the critical difference because once you know this, it will change everything
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about how you manage your team and how you look at who's on your team.
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So players create profits.
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Players are expenses.
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A player comes with a plan.
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They're the people who get the big picture, the greater vision.
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And you say, "I have a goal," and they say, "Great, I have a plan."
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They're proactive, they run with you, and it's so much fun because they're even starting
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to anticipate things before you even think of it.
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I love it because they're the expert coming to you.
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Instead of on the other side, when you have a worker B, you're often thinking, "Switch
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Jesus, if I have to tell you what to do one more time, I might just walk out the door."
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Most worker bees struggle with critical thinking or thinking outside of task lists.
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They get stuck in the details, and they do work best with tasks instead of projects.
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They also tend to not be self-motivated, so you end up doing two people's jobs, yours,
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and then thinking of things for them to do.
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And when I see self-motivated, yes, a lot of them are hard workers.
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That's not what I'm saying.
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When I see self-motivated, it's about looking for other things to do outside of what you've
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been given to do.
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I'll give you a great example.
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Many years ago, I came in and I did a diagnostic in a financial services firm.
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And as I was interviewing the team, I asked one of the employees, "Hey, when so and so has
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not given you stuff to do, and you've completed your to-do list, tell me what you do with your
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time."
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And she said, "Bless her heart."
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Oh, you know, I go on Facebook and Instagram, and I'm working on my real estate license, so
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I go and I do some modules for that.
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Bless.
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I mean, on one hand, I love that I'm the kind of person that people tell their deepest,
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darkest secrets, too, but on the other hand, you're kidding me.
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Instead of thinking of things that you could get ahead of, or other projects or tasks to
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do, this person was screwing around on social media and doing something completely unrelated
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to her job.
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This perfectly illustrates a worker bee.
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Now it might seem like I'm hating on worker bees, but I'm really not.
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I love worker bees, but here's the thing that I want you to take away from this.
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Workers are necessary on teams, but only if here's the key, you have players managing them.
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You, as the business owner, should never be managing a worker bee.
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So back to my client.
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One exactly happened here.
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Well, long story short, they put a worker bee in charge of a player.
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To put it bluntly, they committed organizational suicide.
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The cost over 18 months with just this one departing player was $350,000.
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But if you multiply that across team morale, productivity loss, frustration, other people
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who are now questioning whether they want to stay, you're looking at the kind of damage
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that could take years to recover from.
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And the worst part, my client had promoted this person's manager, hoping that they'd step
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up and grow into the role.
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Have you ever done that?
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I know I have.
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That was until I figured out how to promote the right way and then everything changed,
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which is what I'm talking about with you today.
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Let me go back to that exit interview I mentioned before.
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This wasn't about pay, workload, or even the leadership culture at the top.
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The reason this player was leaving came down to a few catastrophic leadership failures of
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his manager.
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Lack of trust from his manager, feedback that ever came, concerns that went unaddressed,
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promises that quickly disappeared, and a manager who stifled growth instead of developing
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a leader.
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But here's the one thing that truly broke the dam, the Cardinal Sin.
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The manager delegated a project to him, told him he could lead it, and then took it back.
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Never actually letting him lead it.
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And it didn't just happen once, it happened over and over and over again.
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So when I asked this person, he was leaving on a scale of one to ten, how well were your
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strengths utilized?
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His answer was a two.
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A two.
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That's not just a miss, that's a red flag waving in neon lights.
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This kind of Indian giving behavior kills motivation faster than anything.
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This manager's micromanagement conflicting messages about ownership and completely opposite
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personality style created the perfect storm for disengagement.
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Here's the expensive reality.
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My client had a manager that they wanted to succeed, but the truth was this person was
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not cutting it, and leadership was abdicating their responsibility as a leader.
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They kept hoping this manager would step up.
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They heard the employee's concerns, but didn't actually step in to address the issue with
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the manager.
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They ostriched for 18 months, hoping things would improve, and then the dam broke.
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This is what I call leadership abdication.
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When we as business owners avoid making the hard decision about who can actually lead,
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so we either promote the wrong person or keep waiting for someone to become something
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they're not.
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And the cost?
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It's not just theoretical as you saw.
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This one was a doozy.
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At $350,000, with just one employee.
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Multiply that across your team, and you start to see why getting leadership right is an
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optional.
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With that in mind, let's talk about who you need to stop promoting.
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It's possible I'm going to step on some toes here, but someone needs to say this.
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First, the golden child, your top performer, your star salesperson who crushes quotas,
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your tech genius who knows the system inside and out, here's the painful truth.
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The skills that make someone excellent at doing the work as an individual contributor
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are completely different from the skills needed to lead people who do the work.
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I've watched super stars become mediocre managers and lose both their individual contribution
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and their leadership effectiveness.
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And oftentimes your stars burn out and leave because they never should have been promoted
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in the first place.
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It's the lifer, the person who's been there for, well, forever.
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Ten-year equals institutional knowledge, not necessarily leadership DNA.
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Just because someone knows where all the bodies are buried doesn't mean they can lead the
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living.
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I've seen companies promote tenure veterans who still manage like it's 2015, driving away
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a younger talent who feels stifled or in the case of one of my other clients, promoting
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a lifer who actually really didn't like people.
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That was a doozy.
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The Peacekeeper.
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Everyone's favorite person who never creates waves.
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Here's the thing, leadership requires making unpopular decisions and having difficult conversations.
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And frankly, it's uncomfortable.
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Peacekeeper's avoid conflict, which means problems fester and standard slip while your players
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get frustrated watching media accuracy get rewarded.
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The expert, your technical genius.
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Management isn't about being the smartest person in the room.
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It's about developing other people to be smart.
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These folks often get frustrated when their teams can't perform at their level and end up
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micromanaging or doing the work themselves because their ego can't take it.
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Hello, this is definitely the persona of my client that I am talking about in this episode.
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The climber.
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The person who wants it most because they want the title and the quote unquote respect.
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Ambition doesn't equal leadership DNA.
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Some people want management for the wrong reasons, the title, the money, the status.
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But if they don't have the natural ability to understand, coach, influence others and
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develop people, all that ambition turns into frustration for everyone.
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Now before we dive into the next section, here's an important caveat.
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I'm in no way saying that you should promote your mediocre performers or not promote
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someone who is a high performer.
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That is not what I'm saying.
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I'm saying that you get to promote performance and DNA.
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Now that you know the five risky profiles, let's talk about what real leadership DNA actually
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looks like because it's not what most people think.
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Real leadership DNA comes down to two core elements that you can't teach or fake.
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First, they understand that the number one job of a leader is to create other leaders, not
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manage people, not delegate tasks, create other leaders.
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That means they're actively developing critical fingers and problem solvers, not just telling
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people what to do.
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They get energized by watching someone on their team figure something out for themselves
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rather than needing to be the person with all the answers.
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Second, they have to be a world class people decoder.
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They're genuinely skilled at understanding what makes each person tick, what drives them,
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what their unique motivations are, and how to pull the best out of them.
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They don't just care about people in some generic way.
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They're curious about each individual and driven by empowering their team.
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In addition to the above, here is a simple test to gauge if someone should be promoted or
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not.
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Before I promote anyone, I ask them three specific questions and they have to answer yes to all three,
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otherwise I'm a no.
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First, do you know what you need to do to be successful in your role?
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Second, do you know what someone else needs to do to be successful in their role?
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Third, do you feel comfortable telling someone else what to do to be successful in their
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role?
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The reason why I love these questions is it tells you a lot about someone and the clarity
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necessary to not only succeed in their role but as a leader.
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The harsh truth bears repeating.
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Being a leader and a manager is uncomfortable.
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It takes finesse, mentorship, coaching, and empowering.
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It's about creating leaders and critical thinkers and problem solvers, not just managing people.
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And they have to want to do this uncomfortable work.
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So ask them directly, do you want to be responsible for somebody else's career development?
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Do you want to have difficult conversations about performance?
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Do you get excited about helping someone else succeed even when it means they might outgrow
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their current role?
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Dig deep with them.
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They need desire, performance, and DNA because without it all the leadership training in the
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world won't make them someone they aren't.
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One more quick caveat.
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Confidence and becoming a better, more effective leader can be taught and improved.
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But you just cannot change someone's DNA, which is why my contrarian hiring practice
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hires through DNA, not just resume experience.
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With my client, if we go all the way back to the beginning of this episode, no matter
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how much training coaching, etc. came from the top, it just didn't land.
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Some people just aren't meant to lead, and that's okay.
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But you and the business owner and leader have to recognize who is or isn't meant to be
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a leader.
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And if you accidentally promoted someone that shouldn't be promoted, saying, "Okay, let's
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shift.
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Here's the thing, everything is figure outable.
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And at any moment, if you need to shift, you can, and in this case, you must."
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I'll give you another great example.
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One of my clients, we were having a challenge with the team, and of course you know me.
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I always go back to the root cause, and what was the common denominator?
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And in this case, it also came back to a manager.
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Are you seeing a trend here?
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Now in this situation, there was some pretty tumultuous conflicts happening in the team.
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And it all came to a head in a pretty spectacular way that almost cost us this very valuable
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employee.
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When the business owner and I sat down and did a post-mortem of how the heck did we get
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here, what was really interesting is it came down to one of the employees who is an absolute
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stellar, amazing employee.
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And she had come to her manager, this manager in question, countless times about her concerns
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with another employee who happened to be her direct report.
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She was looking for advice, support, and it just wasn't getting dealt with.
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It wasn't getting escalated.
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It was for all intents and purposes getting swept under the rug and falling on deaf
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ears.
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So when we are doing their reorg for the next chapter of growth for this business, I asked
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my client the really tough question of, what is the cost of having this person continue
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to manage people?
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He wanted to have the title that showed his tenure and contribution, and we wanted to
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honor that, but we just couldn't have him continue to lead people.
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This particular person is invaluable to the business, far more effective as an individual
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contributor, and he would be a heck of a lot happier if he was not managing people.
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It would be a win-win, and yet my client was really concerned about how he would take it,
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which is why I think a lot of business owners don't have these tough conversations.
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It makes everyone uncomfortable.
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But that's the thing about being a leader.
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Sometimes it really sucks to have those hard conversations, but if you address it as a
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win-win, trust me.
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Everybody is going to breathe a sigh of relief.
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Okay, back to the meat and potatoes.
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Thanks for sticking with me.
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This next part is for you if you've already made one of these promotion mistakes, and now
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need to figure out how to get out of the sticky situation.
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First and foremost, if you've promoted the wrong person, if you're not, you're not the only
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one.
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I've done it in the past.
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My clients have done it.
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I feel like it's actually a right of passage.
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So if you're feeling guilty about a recent promotion that isn't working out or you're lying
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awake, wondering if you just ruined someone's career by putting them in a role they can't
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handle, I get it.
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Here's how to fix it.
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The first step is to acknowledge it.
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I think sometimes as human beings we think that if we just ignore something it will go away.
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I can tell you after 14 years of doing this, that is never true.
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It will come back and bite you in the ass faster than you realize.
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I always say that sunlight is the best disinfectant, so acknowledge it.
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Go through your team and ask yourself the question of, is this person an effective leader?
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Do I want this person to continue being a manager and a leader?
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Make really clear on if you have set them up for successor failure.
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And if they're really meant to lead and manage.
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Ask the questions I talked about a bit earlier and get clear on who might be a victim of misguided
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promotion.
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Hopefully it's only one or two people that have popped in mind that we need to address.
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Then once you know who you need to talk to, you get to steal yourself and have that hard
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conversation.
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I'm not going to sugarcoat this.
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This is the part that sucks the most.
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I saw it happen four times with one of my fractional COO clients a few weeks after they brought me
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on board.
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When I came in and did my signature diagnostic to uncover the root causes of what had
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stalled growth and was plaguing retention, I started asking questions about different
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team members and managers, really digging in and asking the question of, why did this person
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get promoted?
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The answers I got were a lot of, well, we just needed somebody or they wanted it or something
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like that.
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Just my advice, this client did what I do not recommend.
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They demoted the people without a conversation, which sucks.
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So much because demoted people rarely stay.
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So instead of having a knee-jerk, oh shit moment, I encourage you to really look at your
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people and ask how valuable is this person that you promoted?
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That probably shouldn't have been promoted.
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If the answer is very valuable, which I hope it is, then say with them and say, hey, I
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think we promoted you into leadership and management.
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And this might not actually be setting you up for success or what you want.
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So I want to have an honest conversation.
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What would a win-win look like to you and would you be okay going back to being an individual
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contributor?
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You can phrase it a little bit differently because it's not necessarily if they want to stay
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but giving them an out.
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The truth is you can't keep somebody who's an ineffective manager.
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You just can't.
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But in my experience, people who are truly valuable, who you value and want to stay will find
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a way to make it work and the shift seamless.
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There might be ripple effects or whispers, but we all have short memories and as long as
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you as the leader manage the change with transparency and respect, it's a win-win.
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I'm going to start to wrap this up by illustrating how having these tough conversations also
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staves off the silent killer of teams, resentment.
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You know my favorite saying is unshared expectations are nothing more than pre-meditated
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resentments.
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So let's take a little walk down memory lane as I tell you one last story of a client who
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was bleeding $150,000 a month as a result of promoting someone who should not have been
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promoted.
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This was a couple of years ago.
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I came into a $70 million business and did my diagnostic, sat down with the team and was
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asking one of the department heads about his day to day and how he got there.
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He shared that when he got promoted, it was unexpected.
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He kind of just ended up there.
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And he felt like he was failing every day.
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And he also felt like he wasn't getting any support, like they just dropped him in the
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deep end and hoped he could swim.
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His team was also really not doing well.
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He was not doing well and the department was bleeding $150,000 a month.
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So finally, through the course of this conversation, I got to the crux of it.
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He was resentful of everyone in leadership for putting him in this position even though
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he confessed he did want the position.
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He did want the promotion.
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He was pissed.
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And rightfully so, he got promoted without support.
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And so he got what he wanted, but it was nothing like what he imagined and he was feeling
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like he wasn't supported and he was mad.
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Now I don't often have a true hard line of someone needing to be let go unless they are
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infected by resentment.
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This is the one symptom that I will immediately fire someone for because it's very, very hard
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to come back from and it infects the team faster than Pink Eye at preschool.
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So when my client and I did a postmortem and I did their R&R, their results in recommendation,
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we realized that this person's bad management, an ill-fated promotion costs the business
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of whopping $2 million total in 10 team members.
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The crazy thing is that this business was overperforming so much in another department that the internal
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bleeding of this department wasn't actually caught until I came in with fresh eyes.
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More to that, his manager never spoke up about his resentment.
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In fact, he told me when I asked why he didn't bring any of this up to anyone beside me,
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he said he "just wanted to figure it out on his own."
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So there's a lot to unpack there.
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I won't go into it.
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But he was essentially resentful, he didn't have support yet didn't speak up.
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Oh yeah, why do we want to be business owners?
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So I tell you this story because I want you to know that it can have into anyone.
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Big, small, doesn't matter.
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We've all been there, but now you know better.
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You as the business owner need to proactively plan your team growth and promotion.
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It is so important to get clear on who is or isn't in the right seat, who is or isn't
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the best leader or manager, and to have the conversation.
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It's uncomfortable, but the pain of having the tough conversation is way better than the
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pain of regret and resentment, not to mention the literal and figurative costs.
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The other thing I want you to do that I've talked about in previous episodes is you need
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to have dual promotion tracks.
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One for individual contributors who can continue to grow, have more accountability, more
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responsibilities, and more success without leadership or management responsibilities.
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And then you create another path for leadership in management.
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Trust me, this will solve so many problems because most people want growth and recognition.
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They don't want to be stagnant, but you have to understand what kind of growth they want
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and set them up for success.
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Last but not least, going forward, I really want to encourage you to take a beat, take
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a breath, and start proactively promoting and hiring because it will change everything.
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Most business owners and in fact most of my clients come to me and aren't doing promotion
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or headcount planning proactively.
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It's all "I need somebody yesterday" and that is a recipe for mishires, misaligned expectations,
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which you know leads to resentment, and simply put not having the best people you need.
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Now in case you, like me, still worry about how this will impact your team or owl, here's
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something else nobody really talks about.
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It isn't cruel to not make someone a manager or a leader.
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The person you don't promote to leadership, they get to stay in their zone of genius instead
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of struggling in a role that makes them miserable.
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Your team gets actual leadership instead of someone flailing around and you stop bleeding
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money and talent.
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Now I don't know about you, but I say that's a win, win, win.
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Good people sometimes aren't good leaders.
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It's not a character flaw, that's clarity.
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Your job is to recognize the difference and make decisions accordingly.
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Your leadership starts now, not next week.
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Give yourself permission to step in and make changes when leadership isn't working.
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Look at your recent promotions, are they working?
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Like really working?
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If you've even a hint of doubt, schedule that conversation this week.
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Create those parallel advancement paths I mentioned.
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Stop making leadership or managing people the only way to advance or get recognition.
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And if you're considering promoting someone right now, ask yourself, do they have the
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performance, willingness, DNA, and do they have the genuine want to develop and manage
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people?
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If the answer is no, find another way to promote and recognize them that doesn't put your
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team's success at risk.
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Your people are watching to see if you'll make decisions based on what feels good or what
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actually matters.
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Or to put it more bluntly, promoting the right people instead of the loudest voices.
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You're watching to see if you'll prioritize their success over your discomfort with difficult
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conversations.
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Choose wisely, your business, and your sanity depend on it.
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If this conversation hits home for you, please share it with other business owners who
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might be struggling with the same thing.
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We've all been there, and sometimes just knowing you're not alone and wrestling with these
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messy bits of business makes all the difference.
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Find me on Instagram @itsLaurenGoldstein, or on LinkedIn if you want to continue the conversation.
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I love hearing how these changes play out in your business.
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Remember, not everyone is meant to be a leader and recognizing that isn't mean.
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It's the kindest thing you can do for everyone involved.
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I'll be waiting for you in the next episode.
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See you there!
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[music]
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Thank you for listening to The Biz Doctor Podcast.
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Now I like to say that friends don't let friends WebMD your business, so if you're wondering
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what your next steps could be, here are some options for you.
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No matter what, head to the show notes or to my website, goldenkeypartnership.com, for some
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impactful resources to support you getting out from under your business.
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That's also where you'll find the links to learn more about our services and how we support
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business owners, just like you, who are ready to make the successful jump from business operator
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in the trenches to visionary business owner with more freedom and flexibility.
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All of that info is on our website, so pop on over to learn more or get in touch:
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www.goldenkeypartnership.com.
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Finally, if you love The Biz Doctor Podcast, I'd be so grateful if you would share it with
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00:27:27,560 --> 00:27:31,960
your friends and network and give us a five star rating or review wherever you listen
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00:27:31,960 --> 00:27:32,960
to your podcast.
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[music]
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From Story Studio Network.
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00:00:00,000 --> 00:00:07,240
My client just costs themselves $350,000 by promoting the wrong person.
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Again, if you've ever promoted your top salesperson to sales manager and watch them crash
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and burn or giving your longest ten-year employee a leadership role only to see half the
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team start looking for new jobs, this episode might save you from making that same expensive
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mistake.
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Here's what nobody talks about.
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Some people are just not wired to lead.
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And that's completely okay, but the cost of not acknowledging this reality and letting
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ineffective leadership drag on, it's massive.
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The other side of this coin is we keep promoting people for the wrong reasons.
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We reward performance instead of leadership DNA.
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We promote performance instead of capability, performance, and DNA.
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And we convince ourselves that someone will step up when we know they probably won't,
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and while we're waiting for that magical moment for them to become the leader, we need
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them to be.
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We're bleeding talent, momentum, morale, and profits.
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And that is why today we're talking about how to stop making these expensive mistakes
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and what to do if you've already made one like my client did.
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Make sure to stick around to the very end because this episode is jam-packed with tangible
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advice to grow and scale your business and have the freedom you started it for.
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[MUSIC]
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Welcome to The Biz Doctor Podcast, my love letter to business owners the world over.
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I'm your host, Lauren Goldstein, award-winning business consultant and advisor,
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fondly nicknamed The Biz Doctor by my clients.
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I help business owners who are burning the candle at both ends, diagnosed,
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but is actually keeping them buried in the day-to-day busy work.
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And then formulate a treatment plan to adjust their business and team to fit them.
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So they can take a breath and a vacation and have more fun making a bigger impact than
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ever.
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So grab your favorite beverage and your earbuds and let's dive into our latest episode.
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[MUSIC]
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Look, I get it.
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Promoting from within feels right.
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You want to reward loyalty.
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You want to believe in people's potential.
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And honestly, it's often easier than going through the whole hiring process to find external
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leadership.
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But here's what I've learned in 14 years of working with business owners.
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There's a massive difference between wanting someone to be a leader and them actually having
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the DNA to lead effectively.
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Let me pull back the curtain and tell you what happened with my clients, $350,000 promotion
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mistake.
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Earlier this week, I was on an exit interview call with an employee leaving their team.
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By the end of our conversation, four things were crystal clear.
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He was an A-player stuck in a worker B-roll.
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He wasn't set up for success.
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He tried for 18 months to make it work.
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And his manager was 95% of the reason he was leaving.
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His exit wasn't about money, benefits, or workload.
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This guy was leaving because he was a player stuck under a worker B-manager that was killing
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his soul one micro-managed project at a time.
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Let me pause your first second in case you're new to the podcast and do not know about my
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philosophy on players versus worker bees.
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Let me explain the critical difference because once you know this, it will change everything
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about how you manage your team and how you look at who's on your team.
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So players create profits.
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Players are expenses.
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A player comes with a plan.
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They're the people who get the big picture, the greater vision.
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And you say, "I have a goal," and they say, "Great, I have a plan."
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They're proactive, they run with you, and it's so much fun because they're even starting
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to anticipate things before you even think of it.
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I love it because they're the expert coming to you.
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Instead of on the other side, when you have a worker B, you're often thinking, "Switch
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Jesus, if I have to tell you what to do one more time, I might just walk out the door."
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Most worker bees struggle with critical thinking or thinking outside of task lists.
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They get stuck in the details, and they do work best with tasks instead of projects.
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They also tend to not be self-motivated, so you end up doing two people's jobs, yours,
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and then thinking of things for them to do.
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And when I see self-motivated, yes, a lot of them are hard workers.
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That's not what I'm saying.
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When I see self-motivated, it's about looking for other things to do outside of what you've
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been given to do.
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I'll give you a great example.
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Many years ago, I came in and I did a diagnostic in a financial services firm.
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And as I was interviewing the team, I asked one of the employees, "Hey, when so and so has
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not given you stuff to do, and you've completed your to-do list, tell me what you do with your
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time."
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And she said, "Bless her heart."
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Oh, you know, I go on Facebook and Instagram, and I'm working on my real estate license, so
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I go and I do some modules for that.
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Bless.
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I mean, on one hand, I love that I'm the kind of person that people tell their deepest,
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darkest secrets, too, but on the other hand, you're kidding me.
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Instead of thinking of things that you could get ahead of, or other projects or tasks to
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do, this person was screwing around on social media and doing something completely unrelated
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to her job.
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This perfectly illustrates a worker bee.
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Now it might seem like I'm hating on worker bees, but I'm really not.
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I love worker bees, but here's the thing that I want you to take away from this.
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Workers are necessary on teams, but only if here's the key, you have players managing them.
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You, as the business owner, should never be managing a worker bee.
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So back to my client.
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One exactly happened here.
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Well, long story short, they put a worker bee in charge of a player.
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To put it bluntly, they committed organizational suicide.
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The cost over 18 months with just this one departing player was $350,000.
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But if you multiply that across team morale, productivity loss, frustration, other people
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who are now questioning whether they want to stay, you're looking at the kind of damage
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that could take years to recover from.
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And the worst part, my client had promoted this person's manager, hoping that they'd step
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up and grow into the role.
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Have you ever done that?
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I know I have.
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That was until I figured out how to promote the right way and then everything changed,
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which is what I'm talking about with you today.
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Let me go back to that exit interview I mentioned before.
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This wasn't about pay, workload, or even the leadership culture at the top.
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The reason this player was leaving came down to a few catastrophic leadership failures of
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his manager.
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Lack of trust from his manager, feedback that ever came, concerns that went unaddressed,
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promises that quickly disappeared, and a manager who stifled growth instead of developing
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a leader.
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But here's the one thing that truly broke the dam, the Cardinal Sin.
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The manager delegated a project to him, told him he could lead it, and then took it back.
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Never actually letting him lead it.
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And it didn't just happen once, it happened over and over and over again.
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So when I asked this person, he was leaving on a scale of one to ten, how well were your
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strengths utilized?
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His answer was a two.
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A two.
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That's not just a miss, that's a red flag waving in neon lights.
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This kind of Indian giving behavior kills motivation faster than anything.
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This manager's micromanagement conflicting messages about ownership and completely opposite
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personality style created the perfect storm for disengagement.
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Here's the expensive reality.
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My client had a manager that they wanted to succeed, but the truth was this person was
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not cutting it, and leadership was abdicating their responsibility as a leader.
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They kept hoping this manager would step up.
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They heard the employee's concerns, but didn't actually step in to address the issue with
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the manager.
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They ostriched for 18 months, hoping things would improve, and then the dam broke.
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This is what I call leadership abdication.
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When we as business owners avoid making the hard decision about who can actually lead,
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so we either promote the wrong person or keep waiting for someone to become something
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they're not.
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And the cost?
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It's not just theoretical as you saw.
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This one was a doozy.
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At $350,000, with just one employee.
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Multiply that across your team, and you start to see why getting leadership right is an
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optional.
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With that in mind, let's talk about who you need to stop promoting.
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It's possible I'm going to step on some toes here, but someone needs to say this.
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First, the golden child, your top performer, your star salesperson who crushes quotas,
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your tech genius who knows the system inside and out, here's the painful truth.
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The skills that make someone excellent at doing the work as an individual contributor
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are completely different from the skills needed to lead people who do the work.
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I've watched super stars become mediocre managers and lose both their individual contribution
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and their leadership effectiveness.
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And oftentimes your stars burn out and leave because they never should have been promoted
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in the first place.
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It's the lifer, the person who's been there for, well, forever.
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Ten-year equals institutional knowledge, not necessarily leadership DNA.
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Just because someone knows where all the bodies are buried doesn't mean they can lead the
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living.
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I've seen companies promote tenure veterans who still manage like it's 2015, driving away
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a younger talent who feels stifled or in the case of one of my other clients, promoting
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a lifer who actually really didn't like people.
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That was a doozy.
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The Peacekeeper.
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Everyone's favorite person who never creates waves.
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Here's the thing, leadership requires making unpopular decisions and having difficult conversations.
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And frankly, it's uncomfortable.
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Peacekeeper's avoid conflict, which means problems fester and standard slip while your players
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get frustrated watching media accuracy get rewarded.
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The expert, your technical genius.
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Management isn't about being the smartest person in the room.
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It's about developing other people to be smart.
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These folks often get frustrated when their teams can't perform at their level and end up
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micromanaging or doing the work themselves because their ego can't take it.
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Hello, this is definitely the persona of my client that I am talking about in this episode.
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The climber.
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The person who wants it most because they want the title and the quote unquote respect.
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Ambition doesn't equal leadership DNA.
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Some people want management for the wrong reasons, the title, the money, the status.
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But if they don't have the natural ability to understand, coach, influence others and
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develop people, all that ambition turns into frustration for everyone.
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Now before we dive into the next section, here's an important caveat.
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I'm in no way saying that you should promote your mediocre performers or not promote
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someone who is a high performer.
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That is not what I'm saying.
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I'm saying that you get to promote performance and DNA.
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Now that you know the five risky profiles, let's talk about what real leadership DNA actually
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looks like because it's not what most people think.
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Real leadership DNA comes down to two core elements that you can't teach or fake.
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First, they understand that the number one job of a leader is to create other leaders, not
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manage people, not delegate tasks, create other leaders.
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That means they're actively developing critical fingers and problem solvers, not just telling
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people what to do.
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They get energized by watching someone on their team figure something out for themselves
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rather than needing to be the person with all the answers.
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Second, they have to be a world class people decoder.
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They're genuinely skilled at understanding what makes each person tick, what drives them,
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what their unique motivations are, and how to pull the best out of them.
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They don't just care about people in some generic way.
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They're curious about each individual and driven by empowering their team.
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In addition to the above, here is a simple test to gauge if someone should be promoted or
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not.
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Before I promote anyone, I ask them three specific questions and they have to answer yes to all three,
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otherwise I'm a no.
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First, do you know what you need to do to be successful in your role?
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Second, do you know what someone else needs to do to be successful in their role?
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Third, do you feel comfortable telling someone else what to do to be successful in their
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role?
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The reason why I love these questions is it tells you a lot about someone and the clarity
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necessary to not only succeed in their role but as a leader.
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The harsh truth bears repeating.
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Being a leader and a manager is uncomfortable.
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It takes finesse, mentorship, coaching, and empowering.
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It's about creating leaders and critical thinkers and problem solvers, not just managing people.
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And they have to want to do this uncomfortable work.
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So ask them directly, do you want to be responsible for somebody else's career development?
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Do you want to have difficult conversations about performance?
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Do you get excited about helping someone else succeed even when it means they might outgrow
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their current role?
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Dig deep with them.
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They need desire, performance, and DNA because without it all the leadership training in the
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world won't make them someone they aren't.
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One more quick caveat.
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Confidence and becoming a better, more effective leader can be taught and improved.
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But you just cannot change someone's DNA, which is why my contrarian hiring practice
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hires through DNA, not just resume experience.
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With my client, if we go all the way back to the beginning of this episode, no matter
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how much training coaching, etc. came from the top, it just didn't land.
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Some people just aren't meant to lead, and that's okay.
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But you and the business owner and leader have to recognize who is or isn't meant to be
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a leader.
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And if you accidentally promoted someone that shouldn't be promoted, saying, "Okay, let's
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shift.
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Here's the thing, everything is figure outable.
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And at any moment, if you need to shift, you can, and in this case, you must."
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I'll give you another great example.
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One of my clients, we were having a challenge with the team, and of course you know me.
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I always go back to the root cause, and what was the common denominator?
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And in this case, it also came back to a manager.
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Are you seeing a trend here?
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Now in this situation, there was some pretty tumultuous conflicts happening in the team.
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And it all came to a head in a pretty spectacular way that almost cost us this very valuable
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employee.
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When the business owner and I sat down and did a post-mortem of how the heck did we get
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here, what was really interesting is it came down to one of the employees who is an absolute
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stellar, amazing employee.
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And she had come to her manager, this manager in question, countless times about her concerns
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with another employee who happened to be her direct report.
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She was looking for advice, support, and it just wasn't getting dealt with.
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It wasn't getting escalated.
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It was for all intents and purposes getting swept under the rug and falling on deaf
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ears.
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So when we are doing their reorg for the next chapter of growth for this business, I asked
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my client the really tough question of, what is the cost of having this person continue
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to manage people?
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He wanted to have the title that showed his tenure and contribution, and we wanted to
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honor that, but we just couldn't have him continue to lead people.
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This particular person is invaluable to the business, far more effective as an individual
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contributor, and he would be a heck of a lot happier if he was not managing people.
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It would be a win-win, and yet my client was really concerned about how he would take it,
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which is why I think a lot of business owners don't have these tough conversations.
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It makes everyone uncomfortable.
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But that's the thing about being a leader.
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Sometimes it really sucks to have those hard conversations, but if you address it as a
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win-win, trust me.
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Everybody is going to breathe a sigh of relief.
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Okay, back to the meat and potatoes.
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Thanks for sticking with me.
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This next part is for you if you've already made one of these promotion mistakes, and now
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need to figure out how to get out of the sticky situation.
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First and foremost, if you've promoted the wrong person, if you're not, you're not the only
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one.
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I've done it in the past.
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My clients have done it.
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I feel like it's actually a right of passage.
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So if you're feeling guilty about a recent promotion that isn't working out or you're lying
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awake, wondering if you just ruined someone's career by putting them in a role they can't
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handle, I get it.
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Here's how to fix it.
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The first step is to acknowledge it.
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I think sometimes as human beings we think that if we just ignore something it will go away.
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I can tell you after 14 years of doing this, that is never true.
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It will come back and bite you in the ass faster than you realize.
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I always say that sunlight is the best disinfectant, so acknowledge it.
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Go through your team and ask yourself the question of, is this person an effective leader?
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Do I want this person to continue being a manager and a leader?
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Make really clear on if you have set them up for successor failure.
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And if they're really meant to lead and manage.
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Ask the questions I talked about a bit earlier and get clear on who might be a victim of misguided
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promotion.
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Hopefully it's only one or two people that have popped in mind that we need to address.
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Then once you know who you need to talk to, you get to steal yourself and have that hard
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conversation.
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I'm not going to sugarcoat this.
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This is the part that sucks the most.
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I saw it happen four times with one of my fractional COO clients a few weeks after they brought me
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on board.
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When I came in and did my signature diagnostic to uncover the root causes of what had
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stalled growth and was plaguing retention, I started asking questions about different
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team members and managers, really digging in and asking the question of, why did this person
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get promoted?
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The answers I got were a lot of, well, we just needed somebody or they wanted it or something
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like that.
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Just my advice, this client did what I do not recommend.
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They demoted the people without a conversation, which sucks.
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So much because demoted people rarely stay.
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So instead of having a knee-jerk, oh shit moment, I encourage you to really look at your
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people and ask how valuable is this person that you promoted?
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That probably shouldn't have been promoted.
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If the answer is very valuable, which I hope it is, then say with them and say, hey, I
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think we promoted you into leadership and management.
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And this might not actually be setting you up for success or what you want.
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So I want to have an honest conversation.
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What would a win-win look like to you and would you be okay going back to being an individual
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contributor?
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You can phrase it a little bit differently because it's not necessarily if they want to stay
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but giving them an out.
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The truth is you can't keep somebody who's an ineffective manager.
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You just can't.
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But in my experience, people who are truly valuable, who you value and want to stay will find
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a way to make it work and the shift seamless.
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There might be ripple effects or whispers, but we all have short memories and as long as
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you as the leader manage the change with transparency and respect, it's a win-win.
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I'm going to start to wrap this up by illustrating how having these tough conversations also
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staves off the silent killer of teams, resentment.
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You know my favorite saying is unshared expectations are nothing more than pre-meditated
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resentments.
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So let's take a little walk down memory lane as I tell you one last story of a client who
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was bleeding $150,000 a month as a result of promoting someone who should not have been
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promoted.
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This was a couple of years ago.
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I came into a $70 million business and did my diagnostic, sat down with the team and was
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asking one of the department heads about his day to day and how he got there.
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He shared that when he got promoted, it was unexpected.
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He kind of just ended up there.
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And he felt like he was failing every day.
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And he also felt like he wasn't getting any support, like they just dropped him in the
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deep end and hoped he could swim.
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His team was also really not doing well.
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He was not doing well and the department was bleeding $150,000 a month.
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So finally, through the course of this conversation, I got to the crux of it.
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He was resentful of everyone in leadership for putting him in this position even though
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he confessed he did want the position.
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He did want the promotion.
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He was pissed.
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And rightfully so, he got promoted without support.
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And so he got what he wanted, but it was nothing like what he imagined and he was feeling
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like he wasn't supported and he was mad.
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Now I don't often have a true hard line of someone needing to be let go unless they are
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infected by resentment.
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This is the one symptom that I will immediately fire someone for because it's very, very hard
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to come back from and it infects the team faster than Pink Eye at preschool.
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So when my client and I did a postmortem and I did their R&R, their results in recommendation,
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we realized that this person's bad management, an ill-fated promotion costs the business
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of whopping $2 million total in 10 team members.
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The crazy thing is that this business was overperforming so much in another department that the internal
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bleeding of this department wasn't actually caught until I came in with fresh eyes.
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More to that, his manager never spoke up about his resentment.
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In fact, he told me when I asked why he didn't bring any of this up to anyone beside me,
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he said he "just wanted to figure it out on his own."
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So there's a lot to unpack there.
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I won't go into it.
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But he was essentially resentful, he didn't have support yet didn't speak up.
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Oh yeah, why do we want to be business owners?
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So I tell you this story because I want you to know that it can have into anyone.
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Big, small, doesn't matter.
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We've all been there, but now you know better.
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You as the business owner need to proactively plan your team growth and promotion.
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It is so important to get clear on who is or isn't in the right seat, who is or isn't
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the best leader or manager, and to have the conversation.
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It's uncomfortable, but the pain of having the tough conversation is way better than the
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pain of regret and resentment, not to mention the literal and figurative costs.
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The other thing I want you to do that I've talked about in previous episodes is you need
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to have dual promotion tracks.
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One for individual contributors who can continue to grow, have more accountability, more
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responsibilities, and more success without leadership or management responsibilities.
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And then you create another path for leadership in management.
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Trust me, this will solve so many problems because most people want growth and recognition.
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They don't want to be stagnant, but you have to understand what kind of growth they want
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and set them up for success.
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Last but not least, going forward, I really want to encourage you to take a beat, take
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a breath, and start proactively promoting and hiring because it will change everything.
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Most business owners and in fact most of my clients come to me and aren't doing promotion
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or headcount planning proactively.
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It's all "I need somebody yesterday" and that is a recipe for mishires, misaligned expectations,
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which you know leads to resentment, and simply put not having the best people you need.
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Now in case you, like me, still worry about how this will impact your team or owl, here's
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something else nobody really talks about.
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It isn't cruel to not make someone a manager or a leader.
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The person you don't promote to leadership, they get to stay in their zone of genius instead
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of struggling in a role that makes them miserable.
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Your team gets actual leadership instead of someone flailing around and you stop bleeding
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money and talent.
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Now I don't know about you, but I say that's a win, win, win.
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Good people sometimes aren't good leaders.
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It's not a character flaw, that's clarity.
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Your job is to recognize the difference and make decisions accordingly.
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Your leadership starts now, not next week.
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Give yourself permission to step in and make changes when leadership isn't working.
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Look at your recent promotions, are they working?
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Like really working?
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If you've even a hint of doubt, schedule that conversation this week.
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Create those parallel advancement paths I mentioned.
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Stop making leadership or managing people the only way to advance or get recognition.
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And if you're considering promoting someone right now, ask yourself, do they have the
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performance, willingness, DNA, and do they have the genuine want to develop and manage
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people?
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If the answer is no, find another way to promote and recognize them that doesn't put your
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team's success at risk.
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Your people are watching to see if you'll make decisions based on what feels good or what
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actually matters.
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Or to put it more bluntly, promoting the right people instead of the loudest voices.
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You're watching to see if you'll prioritize their success over your discomfort with difficult
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conversations.
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Choose wisely, your business, and your sanity depend on it.
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If this conversation hits home for you, please share it with other business owners who
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might be struggling with the same thing.
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We've all been there, and sometimes just knowing you're not alone and wrestling with these
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messy bits of business makes all the difference.
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Find me on Instagram @itsLaurenGoldstein, or on LinkedIn if you want to continue the conversation.
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I love hearing how these changes play out in your business.
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Remember, not everyone is meant to be a leader and recognizing that isn't mean.
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It's the kindest thing you can do for everyone involved.
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I'll be waiting for you in the next episode.
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See you there!
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[music]
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Thank you for listening to The Biz Doctor Podcast.
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Now I like to say that friends don't let friends WebMD your business, so if you're wondering
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what your next steps could be, here are some options for you.
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00:26:51,320 --> 00:26:56,200
No matter what, head to the show notes or to my website, goldenkeypartnership.com, for some
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00:26:56,200 --> 00:27:00,080
impactful resources to support you getting out from under your business.
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That's also where you'll find the links to learn more about our services and how we support
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business owners, just like you, who are ready to make the successful jump from business operator
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00:27:09,960 --> 00:27:15,760
in the trenches to visionary business owner with more freedom and flexibility.
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00:27:15,760 --> 00:27:20,520
All of that info is on our website, so pop on over to learn more or get in touch:
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00:27:20,520 --> 00:27:22,520
www.goldenkeypartnership.com.
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00:27:22,520 --> 00:27:27,560
Finally, if you love The Biz Doctor Podcast, I'd be so grateful if you would share it with
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00:27:27,560 --> 00:27:31,960
your friends and network and give us a five star rating or review wherever you listen
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00:27:31,960 --> 00:27:32,960
to your podcast.
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00:27:32,960 --> 00:27:49,440
[music]
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From Story Studio Network.
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00:27:51,440 --> 00:27:52,900
