Search the Blog :

Good Turnover, Bad Turnover … a Reality Check

Written by Gino Wickman on December 10, 2014

Clarity Break Thought

Wow! 2014 is already wrapping up. It’s been an amazing year of growth. My clients are averaging almost 20% growth, we have over 10,000 companies using the EOS tools, and we now have almost 100 professional and certified EOS Implementers. We’re helping a lot of companies do great things, and we greatly appreciate the reason—your support and belief in EOS. With so many companies implementing EOS, that leads to the topic of this Clarity Break. Its purpose is to help you head off a psychological barrier that might be holding you back as you implement tools to help your company grow to the next level.

In a survey of our graduated clients, we asked what was the #1 reason they engaged in the process; 82% said “I wasn't getting enough out of my people.” If you’re normal, you might be feeling the same way as you think about growing your company.

When helping our clients implement EOS, occasionally right around the one-year mark, someone on the leadership team puts the issue of “turnover” on the issues list. When the issue is raised, we always first ask, “Is it good turnover or bad turnover?” Upon further investigation and a deeper dive, the leadership team always concludes that it is good turnover. Good turnover is people going away because they are the wrong person or in the wrong seat, or can’t live up to the new expectations. Bad turnover is when the right people are leaving because of poor leadership and management.

Simply put, when your vision for growth is finally crystal clear and you put the right structure in place to match that growth, as you move forward to execute that vision, there will be fallout. When breaking through the ceiling and going to the next level, your company is going to experience some turnover. On average, it’s about 20% in the first year for most of our clients. The most was 50%. It’s also important to note that 80% of the time, there is at least one people change in the leadership team that we start with (five of my clients have completely turned over their entire leadership team, where the only one left is the owner).

With all that said, it’s undeniable that any kind of turnover doesn’t feel good intuitively. However, there’s no denying when you want to go the next level and have to replace the wrong people with the right people, you gain more of the things you want from your business: productivity, growth, profit, enjoyment, peace and a thriving culture. And you therefore greatly diminish the things that you don’t want: frustration, dysfunction, politics, whining and stagnation.

Said another way, as you go forward and grow to the next level, it will require some tough people decisions. So keep in mind the following:

  • What got you here won’t always get you there.
  • It is not a criticism of the past.
  • Growing to the next level isn’t easy, so make sure you’re tough enough to manage the turnover (most aren’t). There’s no shame in staying where you are. Be careful what you wish for.

Here are a couple of actions to consider. In your next Clarity Break, I urge you to spend some time pondering the following:

  1. Based on your vision and plan for 2015, decide and implement the right structure to get you to the next level. With the right structure in place, then confirm you’ve got all the right people in the right seats.
  2. Run everyone through the people analyzer (pages 85–86 in Traction). It’s black and white, and it doesn’t lie. If they’re not the right people or not in the right seat, make the tough decision and put a plan in place to solve it.
  3. Based on the people analyzer results, the bottom line is that, if they don’t have your core values, they must go. Or, if they don’t Get it, Want it, or have the Capacity (GWC) for the seat, they must get moved to another seat or go.
  4. If they must go, certainly do it with compassion; just have a plan to do it right and do it soon.
  5. Make at least one great people move every quarter.

Hope that helps. By the way, my new book with co-author Mark C. Winters for visionaries and integrators, Rocket Fuel, comes out in April. Thanks for all of your support. Let us know if we can help.

Stay focused,

Quick link to order copies of Traction
Quick link to order copies of Get a Grip
Become an EOS Implementer
Take the Organizational Checkup

More Blog Posts: ← Are you taking Clarity Breaks? | The 7 Biggest Meeting Mistakes No One Talks About