Managing Toxic Talent – or how to deal with arseholes

When someone in academia says what I’ve been saying for years and turns it into a “breakthrough idea”, I feel partly vindicated but also a bit hacked off that I didn’t think of writing the article and marketing the idea sooner. That was my reaction to Bob Sutton’s series of pieces on building a civilised and “asshole” free workplace. In this country, we’d call them arseholes but they are pretty much the same whichever side of the Atlantic you are on.

Bob, who is a professor of management at Stanford University, has now consolidated these ideas into a book entitled The No Asshole Rule: Building a Civilized Workplace and Surviving One That Isn’t.

His idea is simple. There are people in most workplaces whose behaviour costs their organisations large amounts of money. The arsehole makes everyone else’s life a misery, thereby increasing staff turnover and lowering the morale of those people who decide to stick it out. Tackling these office psychopaths is not only morally right, argues Professor Sutton, it makes economic sense too.

In my experience, though, the really annoying arseholes are those that perform well against whatever criteria is being used to measure people at appraisal time. I have worked for a number of organisations where appalling behaviour was excused because the perpetrators brought home the bacon.

In one company, a maverick executive had created a highly profitable line of business. He was considered to be untouchable and his overgrown-toddler behaviour was tolerated and even indulged. His habit of throwing laptops or pieces of furniture across the office in response to some minor frustration was just laughed off. After all, it’s what these clever creative types do, isn’t it? Fortunately, no-one was ever hurt but that was more due to luck than anything else.

This is not a one-off example. In many UK organisations, executives wear the difficult-to-work-for label as a badge of honour. Having been through four PAs in as many months is considered a sign of having uncompromising high standards, rather than a sign of being a complete and utter dickhead.

But there is also a cost to this behaviour. The nervousness of the employees who have narrowly missed being hit by a flying laptop is bound to have an impact on their performance. The cost of replacing the four PAs in as many months is considerable.

I like to illustrate the problem with a bar chart. I use the term Toxic Talent, rather than arseholes, but it amounts to the same thing.

toxic260.png

In this example, Employee C contributes the most to the company’s revenue. He would therefore probably get the highest bonus. What his bosses don’t take into account, though, is the impact of his negative behaviour. When you subtract that from his performance figures, Employee C is the worst performer in the team. Allowing for the cost of this bad behaviour, C’s performance is way outstripped by D’s, who has brought in less revenue but has not cost the company money through being an arsehole. Rather than rewarding C with a bonus, the company would gain more financially by tackling this behaviour. However, very few employers are willing to step up to such a challenge.

But at last, says Bob Sutton, organisations are now starting to do just that. He gives an example of how a Silicon Valley company dealt with “Ethan”, a high-performing sales executive.

Although he was consistently ranked among the company’s top five producers, Ethan was an arsehole. He routinely belittled his colleagues, bullied his staff and sent out abusive emails. Eventually his behaviour became so bad no-one in the company would apply for jobs in his team. His reputation seemed to have spread to the outside world because HR struggled to fill the vacancies, even after an expensive external search.

After warnings and training had little impact on Ethan’s behaviour, his boss lost patience. The company worked out the cost of Ethan’s despicable behaviour and deducted it from his bonus.

Time spent by Ethan’s direct manager: 250 hours valued at $25,000
Time spent by HR professionals: 50 hours valued at $5,000
Time spent by senior executives: 15 hours valued at $10,000
Time spent by the company’s outside employment counsel: 10 hours valued at $5,000
Cost of recruiting and training a new secretary to support Ethan: $85,000
Overtime costs associated with Ethan’s last-minute demands: $25,000
Anger-management training and counselling: $5,000
Estimated total cost of asshole for one year: $160,000

That’s just short of £80k in our money!

Still the company was magnanimous. Ethan’s boss only proposed to deduct 60% of the total cost from his bonus. Predictably, Ethan flew into a rage and blamed everyone else then threatened to quit. But his managers held their nerve and Ethan was left with the choice of changing his behaviour or continuing to pay the “Asshole Tax”.

When Bob first published his thoughts on managing arseholes, in the Harvard Business Review, he was surprised by the reaction. Apart from one or two criticisms of his language, most people who wrote to him said that his descriptions of these people sounded horribly familiar. A number of the emails came from the UK.

More companies should take the approach used by Ethan’s bosses and calculate the total cost of each arsehole. Imposing a tax on bad behaviour, by deducting the cost from discretionary payments such as bonuses, would improve the working environment and save companies a lot of money.

The No Asshole (or Arsehole) Rule looks like an idea whose time has come.

(And Bob Sutton’s blog is going straight onto my side-bar)

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8 Responses to Managing Toxic Talent – or how to deal with arseholes

  1. dearieme says:

    What about the CEA?

  2. Rick says:

    Dearieme – I’m not with you. What’s the CEA?

  3. dearieme says:

    Chief Executive Arsehole.

  4. Matt Munro says:

    The problem is we have moved towards a workplace ethic that only values people who make a great deal of noise and do their jobs very publicly. People who keep their heads down and get on with their work are not valued, except in a patronising “he/she keeps the place ticking over” kind of way. The worst examples of this are in the various “fast streams” of the civil service. They produce arseholes by the dozen. They can talk the talk and walk the walk, there isn’t a management buzzwords they don’t know, and despite the appearance of being busy (the early starts, the late nights, the always in a meeting syndrome) they produce nothing that an ordinary member of staff couldn’t in half the time, and the mess they create takes months to clear up, meanwhile they have swanned off to their next post and the cycle starts again.
    There are quite a lot of workplace studies which show that once an organisation reaches a critical mass, the workforce devote more time to maintaining their place in the hierarchy than to producing any usefull outputs. This is why the most vocifeous workplace disputes tend to revolve not around company activities, but organisational status symbols, who gets the best space in the carpark, the biggest office, the desk with a window view, the use of a secretary, the top- of-the-range company car and so on.
    Add to that the replacement of professionalism with “process” and the stratified nature of large organisations (sales are more important than accounts, excutives more important than sales etc), and you have an environment where the arsehole thrives. This becomes self- perpetuating, the arseholes eventually end up running the place, and they tend to promote aspiring arseholes, who remind them of themselves.

  5. Rick:

    I like your Managing Toxic Talent piece very much and would like to ackowledge you personally in a book I am currently finishing for Pearson. I can acknowledge you simply as Rick, but if you would care to give me your full name I would be delighted to ensure that you are able to bask in the full glory your article deserves.

    Best regards,
    Robin

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