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Marketing and Employees: Bad Apples

By Shawn Busse on December 16th, 2010

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With winter setting in, my visits to the grocery aisle reveal new options. Fall apples plentiful, and choices abound.

As I picked up a Honeycrisp apple I was struck by the connection between this excellent fruit and a story on low-performing employees. Or, as the story goes, the “bad apples” in the business.

The value of a good employee

If you’ve never had a Honeycrisp apple, you don’t know what you’re missing: juicy, full of flavor, firm, and delicious. These apples are the premium choice at any store and connoisseurs gladly pay the high price tag for this for this outstanding varietal.

Honeycrisps are a lot like your best employees: they usually cost a bit more but are worth every penny; they stand out amongst the rest; once you’ve had the top-performer experience, there’s no going back.

On the flip side of the coin is the Bad Apple. We all know that you wouldn’t pay a dime for a real bad apple, yet some businesses insist on repeatedly paying for bad employees. Anecdotally, we know there’s a cost for low-performing team players, but just how much do these Bad Apples really cost ?

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What if I told you 40 cents of every dollar was wasted?

As it turns out, there’s actually a real, identifiable cost to Bad Apples. Even worse? The old axiom is true: bad apples aren’t just bad – they actually degrade the Good Apples (employees) around them.

In the study How, When, and Why Bad Apples Spoil the Barrel Professor Will Phelps illustrates how the “spillover” effect from a bad apple can diminish an otherwise highly productive team. Through a series of specific experiments, Phelps and his team showed that just one “bad apple” will drive down team effectiveness by 30-40%! Even though we intuitively think a strong, high-performing team can overcome the one Bad Apple, test after test showed that there’s simply no winning with a losing player.

This American Life recently re-broadcast this story and you can listen to it here.

You can also read a Wall Street Journal article on the study.

The many flavors of Bad Apples

Phelps and his team identified three main types of “apples” in the study. You’ve no-doubt worked with or employed one of these types before:

1. THE JERK
This personality type is simply rude. They criticize others and their ideas without contributing solutions of their own.

2. THE SLACKER
Indifference rules. This apple doesn’t care if things get done, and demonstrates it with words and deeds (or lack of deeds!)

3. THE DEPRESSIVE PESSIMIST
This person complains and drags down the energy of the team. Unlike the Jerk (attacks) this Apple simply complains about the overall malaise of the situation. One blogger called this the “Debbie Downer” of the workforce. Pretty much sums it up!

It’s a bad situation and we’ve all experienced it at one time or another. And, sadly, our tools for addressing the Bad Apple are often inadequate: we’ll pretend the problem doesn’t exist, pass on the work to someone else, or even try to isolate the bad apple from others in the company. Sometimes we make repeated attempts at changing the Bad Apple’s behavior.

Truth is, all of these solutions are band-aids. Core behaviors (hah!) are slow to change – the seed of personality was planted long ago and no amount of HR intervention will remake the individual. Instead, it’s probably best to take the advice of experts that have studied this sort of thing for years….guys like Jim Collins whose seminal book, “Built to Last” has it right on the mark: cut the rot early before it spreads.

I’m in marketing. Why should I care?

While Kinesis‘ focus is on the science and art of marketing, it’s impossible to turn a blind eye to other key business areas. We’ve had clients with weak profits discover that the problem wasn’t their marketing or sales, but rather the way customers were treated by key staff. In other cases, Bad Apples weren’t exposed to clients, but instead had such a profound impact in the internal teams that the end result was just as bad. If you care about perception of your brand – both internally and externally, you should care about how Bad Apples are tarnishing that hard-fought business image.

To put a financial point on this: most of our clients are in the professional services arena where each employee represents roughly $100-$200k in top-line revenue. Often, these businesses are organized in sub-groups where an Apple might work with 3 or 4 others, accounting for a total revenue of somewhere around $500,000 per year. Now take this one step further and apply Phelps’ research: at only 60% efficiency (courtesy of the Bad Apple) the team is missing over $300,000 in potential revenue! It might sound crazy, but I’ve seen instances just like this: removing the Bad Apple not only frees up payroll (and funds for marketing) but total revenues also rise as a result of increased productivity by the remaining top-performers.

Moral of the story: Once your business is filled with top-performers, you’ll see an exponential growth in productivity, marketing success, and profits. Even better? Once the Bad Apple is gone, the rest of the team will thank you for making the right move.

Up next: Broken Windows and inspiring offices

In the second part of this series I’m going to explore how environments can influence employee behavior (and your business profits!). Now that we know the cost of a bad employee, let’s look at the expense of a bad work environment. In the meantime, add your Bad Apple experience in the comments section below – I know you’ve got some good stories!

PS If you have a story you’d like to share anonymously, feel free to send it to me directly. I’ll post it in the comments, sans author.

Shawn Busse

Kinesis CEO Shawn Busse has an incredible knack for finding opportunities in your business and turning them into new streams of revenue. No one does a better job with launching brands, making a splash, and monetizing marketing efforts. Over the years, Shawn has led numerous transformational business efforts; his fundamental approach to doing business is summed up in two words: win-win.

Read more of Shawn's blog posts.


Comments (10)

  • Shawn Busse says:

    This blog post has elicited a number of comments, but most of them private. The common theme has been from the “honeycrisps” (top performers) who are either grateful for management that takes action or frustrated by working side by side with “B” players.

    This morning I came across a great blog post along similar lines: The article talks about when smart employees become bad employees. http://bhorowitz.com/2011/01/04/when-smart-people-are-bad-employees/

  • Hi Shawn – very important and valuable insights about the impact of the bad apple. I agree that most leaders’ tools for dealing with them are inadequate. That is not to say, however, that it’s impossible to transform a bad apple into a honeycrisp. A powerful leader with good skills can do that. Let me tell you about the “head case” bad apple –

    “Jeff is a head case – he really needs anger management training.” That’s the advice I was given when I took over as plant manger. Shortly after that I actually had to step in between Jeff and another employee to stop a fight. However, as I got to know him, Jeff told me, “I love to use old computer parts to build faster computers so I can play high speed games.” He also told me, “Where I used to work we had a ‘just-in-time’ process so we never ran out of material like we do here, but no one here will do it.”

    Jeff’s passion for computers and efficiency was obvious. When I needed someone to create an Excel scheduling program, I asked him, “Jeff, how would you like to learn Excel to schedule our orders?” He jumped at the opportunity, created the program, and created a new responsibility for himself as our production scheduler.

    After that he set up a just-in-time system that reduced inventory and waste while ensuring that we never ran out of material. His anger issue evaporated, he became a team player and one of our most valuable employees. Given the opportunity to use his head, Jeff was no longer a head case.

    The key here is that powerful leaders recognize that the great majority of employees want to excel and they want to do a good job, but their ability to put that into action is hindered by runaway emotion. A great leader looks for the unexpressed emotion (frustration in Jeff’s case) behind the expressed emotion (anger), then looks for the underlying commitment (efficiency) behind that emotion. Jeff’s anger was a symptom of his frustration – he knew there was a better way, but no one would listen. And behind his frustration was a rock solid commitment to operating efficiently.

    True leaders are always on the lookout for opportunity where others do not see it – whether that opportunity is in the development of products, or markets, or people. And when they find that opportunity they bring uncommon perspectives to bear to fulfill on the opportunity.

    More power to every leader out there!

    Gabe

    • Shawn says:

      Hi Gabe,

      That’s a great story – thanks for sharing!

      I agree that it’s great when a manager can help “move” an employee from the “b” bucket to the “a” bucket. It’s a real win, both in terms of employee morale and the company’s investment in the workforce.

      I’m also curious how leaders determine when it’s best to bring the employee around, or to severe the relationship. I think the problem often lies in that ugly “middle ground” – we see a problem, we know it’s hurting productivity, yet nothing is done about it.

      Here’s to the untapped opportunity!
      Shawn

  • Great question Shawn – where do you draw the line? One of the best ways I’ve found for for determining whether the apple can be transformed to a honeycrisp or needs to go into the compost pile for recycling is to allow the other apples to call the shots. Pretty extreme, huh? Let me give you two examples.

    A new employee, Chuck, started working in our corrugated box plant and appeared both physically and mentally slow. Everyone in the plant had been involved in the creation of our core values statement – quality, safety, sense of urgency, knowledge, customer service, teamwork and communications. These core values actually comprised our entire performance review system and everyone knew they were free to challenge another employee who did not appear to be living up to them.

    Chuck seemed to take a long time to get up to speed on the simplest operation, baling the waste material. Another employee complained about Chuck’s sense of urgency, so we started timing Chuck’s performance and others. Chuck was indeed slow at first, but he took it as a personal challenge to improve. Soon he was acknowledged as one of our fastest balers, and even though it was the least desirable job for everyone else, Chuck embraced it as his area of expertise. The concerns from the other employees disappeared and Chuck found a new home doing a job that he was proud to do.

    The flip side of the coin – we had several complaints about employees who were thought to be substance abusers. Our Safety Team (all production employees with me facilitating) wanted to ensure that people who were believed to be users were tested and dealt with appropriately but fairly. They created a check list of impairment indicators (bloodshot eyes, slurred speech, paranoid comments, etc.). Any employee(s) could come to me and ask for a check list. If they checked off 3 or more indicators, the suspected employee was sent for a mandatory drug and alcohol test. My job was simple – 3 check marks was a test, anything less was just a conversation and a warning.

    The team also created a substance policy – if you tested positive, you could not return to work without testing clean and starting a treatment program. In the next 12 months you could be required to take a test at any time. If you failed, you were fired. If you had no issues over the next 12 months your record was wiped clean.

    In one case, Steve failed his test, so he entered a program, tested clean and returned to work. Shortly after his return, someone told me they smelled alcohol on his breath, so we sent him for a test. When I got the results indicating that he failed, I asked him, “What do you think I should do?” His response – “You should fire me.” Which I did – and by the way, I had no hesitation whatsoever, because I knew the rest of the employees expected it and would not accept any other resolution.

    This was the fairest, simplest, easiest to administer substance policy I have ever seen. We quickly lost a few employees due to our “two strikes and you’re out” policy, but in the next year our team’s performance exploded – 23% reduction in labor costs with a 10% increase in pay scales, 34% reduction in waste, 70% reduction in safety incidents, on-time delivery went from 74% to 99%. Morale soared and the company became profitable again.

    How willing are you to let your employees make the decisions that are usually reserved for management? Imagine what’s possible if doing that opens up results like these.

    Gabe

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