Something Worth Reading: Toxic Employees Hurt More Than Superstars Help

One of the best articles I have seen this spring comes from the Harvard Business Review, entitled “It’s better to avoid a toxic employee than hire a superstar”. You can read it here.

Previously on this blog we’ve talked about toxic employees, the importance of engagement, and the value of high performers. It’s easy to get lost in each of these topics individually, but what HBR does well is capture the overlap of some of the factors involved.

Most notable from the article are:

  • The cost of a toxic employee on other staff exceeds the revenue brought in by a superstar.
  • Toxic employees tend to be productive and in many cases are high performers. They rarely fit the archetype we might have of a lazy underperformer being your biggest problem.
  • Toxic employees have staying power in many cases because of their performance and because they often also have the attractive characteristics of charisma, curiosity, and high self-esteem.

For me the most resounding quote I saw was:

“Overconfident, self-centered, productive, and rule-following employees were more likely to be toxic workers. One standard deviation in skills confidence meant an approximately 15% greater chance of being fired for toxic behavior, while employees who were found to be more self-regarding (and less concerned about others’ needs) had a 22% greater likelihood. For workers who said that rules must always be followed, there was a 25% greater chance he or she would be terminated for actually breaking the rules. They also found that people exposed to other toxic workers on their teams had a 46% increased likelihood of similarly being fired for misconduct.”

So what does this mean in the world of fundraising? For one thing it helps to explain why so many programs have difficulty or reluctance in dealing with toxic employees – they outperform their peers in a world where performance is everything. What happens when we reward that behavior, however, is the pattern of toxic behavior spreads to other team members, in many cases towards high performers who are otherwise good citizens of the organization.

Looking at this study it also occurs to me that we may inadvertently be selecting potentially toxic fundraisers during hiring. Our industry has been building a narrative of traits to look for in fundraisers that has high overlap with the qualities HBR has found are in abundance in toxic employees. In previous posts we have discussed what to look for in hiring, identifying potential, and evaluating fundraisers. While that advice still stands, it ignores one key component that we should look for in order to avoid hiring the confident, productive, yet toxic fundraiser: authenticity. Later this month I will spend some time elaborating on this key concept: how to look for authenticity, how to create an organization that fosters it, and how to leverage it for fundraising success.

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A side note: Many of you may have noticed that the blog has been on hiatus for a few months. This was due to a career move of my own. I am now back up and running. Please continue to comment, send in topic requests, and participate in the discussion.

When is turnover healthy? Four instances where “losing” frontline talent isn’t such a bad thing

We have a healthy fear of losing talent in the world of development. For the frontline in particular, is difficult to find and fill open positions, incredibly expensive to lose someone on the frontline, and disruptive to relationship building with donors. This blog has spent some time talking about recruitment and retention strategies, tips for growing your own high performers, and data and trends behind the the world of fundraising talent management. In this flurry of trying to find, engage, and grow talent we can begin to fear losing any team members above all else.

Yes- having turnover is expensive, but there are a few instances when change doesn’t have to hurt, and in some cases attrition can be healthy for your overall team. Below are four scenarios where there are benefits that come with the “loss” of a fundraiser.

ursula 1Scenario 1: “Ursula the Underperformer”

We’ve talked before about how 20% of our frontline team bring in 80% of funds, a ratio that is fairly consistent across institutional types and structures. We’ve also discussed the 3-5 year “ramp up” period of fundraiser performance. Losing high performers is rough and the loss of potential high performers can be equally detrimental long-term. What we shouldn’t be afraid of, however, is losing or changing the circumstances of our lowest performers who have remained at the institution for years without ever achieving that “ramp up” to strong performance. This doesn’t mean that we should expect development officers in charge of smaller programs to raise as much money as their peers in big priorities and principal giving; rather, we should be looking for those Ursulas who don’t meet the expectations appropriate for the capacity of their portfolio and appeal of their programs. If you have a frontline fundraiser who has been with you for 5+ years and still is not producing meaningful gift commitments then chances are:

  • They are already disengaged from the institution
  • They lack the skill set or strategy to cultivate a meaningful pipeline within their portfolios over time
  • They are unlikely to improve on their own
  • They hold a mid-level position that could be better filled by rising talent

CarlScenario 2: “Culture Conflict Carl”

We’ve worked with hundreds of non-profit development offices – higher ed, healthcare, conservation, human interest, international aid, etc. Even across like institutions there are distinct office cultures that influence the type of management and nature of engagement of employees. In many cases you may have a “big hire” or newcomer who comes from an organization that was very different culturally. For example, your shop may be very data-driven and transparent with all activities tracked, reported and analyzed while you may have Carl, who works best in an office that uses data to bookend activity but not drive it. This is not an insurmountable hurdle to overcome, but there are likely to be some hires where the cultural fit just isn’t there. When this happens:

  • The employees described above are equally frustrated (for frontline fundraisers who had been at an organization for 2 years or less – office culture was a leading cause of dissatisfaction)
  • Team dynamics suffer and cooperation declines
  • Forcing a fit can lead to an office’s cultural values become more imposed (and thus more negatively perceived) than naturally occurring

debbieScenario 3: “Debbie Downer”

We’ve all seen this person in action. They generally aren’t happy with many things about their job whether it be management, processes, other team members or institutional leadership. What’s more is that these individuals complain and seek others’ condolences. Negative presences like this contribute to several toxic trends within an office:

  • employee disengagement (and the attrition rate) spirals downward
  • discussions become grievance oriented rather than solution driven
  • other development team members acquiesce to and avoid confrontation with these individuals even when it is not the best overall choice

The negative impact of only one or two Debbies can be felt across an entire office. The hard part of this one is that Debbie might be a high performer. She may be able to bring in gifts and it is a real risk to see her leave looking at sheer numbers alone. However, ultimately keeping her around becomes the choice of keeping one performer at the expense of the happiness and productivity of the larger team.

loganScenario 4: “Lone Wolf Liability Logan”

Human Resources tends to get quite involved when employees become actual legal liabilities, but there are employees who pose other liabilities that you should be conscious of and proactive towards. This is generally the type of individual who adopts the “lone wolf” mentality at the expense of other team members, programs, or initiatives. You can spot a Logan on your team because he:

  • expects to be exempt from new procedures or protocols (eg: keeps his own excel spreadsheet of his portfolio despite all other fundraisers using your database)
  • can drop the ball with donors and prospects who are not viewed as a “high enough” priority or will pursue gifts from prospects despite other active gift discussions being in the pipeline
  • facilitates and encourages other “lone wolves” across your faculty, program staff or institutional leaders

Logan, like his counterpart above Debbie, may produce results. Your objective when deciding whether to keep any of the four types of individuals above should be to make the conscious choice based on what the individual’s value-add is to your organization and be honest about what negative attributes he/she may take with her when he/she leave.

 

For the four above examples we are making the assumption that much of the turnover we reference below isn’t a deliberate severance or firing by the institution. We know that most fundraisers are constantly being recruited away. Healthy turnover can be encouraged by organizations through simply not actively trying to counter and outweigh the external offers that are available.

The Manager Gap – Why Fundraising Managers Are Important and Five Factors of Ineffective Frontline Leadership

When you dive into the topic of talent management in fundraising and development one key topic arises again and again: the challenge and shortage of effective management, especially of frontline fundraisers. This is an issue that has rebounding implications, as ineffective (or nonexistent) management can cripple an entire program. Prioritizing management of fundraisers is thus important because:

  • Management and leadership drive fundraiser engagement and have a strong determining role in overall retention. Most surveyed frontline fundraisers who reported low satisfaction attributed it to leadership or management elements not compensation, cause, or geographic location.
  • Managing and building strategy for the frontline impacts performance dramatically,both in short and long term. Managers have the ability to not only inspire collaboration and strategic thinking, but they are the key players in meaningful goal setting and professional growth for the fundraising team, but factors largely influence fundraising performance.
  • Managers serve as a critical leadership linkage between institutional initiatives and human capital. Fundraisers focus on donors, rightfully so. Institutions focus on vision and programs. Those who manage fundraisers fill the gap between those two activities, building outcomes from institutional direction and providing focus in individual agendas.

Branson Quote

Managers in development are thus hugely important to building momentum, providing staffing stability, and driving performance. Why does fundraising management fall short so frequently then?

Any combination of the following five factors are typically at play when management of fundraisers is ineffective:

  • (1) Leadership buy into the misconception that, as seasoned professionals, fundraisers require minimal management. Yes, we’ve talked about how high performing fundraisers need to have independence, but the opposite of micro-management is not absence of leadership. Frontline fundraisers frequently report frustrations with their lack of access to and direction from their managers and team leaders. Moreover, donor relations and gift outcomes are optimize by multiple points of contact and clear strategy. Managers who are disengaged from their team negate that opportunity.
  • (2) There is a small talent pool of frontline fundraisers with meaningful management experience. Development and major gift officers are looking to be managed by “one of their own”, meaning that they trust and respond more readily to individuals who themselves have experience as a fundraiser. We’ve talked about the general shortage of frontline fundraising talent across the country, and the shortage is even more pronounced when searching for individuals who both know major gift relationship-building strategy and are comfortable building a budget and negotiating office politics. This leads us to…
  • (3) Fundraising shops are growing rapidly and promoting individuals without professional skill investment.  More and more unit-based and separate fundraising programs require larger teams. As these teams grow the most senior fundraiser is often promoted and management responsibilities are subsequently treated as a “add-on” to existing fundraising responsibilities without meaningful training. Of surveyed fundraisers with 10+ years of experience the most frequently requested training and professional development topic area was in leadership and managing a team. We have a full class of individuals with great fundraising skills and new management expectations, but little support in building their capacity to meet those new expectations.
  • (4) There are rising demands and responsibilities for existing leadership. Plainly, many managers and leaders in development don’t have the time (or don’t believe they have the time) to spend building and engaging their team members. There are too many fires to put out, too many volunteers to respond to, and too many items on the event calendar to plan for, not to mention that these leaders often have high-level portfolios of their own. Non-profit development leaders are often overworked and talent management falls to the bottom of the totem pole too frequently. This can often be a symptom of a larger problem, which is that…
  • (5) The development office and team members aren’t fully valued at an institution. Some organizations operate with the assumption that fundraising exists outside of institutional programming and general engagement. Fundraisers are expected to “do their thing” and bring in money, separate from institutional staff (whether they be program managers, faculty, physicians, or CEOs/Presidents). What this dynamic effectively communicates across an organization is that, not only is development somehow less related to the institutional mission and impact, but also that the happiness and engagement of those who do development work is a lower priority.

Something Worth Reading: Employee Satisfaction Doesn’t Matter (from LinkedIn)

I’ve heard a lot of buzz about this article on LinkedIn. The article, entitled “Employee Satisfaction Doesn’t Matter” is written by Jim Clifton (CEO at Gallup) and asserts that focusing on job perks and striving to be atop “best places to work” rankings doesn’t actually improve performance. He continues to argue that:

Employees don’t want to be “satisfied” as much as they want to be engaged. What they want most is a great boss who cares about their development, and a company that focuses on and develops their strengths. Trying to satisfy employees’ appetites for free lunches, lattes, and ping pong tables is giving people something they don’t deeply want — and that isn’t natural or good for them.

There are a few things to consider about Mr. Clifton’s assertions here:

  • First – the article and study that he references are incredibly interesting. You can find the summary here and the report in full here. Its data indicates a point that I think Mr. Clifton neglects to emphasize in his article: that both superficial perks and traditional benefit incentives pale in employee impact when compared to more strategic engagement.
    • It would be interesting to see what impact specific incentives have not on performance, but on recruitment. Stronger candidates are likely unable to really assess employee engagement. So, while they may not play a larger role in employee performance, it is entirely possible that being a “best place to work” attracts higher caliber candidates initially. In a field like development where the talent pool is extremely limited – it is difficult to rely on selectivity of candidates to build a stronger program (as the Gallup report advises).
  • There is the implication here that employee satisfaction is irrelevant to effective management. However, neither Mr. Clifton’s article or the full report actually benchmark, define, or attempt to measure satisfaction or assess its correlation to employee engagement. It seems that they use the term “satisfaction” to loosely cover everything that is not considered engagement. Plus this approach allows them to use a title as eye-catching as “employee satisfaction doesn’t matter.”
  • Clifton’s strongest point is that management is largely responsible for establishing and reinforcing a culture of employee engagement. “A winning culture is one of engagement and individual contribution to an important mission and purpose.”

 

Other interesting data points from this report that I found include:

  • The percentage of employees across the US who are engaged has not changed much at all since 2000 (it remains around 30%)
  • Companies with less than 10 employees had the highest ratio of engaged workers.
  • Organizations who are in a hiring phase have 30% more engaged employees than those who are cutting jobs (not a surprise there)
  • Millennials, even when engaged, are more likely to look for new jobs and opportunities.
  • Vacation time is not necessarily a good tool to attract your ideal talent. “Engaged employees who took less than one week off from work in a year had 25% higher overall well-being than actively disengaged associates — even those who took six weeks or more of vacation time.”
  • Employees who spend part of their time working from home are, on average, more engaged and put in more hours than their counterparts.
  • Remote Workers: Balancing Collaboration With a Sense of Freedom

 

 

So how can we apply this data to the non-profit sector and fundraising? There are a few implications that fundraising managers and leaders should consider:

  • That flex-time and the ability to work from home can actually lead to better engaged employees
  • That engagement is driven by managerial attention and leadership. Strong team managers and leaders are hard to come by in the fundraising world (not coincidentally – in a recent BWF survey weak management or development team leadership was listed as a leading cause of dissatisfaction among frontline fundraisers). Development shops need to be proactive not only in the hiring and recruitment of their talent, but also in the investment and cultivation of strong managers, which results in better retention and performance results.  Frontline fundraisers in particular require a combination of direction from and empowerment by management.
  • That cause and passion about the institution matter. We’ve touched on this before; fundraisers care and are driven by your institution’s mission and impact. The more you can celebrate their contributions to the cause and integrate their activities with the overall culture and impact of your organization the more engaged they will become.

 

We will talk some more about creating and supporting effective managers in a later post. In the meantime – enjoy the end of the fiscal year!