The 2 Hardest Conversations You'll Have With Your Top Talent

Episode #410 The 2 Hardest Conversations You'll Have With Your Top Talent

BETTER LEADERSHIP IS THE START

Your top talent doesn’t always quit because they’re unhappy. Often, they simply can’t see what their next move is. And if that’s the case, it’s not their fault; it’s yours.

Every leader I talk to at the moment is obsessed with retention. It feels like it’s getting harder for them to hold onto their top performers. Job tenures are declining, but the averages often mask the real story.

Some of that decline is likely due to good leaders removing poor performers sooner.

But some of it’s more likely to be a symptom of the dumpster fire that many companies can’t seem to extinguish: their best people leave because leaders don’t deal with the underperformers.

Same statistic, masking two completely different issues.

In this newsletter, I explain why a scarcity mindset entices good leaders to do dumb sh!t by playing defense at exactly the wrong moment; then, I walk you through the two hardest conversations that you’ll have with high potential talent:

1. The ones who have nowhere to go; and
2. The ones who think they’re ready, when they’re actually not.

If you get these wrong, you’ll lose your best people when it could have been avoided. But if you get them right, you’ll get more out of them for longer… even though you know you might lose them eventually.

It doesn’t matter what your team’s structure is. It doesn’t matter whether or not a promotion opportunity exists in your team. Your job as a leader is to develop, grow, and stretch every individual to bring out their best.

STAFF TURNOVER IS INCREASING

The CEOs and senior executives who I work with have a laser-like focus on retaining talent. But it feels like it’s getting harder to keep their top people engaged.

In Ep. 404: 8 Surprising Ways to Reduce Unwanted Turnover, I looked at the four big “do”s and the four big “don’t”s of leadership that are going to have an impact on your ability to retain your top talent.

This generated a bunch of chatter in our leadership community. So, I decided to take a step back and pull some data to see what’s really going on.

I asked Claude and Chad, my AI research team, a simple question: “Is overall employee turnover increasing, decreasing, or stable?”

The most recent report from the U.S. Bureau of Labor Statistics tells us that the median job tenure is down from 4.1 years to 3.9 years, which indicates staff turnover is increasing.

It probably won’t surprise you to hear that this is driven by the younger generation:

• In the 55 to 64 age group (my demographic), the median tenure is 9.6 years; however
• In the 25 to 34 bracket, it’s only 2.7 years.

We can’t really intuit that much from these high-level numbers. A lot of insights get lost in the averages. There’s nothing to really tell us why this decline in tenure might be occurring.

For example, if we believed that the higher turnover was driven by poor performers being removed from their teams faster, that would be hugely positive. It would reflect stronger leadership, setting higher standards, and holding people to account for their performance.

So, no cause for alarm, right?!

If, on the other hand, we believed it was being driven by poor leadership, which led top performers to self-select? Well, that would put an entirely different complexion on those numbers.

It’s hard to know how to attack a problem without identifying the root cause. But one thing’s for sure: you know who you’d be happy to see go and who you’d be sad to see go.

One is desirable turnover, and the other is undesirable turnover. You’re trying to maximise one and minimise the other.

Having a focus on retaining, growing, and developing your top talent is essential, but it’s also critical that you overcome your fear of losing the very people who are a drag on team performance.

OVERCOMING THE SCARCITY MINDSET

When the job market is tight, it’s obviously harder to find the right people, and that can push you into a scarcity mindset. 

When you have a scarcity mindset, you respond entirely differently to virtually everything: you become really defensive and, instead of thinking about winning, you start to think about not losing.

It’s like a football team that builds up a big lead in the first 15 minutes, and then spends the remainder of the match trying to protect that lead.

The other team senses a shift; they see the door open just a crack, so they start to become more aggressive. They smell the weakness, and as soon as they make some inroads into that deficit, they become emboldened.

Have you ever seen a momentum shift like this?

I love a good sporting analogy, and I can’t think of a better example than Superbowl LI in 2017.

The New England Patriots (might be my team), were getting an absolute shellacking from the Atlanta Falcons. The Falcons led 28-3 late in the 3rd quarter. That meant the Patriots would have to score at least four times in the final 17 minutes, if they wanted to win.

This was a huge ask. In fact, it was almost physically impossible. At one point, the Falcons’ chances of winning were estimated to be 99.8%. And certainly, the people who’d attended the watch party I was at clearly thought it was all over: by the end of the 3rd quarter, the crowd had dwindled to a tiny handful of diehard NFL fans.

But the Falcons were protecting their lead, and the Patriots smelled blood. They drove the length of the field four times, eventually tying the score at 28-28. As they went into overtime, the Patriots had all the momentum, and they scored one final touchdown to win 34-28.

From being 28-3 down, they put on 31 unanswered points to win the Superbowl.

Now, think about this in the context of your team. As soon as you become defensive, you subconsciously drop the standard. If you’re hellbent on protecting what you’ve got, you won’t want to rock the boat. You’ll just want everything to stay on a nice even keel.

You might even be sitting on a proverbial 28-3 lead… but what message are you sending to your team?

I’ve had senior leaders say to me:

• “Yeah, he probably needs to go, but I’ve got no one to replace him.“; or
• “I just need stability in the team at the moment.“; or
• “It would put too much pressure on the rest of the team if we lost him now,”

… which is complete bullsh!t.

The person you’re talking about… the one that you freely admit shouldn’t be there… well, guess what? He smells the weakness. And instead of striving to improve his performance, he doubles down on his apathy and his passive-aggressive defiance.

And that is the point at which you are most at risk of losing your top talent.

DECISIONS REST WITH THE INDIVIDUAL

Remember, you’re the leader: you get to set the tone, the pace, and the standard for your team; and you determine whether your team plays offense or defense.

The eight tips I gave in Ep.404 were all about how to lead the team better, but sometimes the situation can’t be resolved as easily as you’d expect.

I’m going to look at two of these scenarios in detail and give you some tips to deal with them. But there’s one important principle I want to highlight before we step into them:

It doesn’t matter what your team structure is; it doesn’t matter whether or not a promotion opportunity exists in your team; your job as a leader is to develop, grow, and stretch every individual to bring out their best.

That’s it!

The really good ones are all highly ambitious. They’ll be looking to scope out their next role. And if they can’t see it clearly in the current structure, well, of course they’ll be tempted to go somewhere else. To be clear, this is undesirable turnover, but that’s okay.

Your focus should be to maximise the talent in your team, getting the most out of every single person for as long as they’re there. You can’t be overly protective, and you can’t hoard your talent: you’ve got to play offense.

So, let’s look at the two scenarios I mentioned.

1. WHEN OPPORTUNITIES ARE LACKING

There could be a number of scenarios that apply here. Obviously, the higher up you go, the less opportunities there are. It’s that simple.

If you’ve done the work to build a high performing team, it’s likely that you’re going to have more than one high potential leader who could arguably have a claim on an opportunity at the next level up.

Every individual needs to make their own assessment as to when a role is likely to come up, and what the likelihood is that they’ll be appointed when it does.

Several years ago, I had to make the choice to either stay at Aurizon or accept the CEO role at CS Energy. I figured that on the balance of things, I was likely to be appointed to the next level at Aurizon; and there was really big money in that role. But I had no idea when my boss would leave, so I chose to take the role at CS Energy.

As it turns out, he left about six months after I left. But looking back, I made the right call, for the right reasons, at the right time.

The key here is that, if you have a talented individual who doesn’t have a clear path forward, you have to call it out: you can’t be coy; you can’t pretend that a position will magically appear when they’re ready to be promoted.

Of course, nothing is 100% certain, but you have to be clear about the probabilities. So, here’s what I used to do.

An essential component of any performance discussion is the development plan. In 1:1 meetings, I would talk specifically about their next steps, and I was always very upfront with them about a few things:

• Where does the organisation see you in terms of your performance and your potential?
• What would be the natural next step for you?
• Where would you need additional capability or experience to be seen as a credible candidate for that next level up?
• Are there any opportunities in the company right now that look promising in a similar timeframe to your expectations and ambitions?

Quite often, it was clear what the individual needed to do to get to the next level. What was less clear was which roles might be available when they were ready.

So, I had a very clear message for them:

“I don’t know what your next role might be: there’s certainly nothing here at the moment that seems to fit the bill, but that’s not my focus. I’m more concerned about bringing out your best, and preparing you for your next role, whenever and wherever that might be.”

I was true to my word. Many top performers stayed for longer than they would have otherwise, because they were growing and being challenged every day. And when they started to hit that plateau, they looked around for their next challenge.

But here’s the bonus: when they eventually left, they made room for a high potential leader below them to step up. This is what kept the talent pipeline flowing.

2. WHEN THEY THINK THEY’RE READY, BUT YOU DON’T

Okay, this gets a little trickier. Everything I just described about that 1:1 scenario is exactly the same as it was for the high performer who lacked promotion opportunities: “How do we see you, and where do we think you’re heading?” etc. etc.

But here’s the big difference. In the first case, there was broad alignment between their ambition and the organisation’s assessment of their potential.

In this case, there’s a substantial gap between their ambition and the organisation’s assessment of their potential. So the conversation you have to have is an order of magnitude harder.

I’ve had to sit down with some really good people and explain what that gap looks like; but to do anything else would be cruel. Your people have a right to know how they’re perceived, and to not be misled about their likely prospects for promotion.

This is why I’m so adamant that people should be told how they’ve been rated in a talent management process. I’ve worked with HR directors in the past who believe we should keep that stuff secret from our team, but I would always find a way to let my people know exactly where they stood, and what they had to do to change that perception.

At times, I would say something like this:

“You really need to improve this area of your performance if you want to be seriously considered for a role at the next level. I’ll help you, but first you have to want to do it. And then you have to be prepared to do the work. And maybe, over time, you’ll be able to change people’s perception of who you are. But if you can’t, at least you’ll be set up for a fresh start somewhere else.“

That’s not the easiest conversation to have but there are, in fact, harder ones. On the very odd occasion, I’d find myself saying something like:

“Unfortunately, I think this could be a fatal flaw. We’ve been working on it for a while, but it seems like it’s almost impossible to shift. I could be wrong… I’m no psychologist, but I feel as though until you get control of that unhelpful behaviour, you’ll really struggle at this level, let alone the next.”

Those conversations were incredibly difficult, but they were always honest, empathetic, and compassionate. And I think even though it clearly wasn’t what they wanted to hear, it was absolutely what they needed to hear.

Of course, you can’t pull off a conversation like that unless your communication skills are first-rate, and you are able to handle any conflict comfortably. These are skills you can and must learn, if you want to be a better leader.

YOUR TOP TALENT FLIES: ONE WAY OR ANOTHER!

Creating the right environment for your high potential talent is one thing, but there are often structural barriers to their progression. Instead of agonising over it, or trying to avoid the inevitable, you need to face the situation head-on, and be completely open with them about where they stand.

You have a duty of care to every individual you lead, and that duty means stretching and challenging them to bring out their best.

You may eventually lose one of your most talented people to another company, if they have nowhere to go in yours.

But if you don’t stretch them, they may well become stagnant. Either way, you’ve just lost an individual who should have always been high-potential talent.