Dealing with Divisive Employeees

In one of my gigs as an interim CFO, the company employed a junior employee who had recently been promoted into management. She would smile in your face and stab you in the back. She did not pose a threat to me but, admittedly, was annoying. It took me a few months to realize what she was doing and her personality traits but I became fully aware quickly thereafter. Several of my direct reports had complained about her and I had given them action plans to deal with her. After my eyes opened, those action plans still held but I felt their pain.

Divisive employees stress the team and lowers morale & performance.

This person was in charge of the engineers and projects. She did a good job of insuating herself into the company’s main business. At first blush, she seemed very capable for the job. She would respond to customers inquiries quickly and so most of the customers who interacted with her the first few months loved her. However, the engineers began complaining to me. They said she’d say one thing in public, then ream them out in private, behind her closed office door. Their morale was already low due to a voluble owner who was prone to shouting and doing things on a whim then changing his mind. The bright spot, in the engineer’s mind, was the president who came from a technical role and supported and praised them.

I noticed this junior employee attempted to undermine everyone whom she felt threatened by. She would attempt to cast doubts about them in conversations and discussions of their work. But she could never back it up with numbers. She would make accusations which, when confronted directly with all involved, she would retract stating she was misunderstood. It was funny yet sad. But most of all she was highly divisive.

She had joined not long after the president initially joined the company in a “lesser role” and had, apparently, protected him when he came under fire from the primary owner and a minority shareholder who also had a management role and ran the company authoratatively. When the minority shareholder was bought out and left the company, I believe he felt tremendous loyalty for the junior employee. Hence, he promoted her and provided her with a fair amount of responsibility.  When she overstepped her boundaries and did not perform well, he protected her from criticism. Unfortunately, in my estimation, he put on blinders. She was highly insecure and needed regular mentoring and coaching from someone who didn’t have blinders on. She did not have the capability to do all she was asked to do and was overwhelmed but was afraid to ask for help. She compensated by tearing everyone else around her down. The only person who escaped her /criticism was the president.

I’m not writing this to rehash an issue. Like I said, I thought it was sad and did not directly suffer from that “bad apple”. But my employees suffered. And the work of the engineers suffered. I left the company and a number of employees left in the months thereafter. (Of course, this company had very high turnover of 25% so this was nothing new. Remember, I said the owner was voluble. He would either fire people or they would quit after they reached their limits.)

I have been asked to return but I don’t think I will. I lost respect for the president when he would not handle the situation with the junior employee. I knew I would never return under the former owner (who, by the way, NEVER yelled at me) unless he’d entered into a definitive agreement to sell the company. I like to work where employees are happy and employee morale of one of the first things I address when I enter a restructuring situation (after cash flow, of course!). But the president overall held promise. He never did fire that employee. She eventually left so who is to say a similar situation wouldn’t happen again.

Lest you think I am the only one, there was an excellent expose article in Fortune about the ousting of Jeff Kindler the former CEO of Pfizer. The situation was extremely similar, just the stakes were higher. According to the article, the head of HR, Mary McLeod was highly divisive. Morale began slipping, then plummeting and even other executives began seriously contemplating departure (i.e., They interviewed for positions at other companies or considered retirement). The tide finally turned when one executive sent a memo to the Board of Directors about the problem. The executive and senior management teams had been dealing with this divisive woman for a few years and had tried to get their boss, Mr. Kindler to take corrective action, whatever that was to be. Rein her in. Limit her power. Restructure her reporting. Get rid of her. Something. All to no avail. Like in my situation, the CEO saw the head of HR as “having his back” and did everything he could to protect her.

In the end, according to the article, the Board decided that the CEO, Mr. Kindler, exercised very poor judgment in managing his direct report. As a CEO, the most important role is to motivate and inspire your team to do their best and the Board decided Mr. Kindler had done a poor job in that role. Furthermore, the company’s lackluster performance supported their assessment. Consequently, the Board fired the head of HR, then removed Mr. Kindler, replacing him with the president, Ian Read. Fast forward. The company’s performance has improved already and the management and employee morale is high.

Divisive people are destructive and toxic. They’re like an infection which drags down morale and then performance and has potentially serious repercussions for the business. Deal with them as soon as you notice or the problems is brought to your attention. If you act early, you may be able to coach the person into becoming a productive team member.  If you are unable to do so, you may be able to isolate them and stop them from infecting the team. If not, permanent separation may be the only answer.

For more on the subject, I recommend reading the Wall Street Journal article in Monday’s, 10/24/11, Journal Report entitled: How a Few Bad Apples Ruin Everything: What harm can a handful of nasty or incompetent employees do? A lot more than you think. Or you can check out the Fortune article I referenced, Inside  Pfizer’s Palace Coup, in the August 15, 2011 issue.

Your thoughts?