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It takes just one employee with bad intent to disrupt office dynamics. James and VirtualDOO’s Lloyd Thompson discuss what to do when this happens, and how to avoid it in the first place.
They talk about the black box scenario, where a key employee grasps control of a process to maintain the upper hand.
Lloyd talks about the effect this has on the founder and on workplace dynamics.
And our experts illustrate from experience that there is no such thing as an indispensable employee.
Table of contents
1. Not a new scenario
2. The difficulties of a black box situation
3. What it means for the founder
4. How the problem impacts the team
5. What to do if it happens to you
6. Preparing to let the offender go
7. How James handles a team member’s departure
8. Another consideration when someone leaves
9. The value of cross-training
10. The role of core values
11. This episode in summary
Not a new scenario
There’s a situation Lloyd has seen a few times now, where a team member is holding on to some key processes and is unwilling to share them with the team.
It could be a power play, or some kind of insurance. Either way, it’s difficult for the founder, who may feel blackmailed and unable to extract what he needs from the employee.
In some cases, too, this same employee may make demands as to the responsibility or the compensation he wants, and the founder will find it hard to say no.
The difficulties of a black box situation
The word that comes to mind is compromise, says James. He’s seen it often, and has a term for it, too – a black box.
The team member is holding on to a black box, and only they know what’s inside. In a service business, they may try to convince customers that the box is so valuable they can deal solely with the team member, apart from the company.
This is a point of concern for the founder, as well, who may fear this key employee could leave, taking black box, customers and even maybe some of the team with them.
Such a team member typically resists training anyone else on what they do. They could actually burn anyone new who comes on, who could be a threat to the control they have.
And they may be reluctant to take leaves, maintaining a wall of opacity around their actions that they believe makes them untouchable.
What it means for the founder
Sometimes such a person may just be insecure, not feeling safe. They may not feel their environment empowers them to share information while keeping their job.
In such cases, it often points back to the founder. They may have their own fears of conflict, of disagreeing with people.
They might avoid reviews, meetings, or simply checking on team members. Communication becomes paralyzed and toxicity builds up.
The rest of the team sees this, and the performers, those who are transparent, may resent it. This can lead to staff churn, and more emotional stress for the founder whose vision isn’t being realized.
How the problem impacts the team
The effect on the team is massive, says Lloyd. It feels unfair to those who play by the rules, and the longer it goes on, the bigger the impact.
They lose respect for the founder, and as the offender continues to be treated better than they are, they may consider leaving, or worse, creating their own black box.
It could become the case of one bad apple spoiling the rest of the crate, and the whole thing becoming rotten.
It’s fixable, though, says James, which they’ll get into shortly. It is, admittedly, a messy part of being an entrepreneur – if you’re employing humans, you have a massive responsibility, not just to you, but to each of the individuals, and a team as a whole.
As an employer, you have to know how to show employees they are valued.
What to do if it happens to you
In terms of action steps, says Lloyd, you start by reducing the key person risk – you can’t keep depending on that key person.
First thing is to stop giving them more responsibilities.
Won’t they be aware of that, asks James? Won’t they leave immediately or call out the founder on it?
It will be a gradual thing, Lloyd says, and not targeted specifically at the one person. You might for instance, drive an SOP initiative across the organization, where everything needs to be documented.
That may be the part where the person resists, even tries to poison the other team members, says James.
Preparing to let the offender go
You’ll have to start thinking then of absorbing that person’s responsibilities with the rest of the team, says Lloyd. Consider if they have capacity to pick up his load, or if you need to hire someone else.
That’s James’s first contingency when there’s a key person role, providing for when they might leave, before they even create a black box. Five years down the line is much too late.
There’s no such thing as an indispensable employee. James’s grandfather once said to him, Son, take your hand out of a bucket of water and see what hole it leaves.
Things re-form; people step up. So it’s not a matter of choosing key employee retention over the good of the business.
How James handles a team member’s departure
When someone leaves James’ team, which is rare, he takes a list of their tasks and auctions them off to the rest of the members.
James has always thought of a role as a collection of tasks. So he lets people choose the jobs they’re interested in, and often they learn a new skill.
Another thing James does when someone leaves is, after distributing their tasks, he gives everyone a pay bump. One, it acknowledges they’re doing more work, and two, it makes them miss their former teammate less.
Lloyd thinks the task auction is brilliant. It’s not pushing tasks onto people – they take on the things they want to do.
And James has a rule in his team, the Noah principle. Two people should know every task in your business, because you must assume that for whatever reason, everyone may leave.
Another consideration when someone leaves
Lloyd wants to mention something else. If you suspect someone of having ulterior motives, and feel they’re leaving, one of the first things you want is to have all your passwords in a password safe, like OnePass.
People who don’t like you can do some pretty dark things if they leave and still have access to your systems.
When someone leaves James’s team, no matter the reason, they change all their passwords as a matter of protocol. It’s part of their resignation checklist.
The value of cross-training
James also has everyone on his team train at least one other person on everything they do. Not so they can be sacked anytime, but so they can have annual leave, time off with their families.
It’s so that people can pitch in if things get busy. It’s all about longevity.
And you also ask them to step up, says Lloyd.
That’s it, says James. How can you level someone up when they’re stuck in a particular role?
Everyone in James’s team has gained experience over the 10 years or more they’ve been with him. He’d say each one is three, four or five times more effective than a new hire.
And they share and collaborate on what they do. They have a great teamwork dynamic.
The role of core values
And this is underpinned by their values, says James, one of which is communication. Having a black box would be anti-communication, and grounds for performance reviews and exit.
Lloyd has something similar, enable self and others. It’s not just about enabling other people in their team, it’s also about enabling the clients, to make them better.
Part of the reason you let go of a toxic team member, he says, is probably because you didn’t hire well in the first place, or you didn’t take your core values into consideration.
So many people when they’re hiring focus just on the skills. But you’ve also got to focus on, do they want it? Do they have these core values? Do they really understand what needs to be done?
That’s the first lens Lloyd thinks of: are they adhering to these core values? Are they going to fit with the team? Are they a team player? So important.
That’s the bulk of what they do in James’s recruitment. He doesn’t worry so much about the skills, because they can skill people very quickly in our business – they have SOPs, and they can share with someone else.
This episode in summary
The key takeaways for dealing with or avoiding an over controlling employee, James would say, are:
– Hire based on values.
– Reduce key person dependency.
– Use centralized passwords and have control of your assets.
– Have SOPs that are shared and known by at least two people for everything in the business.
– Share responsibilities; when someone leaves, auction off tasks to people who are interested in them.
– Hire before you need it, so you’re not stuck when someone leaves.
And of course, says Lloyd, if you’re a founder and this all sounds difficult, could you be missing a director of operations?
They do everything, says James. They identify what you’ve got in place; they’ll review all your KPIs, your SOPs; they’ll see each of the team members and what they’re actually doing. They’ll translate that according to the vision of the founder and see where the gaps are, and then implement the people and the systems to get you there.
Lloyd is James’s favorite DOO, and you can reach him by email at [email protected].
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Great points! Much better to deal with things effectively whilst the person is still employed. There was a recent Queensland District Court case where some employees departed with a whole lot of confidential and copyright information and set up a competing business. Their original employer was successful in getting over $100k worth of damages, but the events happened in 2019 and the Court’s decision came down on 25 November 2022. That’s a long time to be in dispute and the legal costs probably made the whole exercise financially neutral or a loss.