It’s mid-year performance review time, folks, which means managers all over are having uninspired and vague feedback sessions with their employees. Most will, of course, blunder their way through it. For them, FOT and I offer a sample from Jeffrey Quinn, a guy who appears to know how to deliver 90 mph fastball direct feedback. Specifically, he shows you how to hit the high potential average performer.
Here’s the context: Quinn ran a company here in St. Louis called Solutia. They were a train wreck when he took over, but then Quinn spent eight years turning it around and sold it to Eastman Kodak. Quinn and his leadership team cashed out, then started an investment firm, Quinpario Partners, which looks around for underperforming companies to buy.
They found Zoltek, another St. Louis based firm. Quinn reached out with an above-market offer to buy-in to the company. The CEO of Zoltek gave them the brush off, said they were doing fine and had lots of potential. Quinn has probably had plenty of performance conversations when people aren’t reaching their potential. He has no trouble being direct. Check some key excerpts from a letter he sent the CEO of Zoltek, with my comments in bold underneath.
Over the past several months, it has become even more apparent to us that Zoltek is underperforming and that a significant opportunity exists to dramatically improve operational performance and enhance shareholder value.
You have potential, but you’re not close to where you need to be.
Your recent presentation at the annual meeting brought this fact into even clearer focus, as your analysis of where the Company is today, compared to 2008, seemed misguided at best….Notably, despite five years of heavy investment in capacity expansion and operational improvements, the Company’s operational performance continues to stagnate, as evidenced by (i) flat revenue and operating income and (ii) deteriorating gross profit and cash from operations.
There are plenty of reasons why you should be performing, but you’re not. Here’s evidence. (BTW, “misguided, at best” is just an awesome shot to throw at someone. Mix it in to your day today.)
This severe underperformance appears to be largely due to:
- heavy investment of capital without adequate financial returns
- unsuccessful execution on the Company’s strategic plan for new market and application development
- the Company’s failure to diversify operations or exploit new market opportunities
- the Company’s unrealistically upbeat assessment of its operational performance and continued failure to meet street expectations and,
- the failure to develop a globally-oriented organization to take the Company to the next level.
If you thought you could blow smoke at me and justify your underperformance, you’re wrong. Here are detailed specifics on why you’re stinking up the place.
It is therefore not surprising that during this same period, and virtually over any time period, Zoltek’s share price has dramatically underperformed both the S&P 500 market index and its publicly-traded carbon fiber peers.
And, here is a performance bar that shows unequivocally that you stink. Get it together.
Check. That. Out. Quinn hammers the Zoltek CEO like Lindsay Lohan hammers Red Bulls with Grey Goose. He lays the details out and backs it up with examples. This mid-year review season, if you have a manager dancing around the fact that they have a high-potential-average performer, show them this letter.