06/04/2014 06:00 pm ET Updated Aug 04, 2014

4 Reasons Why You Might Be Tolerating Incompetence

We all hope we can take our incompetent employees and somehow make them competent. We put them on 90-day plans, give them additional training, and coach them. But in the end, we usually find ourselves terminating them. That's because there is no such thing as a spontaneous recovery from incompetence. If they are incompetent now, they will always be incompetent.

As CEOs, we believe that people can change, and that we can be a catalyst for that change -- so we hang onto people who are clearly not competent in their current roles. I have seen this continuously in my business and coaching career. Typically, when I start coaching someone, the first thing I ask them to do is rate their direct reports on a scale of 1 - 10 -- with 10 being a definite, solid "A" player. I am amazed at how many of my CEOs rate their direct reports as a 5, 6, or 7. There is no way you can take your organization to the next level with this low caliber of management. In today's competitive environment, you need to have a management team of 10s, or at least 8s and 9s that have the potential to be 10s -- or you are doing yourself a great disservice.

Why do we hang onto people who clearly aren't capable?

1. Loyalty

They were with us from the start, and helped get the company up and running. We feel that we owe them something. Sadly, they may have been good when the company was a small startup, but when it's $5 million, or $10 million, or $25 million in sales, these people no longer have the skills to work effectively at that level. They have hit their Peter Principle level of competence -- they can go no further. We find ourselves sending them to classes to learn how to manage people, how to conduct interviews, or how to read a balance sheet -- but we cannot give them the skills they need to be successful, such as attention to detail, empathy, vision, follow-up, thoughtfulness, creativity, or problem solving. If they don't have these traits now, they probably won't acquire them later. These traits are part of our personality -- our very DNA.

2. Self-image

As CEOs, we think we are omnipotent -- we can solve any problem. Therefore, we hang onto them and spend money trying to teach them how to be competent. We believe that we can "fix" them. After all, we fix problems every day. This problem should be no different. So we just keep trying, eventually sending them to every possible class, seminar, or workshop we can find. The end result is a well-educated, but incompetent employee, with a lot of diplomas on his wall.

3. Admitting our mistakes

How could we possibly have an incompetent manager on our staff? We certainly know how to hire, train, and mentor good employees. Having an incompetent manager working for us is a sign of failure on our part, so we exhaust all remedies trying to raise their level of competence because it reflects on us.

4. Our belief in fairness

We want to be fair. We want to show that we care, and that we made an effort. Compassion is fine, but when it is misguided, it just allows problems to continue far beyond a reasonable timeframe. How about being fair to the company and the rest of the management team?

The end result is that we spend a lot of money, expend a great deal of our own energy, and lose weeks, months, and sometimes years, before we finally pull the trigger and make the person available to the industry. We never seem to learn from this, repeating it over and over again with various employees.

You're not doing anyone any favors

I have found that in most cases, the employee we finally terminate is actually relieved. Believe it or not, they usually know they aren't competent. They probably know they are letting you down -- and they most certainly know it's only a matter of time before it catches up to them. That's no way to live. They need to go back into an environment where they can flourish with their level of competence, perhaps another startup or small company. You aren't doing them a favor by hanging onto them.

The bottom line is that you need to recognize incompetence when you see it, and stop engaging in heroic efforts to fix it -- 90-day plans, seminars, and counseling won't provide a miraculous cure. Cut your losses early, and find the right people to take you to the next level. I'm a big believer in the saying: "Hire slow, fire fast."