February 21, 2025 • 11 mins
Episode 54 – All Startups Should Use PIPs
Welcome to another episode of the Career Coaching Xs and Os podcast, where we unlock the strategies and secrets of career success. In today's discussion, we'll explore why all startups should use Performance Improvement Plans (PIPs). I'll share my recent consultation with a startup fintech CEO struggling to address underperformance among his senior team members. These individuals had agreements for equity in the startup at an agreed-upon trigger date, but the CEO hadn't defined the performance he expected from them.
Performance Improvement Plans are essential for supervisors and direct reports to address and resolve performance issues. As a startup leader, you should implement PIPs with all your employees from day one.
Do you want a copy of my PIP Guide? Sign up for our newsletter at https://www.ceyero.com, and we'll send it to you.
If you enjoy this podcast, please subscribe and leave us a comment on Apple Podcast, Spreaker, or your favorite podcast platform. To support this podcast as a Loyal Listener on Spreaker.com, please use this link: https://www.spreaker.com/podcast/career-coaching-xs-and-os--3047801/support.
******************
Want To Co-host An Episode of Career Coaching Xs and Os? If you want to be entered into a drawing where the winner(s) are offered the opportunity to co-host the Career Coaching Xs and Os podcast, please do the following:
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Want to improve your negotiation skills? Take the 100 Days of Rejection Therapy Challenge. The goal of the 100 Days of Rejection Therapy Challenge is to desensitize yourself to the pain of rejection and to overcome fear. Check out the website at https://www.rejectiontherapy.com/100-days-of-rejection-therapy. I took several challenges. Click the links to see if I got rejected during my negotiations: (1) Rejection 7: Speak Over Costco's Intercom - https://youtu.be/AycKKgP21fQ (2) Rejection 43: Hug a Walmart Greeter - https://youtu.be/GSjyly_C8pM Subscribe to Ceyero Consulting's YouTube Channel. Track my progress as I complete all 100
Challenges.https://www.youtube.com/channel/UC7lxMSEtBOAgNBOPrmA9O_w Need help launching your startup or small business? Please check out my book, #Guerrillapreneur: Small Business Strategy for Davids Wanting to Defeat Goliath, available on Amazon, Barnes & Noble, and Apple Books.
If you like the Career Coaching Xs and Os podcast, you might also like my other business podcasts, #Guerrillapreneur: The Art of Waging Small Business Warfare (Mastermind Interviews with Entrepreneurs, Consultants, and Business Mavericks) and #Gigging: Everything and Sharing Economy (news and predictions about the Sharing Economy).
Welcome to another episode of the Career Coaching Xs and Os podcast, where we unlock the strategies and secrets of career success. In today's discussion, we'll explore why all startups should use Performance Improvement Plans (PIPs). I'll share my recent consultation with a startup fintech CEO struggling to address underperformance among his senior team members. These individuals had agreements for equity in the startup at an agreed-upon trigger date, but the CEO hadn't defined the performance he expected from them.
Performance Improvement Plans are essential for supervisors and direct reports to address and resolve performance issues. As a startup leader, you should implement PIPs with all your employees from day one.
Do you want a copy of my PIP Guide? Sign up for our newsletter at https://www.ceyero.com, and we'll send it to you.
If you enjoy this podcast, please subscribe and leave us a comment on Apple Podcast, Spreaker, or your favorite podcast platform. To support this podcast as a Loyal Listener on Spreaker.com, please use this link: https://www.spreaker.com/podcast/career-coaching-xs-and-os--3047801/support.
******************
Want To Co-host An Episode of Career Coaching Xs and Os? If you want to be entered into a drawing where the winner(s) are offered the opportunity to co-host the Career Coaching Xs and Os podcast, please do the following:
- Buy My Book - Career Coaching Xs and Os: How to Master the Game of Career Development from Amazon - https://a.co/d/f7irTML
- Write a review for my book on Amazon - https://www.amazon.com/review/create-review/?ie=UTF8&channel=glance-detail&asin=B0CXMM24R1
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X.com - @ceyeroconsltg
Instagram - @ceyeroconsulting
Facebook - @ceyeroconsulting - Post a message on one of the Social Media platforms above stating that you submitted a review on Amazon. We will randomly select the winner(s) from the list of reviewers on August 31, 2024.
**************
Want to improve your negotiation skills? Take the 100 Days of Rejection Therapy Challenge. The goal of the 100 Days of Rejection Therapy Challenge is to desensitize yourself to the pain of rejection and to overcome fear. Check out the website at https://www.rejectiontherapy.com/100-days-of-rejection-therapy. I took several challenges. Click the links to see if I got rejected during my negotiations: (1) Rejection 7: Speak Over Costco's Intercom - https://youtu.be/AycKKgP21fQ (2) Rejection 43: Hug a Walmart Greeter - https://youtu.be/GSjyly_C8pM Subscribe to Ceyero Consulting's YouTube Channel. Track my progress as I complete all 100
Challenges.https://www.youtube.com/channel/UC7lxMSEtBOAgNBOPrmA9O_w Need help launching your startup or small business? Please check out my book, #Guerrillapreneur: Small Business Strategy for Davids Wanting to Defeat Goliath, available on Amazon, Barnes & Noble, and Apple Books.
If you like the Career Coaching Xs and Os podcast, you might also like my other business podcasts, #Guerrillapreneur: The Art of Waging Small Business Warfare (Mastermind Interviews with Entrepreneurs, Consultants, and Business Mavericks) and #Gigging: Everything and Sharing Economy (news and predictions about the Sharing Economy).
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
This is career coaching x's and o's, and I'm your host,
Mark Anthony Peterson, the founder and thought leader at Sierraro Consulting,
a small business strategy and technology consulting firm. A small
part of our practice is executive coaching. These episodes are
the summation of some of those sessions. Welcome to episode
(00:26):
fifty four entitled why all startups should use PIPS, Yes,
PIPS Performance Improvement Plans. This week I got the opportunity
to consult with the CEO of a fintech startup. The
(00:48):
problem he was having was poor performance from several of
his startup employees. Some of these employees were senior in
the organization, some were junior. Some have been promised equity
if they were still with the startup at the appropriate
(01:09):
trigger dates, and he wanted to take action before he
reached those dates. He was noticing a trend in performance
and didn't know how to address it immediately. I mentioned PIPS,
which he had no clue of what that stood for
(01:30):
or how to effectively deploy them in order to protect
his organization. The performance improvement plan aims to fulfill the
following goals. It could help you improve and sustaining the
performance that you're looking for. It could also help you
(01:52):
to address those performance discrepancies and identify a management process
that allows you to track in course correct. It can
provide the appropriate documentation so that if at any point
that employee has an issue with termination or suspension, you
(02:18):
have a documented process, agreed upon workflow that have been
signed off on by all parties. It provides a timetable
outlining the dates by which improvement is expected, so it's
not a black hole. It gives you clarity around the
(02:44):
desired performance and termination or suspension, and it establishes a
regular meeting for the supervisor and the staff member to
facilitate cooperation and ongoing communication. So every startup should be
(03:06):
using a PIP and it should be from day one
before you give the promise of equity or even the
promise of a job, because every hire in a startup
is extremely important. Take it from someone who has built
a startup, had a successful exit, and is building another
(03:28):
startup that each higher has a tremendous impact on the culture.
And that's exactly what I told the CEO. He started
as a solopreneur and brought on his first hire, that
first higher can control fifty percent of the startup's culture,
(03:53):
and if you don't have ground rules, when those new
hires are brought onto the start up, they could change
the expectations that you have for your business model without
you even knowing it. So by the time you get
to the fourth or fifth higher this sort of behavior
(04:16):
can emerge. If for senior members not meeting deadlines, not
showing up for meetings, not pulling their weight, and yet
they still have the promise of equity and the promise
of staying in that senior position, then that behavior will
soon be replicated and you don't want that in your organization.
(04:43):
How should you approach the pit process if you are
a manager going through this, well, first you have to
identify the specific performance issues, and for this Fantach CEO,
he knew exactly what the problems were. But you also
(05:04):
have to know the impact of the issues on the
startup or your department. And for this Fintach CEO, they
were pushing towards a March launch of their MVP and
because of this performance they were likely to miss it.
So he had a clear path for what the behavior
(05:28):
or clear understanding of what this behavior was doing towards
impacting the startups goals. You have to obtain the employees' feedback,
discuss the expected performance results, developed some objectives, including internal
(05:49):
and external resources necessary tofluence the improved behavior. You have
to define the action steps that will be taken by
the employee and the supervisor whoever's managing that individual, and
then you discuss the resolution and the decision on the
(06:11):
course of action. Now, this approach has to be modified
in some ways for an exempt employee and a non
exempt employee. For an exempt employee, the workflow can be
as simple as putting the person on a pit plan,
(06:34):
moving them to suspension if you don't get the desired results,
and then termination. But for an exempt employee, you start
with the pit plan. You give them a final written
warning before moving towards termination. Some firms have a separate
(06:57):
workflow that is tied to their annual will performance review.
The flow I just laid out can be implemented at
any time with the employee. For many startup CEOs, you
know exactly what I'm talking about. When I went through
tech Stars, I'd say half the teams that were in
(07:21):
my cohort suffered from this same issue. Underperforming employees senior employees,
the CTO, the CFO, the COO, many times splitting their
time and their work effort between the startup and other
(07:43):
initiatives that they were deeply involved in. Now why the
CEO was upset with that, because the promise of equity
is what was going to bridge the gap between what
they thought they were want worth financially in what they
would get with the success of the startup. So that
(08:06):
equity component, at least in the CEO's mind, secured the
type of human capital and dedication to the project to
make it successful. That's why I believe all startups should
(08:26):
be using this sort of a process to help manage
those expectations early on in the life of the startup
and certainly within businesses. This is already a regimented process
that HR helps you to execute. You don't want to
(08:48):
get blindsided. You don't want to find yourself in a
situation where your resource short and trying to meet a
deadline and wondering why you can't get your startup employees
to perform. Now, we have a guide that lays out
(09:09):
all of the expectations, the implementation steps. It shows you
some of the workflows that go along with implementing the
PIP plans with your exempt or non exempt employees. Is
that If that is something that you're interested in getting
your hands on, go to our website sign up for
(09:33):
our newsletter. We certainly will have links to that when
we send the next newsletter out. Or go to the
show notes and send me an email and I will
send you a PDF copy of not only our PIP plan,
but a resource, a PIP plan guide that walks you
(09:56):
through all of the potholes and radioactive areas that you
may run into and trying to execute this process. It
should be in every senior manager's toolkit. I hope you
found this episode helpful. If so, hit subscribe. Also give
(10:18):
us a like, and please continue to give us reviews
on the Apple podcast platform. I'd love for you to
listen to this podcast on speaker because when you do,
we get paid a little bit more and that's always fun.
Follow us on Twitter, Instagram, and Facebook at Cerro Consulting.
(10:42):
I know you would share this episode with your colleagues
because the best people listen to this podcast. If you
need more support for your career, please find us on
the web at cerro dot com. That's ce Y E. R.
Dot com and let us help you develop a plan
(11:02):
for your career. This has been career coaching ex's and o's,
and I am your host. Mark Anthony Peterson, Founder and
thought leader at Seerrale Consulting
This is career coaching x's and o's, and I'm your host,
Mark Anthony Peterson, the founder and thought leader at Sierraro Consulting,
a small business strategy and technology consulting firm. A small
part of our practice is executive coaching. These episodes are
the summation of some of those sessions. Welcome to episode
(00:26):
fifty four entitled why all startups should use PIPS, Yes,
PIPS Performance Improvement Plans. This week I got the opportunity
to consult with the CEO of a fintech startup. The
(00:48):
problem he was having was poor performance from several of
his startup employees. Some of these employees were senior in
the organization, some were junior. Some have been promised equity
if they were still with the startup at the appropriate
(01:09):
trigger dates, and he wanted to take action before he
reached those dates. He was noticing a trend in performance
and didn't know how to address it immediately. I mentioned PIPS,
which he had no clue of what that stood for
(01:30):
or how to effectively deploy them in order to protect
his organization. The performance improvement plan aims to fulfill the
following goals. It could help you improve and sustaining the
performance that you're looking for. It could also help you
(01:52):
to address those performance discrepancies and identify a management process
that allows you to track in course correct. It can
provide the appropriate documentation so that if at any point
that employee has an issue with termination or suspension, you
(02:18):
have a documented process, agreed upon workflow that have been
signed off on by all parties. It provides a timetable
outlining the dates by which improvement is expected, so it's
not a black hole. It gives you clarity around the
(02:44):
desired performance and termination or suspension, and it establishes a
regular meeting for the supervisor and the staff member to
facilitate cooperation and ongoing communication. So every startup should be
(03:06):
using a PIP and it should be from day one
before you give the promise of equity or even the
promise of a job, because every hire in a startup
is extremely important. Take it from someone who has built
a startup, had a successful exit, and is building another
(03:28):
startup that each higher has a tremendous impact on the culture.
And that's exactly what I told the CEO. He started
as a solopreneur and brought on his first hire, that
first higher can control fifty percent of the startup's culture,
(03:53):
and if you don't have ground rules, when those new
hires are brought onto the start up, they could change
the expectations that you have for your business model without
you even knowing it. So by the time you get
to the fourth or fifth higher this sort of behavior
(04:16):
can emerge. If for senior members not meeting deadlines, not
showing up for meetings, not pulling their weight, and yet
they still have the promise of equity and the promise
of staying in that senior position, then that behavior will
soon be replicated and you don't want that in your organization.
(04:43):
How should you approach the pit process if you are
a manager going through this, well, first you have to
identify the specific performance issues, and for this Fantach CEO,
he knew exactly what the problems were. But you also
(05:04):
have to know the impact of the issues on the
startup or your department. And for this Fintach CEO, they
were pushing towards a March launch of their MVP and
because of this performance they were likely to miss it.
So he had a clear path for what the behavior
(05:28):
or clear understanding of what this behavior was doing towards
impacting the startups goals. You have to obtain the employees' feedback,
discuss the expected performance results, developed some objectives, including internal
(05:49):
and external resources necessary tofluence the improved behavior. You have
to define the action steps that will be taken by
the employee and the supervisor whoever's managing that individual, and
then you discuss the resolution and the decision on the
(06:11):
course of action. Now, this approach has to be modified
in some ways for an exempt employee and a non
exempt employee. For an exempt employee, the workflow can be
as simple as putting the person on a pit plan,
(06:34):
moving them to suspension if you don't get the desired results,
and then termination. But for an exempt employee, you start
with the pit plan. You give them a final written
warning before moving towards termination. Some firms have a separate
(06:57):
workflow that is tied to their annual will performance review.
The flow I just laid out can be implemented at
any time with the employee. For many startup CEOs, you
know exactly what I'm talking about. When I went through
tech Stars, I'd say half the teams that were in
(07:21):
my cohort suffered from this same issue. Underperforming employees senior employees,
the CTO, the CFO, the COO, many times splitting their
time and their work effort between the startup and other
(07:43):
initiatives that they were deeply involved in. Now why the
CEO was upset with that, because the promise of equity
is what was going to bridge the gap between what
they thought they were want worth financially in what they
would get with the success of the startup. So that
(08:06):
equity component, at least in the CEO's mind, secured the
type of human capital and dedication to the project to
make it successful. That's why I believe all startups should
(08:26):
be using this sort of a process to help manage
those expectations early on in the life of the startup
and certainly within businesses. This is already a regimented process
that HR helps you to execute. You don't want to
(08:48):
get blindsided. You don't want to find yourself in a
situation where your resource short and trying to meet a
deadline and wondering why you can't get your startup employees
to perform. Now, we have a guide that lays out
(09:09):
all of the expectations, the implementation steps. It shows you
some of the workflows that go along with implementing the
PIP plans with your exempt or non exempt employees. Is
that If that is something that you're interested in getting
your hands on, go to our website sign up for
(09:33):
our newsletter. We certainly will have links to that when
we send the next newsletter out. Or go to the
show notes and send me an email and I will
send you a PDF copy of not only our PIP plan,
but a resource, a PIP plan guide that walks you
(09:56):
through all of the potholes and radioactive areas that you
may run into and trying to execute this process. It
should be in every senior manager's toolkit. I hope you
found this episode helpful. If so, hit subscribe. Also give
(10:18):
us a like, and please continue to give us reviews
on the Apple podcast platform. I'd love for you to
listen to this podcast on speaker because when you do,
we get paid a little bit more and that's always fun.
Follow us on Twitter, Instagram, and Facebook at Cerro Consulting.
(10:42):
I know you would share this episode with your colleagues
because the best people listen to this podcast. If you
need more support for your career, please find us on
the web at cerro dot com. That's ce Y E. R.
Dot com and let us help you develop a plan
(11:02):
for your career. This has been career coaching ex's and o's,
and I am your host. Mark Anthony Peterson, Founder and
thought leader at Seerrale Consulting
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