Verne Harnish, CEO of Gazelles Inc., an executive and strategic training consulting firm in Ashburn, Virginia, is advising his clients to upgrade their work forces while they can and to get rid of their "just good enough" mentality toward employees. "We hire too quick and let go too slow. A lot of entrepreneurs make excuses for their people," he says. "But I've never heard someone say they wished they'd moved slower on replacing an average performer."
Take a close look at unproductive employees who may be damaging morale. "Look at areas of your business where there are people who are dragging your department down," Challenger says.
But before you upgrade, be realistic. Look at the hard forecasts and numbers, Harnish suggests, and don't make too many changes at once. Without some planning and strategy, you can damage your credibility with your remaining employees-or have people running scared, which can also hurt morale.
Be aware that upgrading can decrease productivity in the short term when there are gaps between employees. DeLine's redesign took six months, and sales dropped with fewer employees on staff. "We lost a substantial amount of business in the first quarter because we weren't prepared to handle customers," he says. "But our company will make more because we've upgraded."
Finally, consider the biggest risk that comes with hiring a hot talent: mainly, whether that person will be willing to stick it out as your company grows. "When the economy heats back up, is your sense that this person will jump ship to get back on a more exciting bandwagon?" Harnish says. If you can live with the risks, go for it.