Great points Leigh.
The side projects can be useful/productive, they just need to be managed correctly. I recently read an article from a Google engineer about how their 20% free time works (http://www.nytimes.com/2007/10/21/jobs/21pre.html) - seems like a great concept.

As for noisy customers, we have an EOS client who, every year, develops their dirty dozen list - their bottom twelve customers, and then develops a plan to either turn them into model clients or get rid of them. Typically 80% of revenue is from the top 20% of your customers anyway. Life's too short...

And I have a quick test for squeaky employees (actually all employees) - ask yourself three questions about them relative to their job/seat - do they Get it? do they Want it? and do they have the Capacity to do it? (aka GWC). If the answer to any of the three questions is no, you got the wrong person in the seat. Sometimes you can overcome the capacity issue, but if they don't get it, or don't want it - you need to make move.
Thanks again for the insightful post!