I hate firing people.
Of the hundreds of responsibilities that fell to me in my four decades as an entrepreneur, letting someone go was the most difficult. Unfortunately, I’ve had way more experience at it than I ever would have wished for.
In some cases, I’ve had to fire people for cause. And I’ve done a handful of “reductions in force,” those bulk layoffs that larger companies sometimes use to try and arrest their slow slide into irrelevance.
But by far the hardest is having to fire decent people for reasons that may have nothing to do with them, except perhaps being in the wrong place at the wrong time.
There are a few reasons I’ve found myself in this situation:
The Pivot – Guiding a company to a repeatable and scalable business model requires experimentation, flexibility, and lots of role shifting – so it’s not unusual for an employee who is indispensable in December to be irrelevant in January. For example, when Netflix launched its streaming service in 2007 we hired brilliant, highly specialized engineers to build the data centers we needed to store and stream that content. But only a few years later, after deciding to outsource our data infrastructure to AWS, the need for world-class data center engineers was no longer needed. These aren’t the type of people who are happy to “move over and work on search” so the conversation becomes “let me help you find a better job somewhere else”.
The Upgrade – As a new company with a big idea and not much else, you hire the best you can. But things go well, you get some traction, and before you know it you’ve got a chunk of Series A money in the bank and you’re ready to scale. Even better, you find that all that VC validation has given you the ability to attract big-league talent. That’s when it becomes clear that the 20-something you persuaded to be your VP of marketing when you were 6 employees and working out of your spare bedroom, may not be the right person to run marketing now that you are 100 employees and dealing with a real marketing budget.
The Pruning – We all talk about how we only want to have A players, but most people don’t have the fortitude to do what it takes to actually make that happen. The hard truth is that having a workforce that is materially above average is less a matter of hiring well than it is a matter of being prepared to deal with your mistakes. If you’ve ended up with a C player, the best way to address it is to move out the C so that you can take another pass trying to land an A.
Firing someone in any of these circumstances is brutal regardless of your position, but for a start-up CEO it can be even more excruciating because in many cases you are firing someone you spent months convincing to give it all up and set sail with you … stand with you … take a risk. And someone who worked tirelessly to help make your dream happen.
That’s when you know you’re really a CEO. When you have to sit down with a friend and explain that their skills, however formidable, are no longer up to the requirements of the position. Or that you’re bringing in someone from the outside to be their boss. Or that you simply can no longer afford to keep them around.
As decent human beings, we always want to do what’s best for every one of our employees, and when someone’s not working out, it’s tempting to “find a spot for them” so that we can keep everyone in perpetuity.
But we have a deeper responsibility, which is to consider what’s best for the many other stakeholders in this venture – many of whom took equivalent leaps of faith with their time, talent or money – and are expecting you to do everything in your power to bring them home safely, regardless of how unpleasant it may sometimes be.
These are the soft skills that are essential to success in entrepreneurship, and it’s why I’m so excited to have you hear episode 11 of the That Will Never Work podcast which released today.
My guest is Joseph, the CEO of a small but growing company that just received its series A and Joseph is ready to take things to the next level. But rather than want to talk to me about marketing, tech, or any of the other uses for that new money, Joseph is concerned about culture. Specifically, what will happen to the culture he’s painstakingly cultivated as he begins to rapidly bring on new employees, and what he should do if he realizes (as he inevitably will) that the employee who was great in an 11 person company, is no longer the right one for the next phase.
If you’re at all interested in corporate culture and how it can impact not just the potential success of your company, but your own ability to find some level of balance in your life as your company grows, this is the episode for you.