Firing Well ≥ Hiring Well

Firing Well ≥ Hiring Well

No matter how careful we are about vetting the people we bring “on the bus” (as Jim Collins from Good to Great calls it), we will inevitably make mistakes. Also, as a company scales, people who were once a great fit may get complacent or be outgrown.

This is true for employees, co-founders, advisors and external firms. It’s also one of the most painful parts of running a successful business, no one likes to say goodbye, especially when you’ve grown attached, or have been working together from the beginning. But the art of firing is as important, if not more, as the art of hiring.


Follow the Steps

Similar to hiring the right way, there is a standard process you should follow when someone needs to be let go. This is critically important for legal reasons, company morale reasons, and human decency reasons.

    1. Review past feedback. If the employee has only received positive reviews, you need to outline, in writing, how they’re not meeting expectations and then put them on a performance improvement plan.
      • If they have had poor reviews in the past, and you’ve already outlined how they need to improve, you can move on to the next step.
    2. Give them a heads up. Explain to the employee where they are falling short and how they can improve. In dull HR speak this is often called a “performance improvement plan”, which is often annoyingly shortened to a PiP. Thirty days is usually a sufficient internal metric to gauge whether or not the needed change happens.
      • Be as specific as possible on the behaviors you want to see change and the results you need to see happen. 
    3. Firing on a Friday is for pansies.  Terminating an employee sucks. It’s uncomfortable for you, it’s upsetting for them and it usually freaks the larger team out. Often people wait until Friday, late in the day, but this isn’t ideal. It means your employee has the weekend to stew on what happened, and potentially go down an unhealthy spiral of anger. It also takes away the option for them to immediately get to work finding a new role and reaching out to their network during the workweek. Since all good firings are planned, set them up first thing, on Monday. This also allows for you to meet with their team and explain exactly what is going on/soothe nerves.
    4. Be human. Yes, it’s best to have an employee leave the premises directly, but at the same time—have a heart. Most people will want to leave immediately after the awkwardness of being terminated, but if they need extra time gathering things and saying goodbyes, try not to be a jerk about it. Remembering the golden rule in this stage of firing well is vital. How would you want to be treated if the tables were turned?
    5. Be more generous than you need to be. I wasn’t able to do this in my last company, because we literally ran out of money, and it’s something that still haunts me. If you have to lay people off, whether it’s for cause or not (e.g. a reduction in force), try to be more generous than needed in terms of severance, extended benefit coverage, and resources available to help them find their next role. In the long run, an extra few thousand dollars will not make or break your business, and the good will engendered is worth its weight in gold.
      • Terminated employees will tell others about their experience, via social media, word of mouth, or Glassdoor. If you do have a Grinch’s’ heart, then at least think of severance in terms of brand protection.



Miscellaneous advice

  • Remember, your loyalty lies to the truth and the good of the company before all else. You are a fiduciary.
  • When you have to part ways with someone, do so sooner than later—it’s better for all of you.
  • Treat people well at all stages, this applies doubly when you are firing, downsizing or breaking ties. The Golden Rule is crucial to remember.

Hire Slow, Fire Fast

An investor at my last company told me once that “the moment you start wondering if you should terminate an employee, you’ve already waited too long”.

Granted, that’s a bit hyperbolic, but the underlying reasoning is sound. When I look back at people who I should have parted ways with long before we actually did, there were always months of rumination before we finally pulled the trigger and followed the steps above.

We tend to mistakenly hold off from terminating an employee or breaking ties with a contractor, because we “feel bad” or think it will hurt that individual. The truth is—similar to a poor match in a relationship—the splitting up sucks, but afterwards both parties are free to find a better suited partner (or job).

Hiring slowly, or better, following a detailed process that eliminates most biases and deeply vets the candidates potential—is a critical step one.

Step two is firing fast once you realize what the company needs and what the employee can, or will, give are two very different things. It’s painful, but can ultimately save your company.

As a founder, or executive, your loyalty lies to the truth, and the good of the company, before all else.


Firing Well is for More Than Just Employees

Sometimes you have to end relationships with contractors, with vendors or even investors. One of the biggest mistakes I ever made was not kicking to the curb an outsourced CFO firm that worked with us at Zirtual. They started off fine, but within six months had slid into complete incompetence. Instead of ripping the band-aid and finding someone new, ideally in-house, I spent another year hoping they’d get better… it is my biggest professional regret.

Refuse to tolerate subpar input from anyone, employee, contractor or external vendor. But do so with grace… be honest, but be kind.

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