Values-based Firing

The other day, I was meeting with the CEO at a company I advise. Our goal for the meeting was to review his executive team to identify potential gaps.

The CEO pulled up the list of his C-level executives and started walking me through it. I stopped him abruptly.

“What about Kent?” I asked.

“Ah, Kent,” he said, with just the slightest hesitation. “We had to let Kent go.”

“But, but, …” I stammered. “You just hired him three months ago! He was your prized hire, the one whose hiring you trumpeted in an email to the board and advisors. The Data Science leader who was going to transform the product and customer experience.”

“Yes, and he was actually doing a pretty good job,” the CEO said. “He helped drive an important launch and quickly made a couple of impressive hires”.

“Hang on, are you telling me it was not a performance issue?” I asked, surprised.

“No, it wasn’t; he was actually one of our highest performing executives,” the CEO said.

“Did he do something illegal or something that violated company policies?”

“No, nothing like that.”

“So then, why? Why would you fire him, setting us back several quarters?”

“We had to let him go because his behavior was contrary to our values,” the CEO said. “One of our most cherished values is collaboration; being open to ideas and input from every person in the company. Kent just didn’t get it. He came from a command-and-control environment, and was dismissive of anyone who was not an executive or a peer of his. He didn’t listen to people or take them seriously, even his own team members. People would go to him with ideas, and would come out feeling completely stonewalled and disrespected. We got several complaints about this, and I gave him tough feedback twice, once after each month. Unfortunately, his behavior didn’t change as a result of the feedback, so I had to fire him after month 3.”

“Wow.”

After my initial shock at the news, I felt one overwhelming emotion — pride.

Pride in the CEO for making the difficult call to fire a star performer. Pride in the company for standing up for their values.

I congratulated the CEO on Doing The Right Thing, and we moved on to other topics.

I took away three lessons from this episode. First, companies should seriously consider making Values-based Firing a real thing. Second, Values-based Hiring is not sufficient. Third and most important, in order for Values-based Hiring and Firing to work, leaders must use every employee touchpoint to reinforce values.

Lesson 1: Formalize Values-based Firing as a new type of involuntary termination.

There are three types of involuntary terminations (aka “firings”) at companies. The first is performance-based. The second is policy-based; in other words, termination for conduct that violates the company’s policies (eg: harassment, insider trading, etc). Both these categories are fairly straightforward, in that they are easy to measure and act upon.

The third type of firing has been the hardest for managers and HR teams to execute on — or even justify — because it’s been based on things like “culture fit” which are squishy to define and pin down. My proposal: create a new category of involuntary terminations called Values-based Firings. In other words, make it explicit that behaviors that are contrary to a company’s values will be grounds for termination. This will force each company to be extremely clear and crisp about their values, and about the behaviors that exemplify or violate these values.

Importantly, employees will also have a clear rubric about why certain behaviors are unacceptable, as well as a way to evaluate their own (and their colleagues’) behaviors and actions vis-a-vis this rubric.

Lesson 2: Values-based Hiring is not sufficient.

Over the past decade, a “culture” interview has started popping up as part of many (technology) companies’ interview panels. This interview is typically done by a long tenured employee and intended to evaluate “culture fit”. This is an example of Values-based Hiring, which companies increasingly use to ensure that candidates’ values align well with the company’s values.

The challenge with Values-based Hiring is that it uses a Q&A interview format to assess something that is truly observable only through real-life work interactions. Put another way, it’s not too hard to game Values-based Hiring / culture interviews.

It’s clear that Values-based Hiring is not enough. A commitment to Values-based Firing is equally — if not more — important, given the challenge in observability and authenticity with values-based hiring. What this means is that leaders and managers need to closely monitor behaviors of new hires on their teams and make the hard call to terminate them (after appropriate constructive feedback, of course) if their behaviors are in direct opposition to the company’s key values.

Lesson 3: Reinforce values at every key employee touchpoint.

In order for Values-based Hiring and Firing to be effectively implemented, leaders must evaluate how to incorporate and reinforce Values (and associated behaviors) into every employee touchpoint. A few key touchpoints:

  • New hire onboarding: Include a session (delivered by a C-level exec) on the company’s values. For each value, make it come to life with real examples of employees who demonstrated that value at work.
  • All-hands: Recognize employees who exemplify each value (and clearly articulate WHY and HOW they demonstrated said value). It’s ok to be cheesy. Trophies, awards, etc — all these work!
  • P2P kudos: Many companies have a Slack channel or other way for employees to give kudos to their coworkers. Ensure that every kudo is given for a specific action or behavior that exemplifies a company value. This trains every employee to start thinking about actions and behaviors in terms of values.
  • 1:1 / real-time feedback: Train managers to deliver Values-based Feedback in 1:1s or ideally in real-time (right after a meeting, for example). “Hey, I saw you didn’t allow our teammate in Bangalore to get a word in sideways. This goes against our value of
  • Reviews and promotion packets: Employee reviews focus almost exclusively on performance on product or business metrics. Consider adding a mandatory “Values” section to the performance review template; in this section, the manager must articulate how the employee “performs” vis-a-vis each company value, and which values are areas for development for them. To go the extra step, include this section in promotion packets too. It’s more work, but absolutely worth it — turns out people pay extra-close attention to things that affect their reviews and promotions.

Values are the foundational building block of company culture. Values-based Firing, though ominous-sounding, is critical to help reinforce the values and behaviors that make your organization unique even as you scale.

Drop me a note with examples of how your company processes support and reinforce values, and I’ll add them as a postscript to this post.

Postscript

Startup CEO: “Love your new post. We had to part ways with (name retracted), our prized hire, who was doing >50% of work every week because of value mismatch. Was one of my hardest decisions ever but been the best one for us.”

Gokul Rajaram

Written by

curious optimist. quizbowl coach. dad and husband. caviar lead @ square. previously facebook and google.

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