Why it hurts to fire people
Founding your own business is easy. Growing the business is possible. Restructuring your company because it struggles can be painful, but will lead you to new energy after you made it.
I see many people in my surroundings embarking on their freelance careers, which is something that I respect a lot, because this also means that they are taking many risks. Even being ill for a week or two can be harmful, as they have no backup.
My idea of entrepreneurship never included freelancing or being a one man show. I freelanced for about three years when I was an adolescent, but I have always been more inspired by people who founded their businesses with the idea of really running a company, including all the responsibilities, risks, ups and downs.
About Founding
So that’s what I did, and I founded my company in 2006 together with a partner. Right from the beginning my intention was not to stay a two-person company on the market but rather to show our peers that we could do better than what they had been doing for the last 20 years.
This worked out pretty well, if I do say so myself. The »dinosaurs« of the local advertising and design agency scene identified us fairly quickly as potential competitors, because we inspired many people, including their clients, with our work and our philosophy to break down the silos between classical and digital communication. We saw that building a company that creates experiences for the hole media universe is much more fun. :-)
About Growth
In 2006 we started as a two-person company. In 2008 there were four of us, and we continued to double our company size about every other year until 2012. At that point we doubled within about six months by getting new partners and some of their employees on board. That happened because one thing’s for sure: new partners mean new clients, and new clients mean more turnover. — As you will see this did not happen.
About Culture
With every book I read I became more inspired by company culture and realized how important this would be during a period of growth. So everyone on our management board started to think about culture and what that culture could mean for the company. Many great ideas came up. Many different ideas suggested by many different types of people.
»Culture eats strategy for breakfast.« — Peter Drucker
About Family
Over the years, the company started to feel and work like a family. All the employees from the growth period were still part of the company and were working on awesome — but sometimes unaffordable — projects for both individual clients and large corporates. We had been working with most of these individual clients since our founding. The family worked pretty well, everyone took care of each other and tried not to hurt anybody. What a comfortable, inclusive feeling.
About Changes
After settling down in front of a warm and cozy fireplace, what could be worse than facing that blizzard known as “the real world” outside your door?
In other words: our numbers were not that great compared to our growth in size, the many different ideas of the partners created a cultural Neverland and, in combination with the family constellation, it became quite clear that we could either die in our cozy and familiar surroundings or step outside to make an unpleasant but necessary change.
About Differences
Growing a company is a great feeling. People congratulate you on your success, while others let you feel their pure envy and resentment (which also makes you proud).
On the other hand, growing a company means taking responsibility for everything that is connected to it: partners, employees, an office and its surroundings, infrastructure, suppliers and great clients who count on you as a partner. This is the big difference between stand-alone entrepreneurs and entrepreneurs with connected responsibilities.
About Pain
By the end of 2013 a big change was needed to get the company back on track again. Part of the strategy was to scale down the company, which might be one of the most unpleasant and most misunderstood aspects of leadership — especially when your company’s culture is based on the term “family”.
Scaling down mostly involves dismissing people. Firing people.
Looking back, I never thought about how I would feel after firing someone I really liked. After kicking someone out of the family circle.
I spent a lot of energy and plenty of sleepless nights creating a proper story to tell the first employee at her dismissal. I worked on that story for two days. I thought that the story was so solid and reasonable that she would surely understand the decision. All those clichés:
“I really like you, but…,” “shrinking turnover,” “fast growth,” “so sorry,” “you are a great person,” “it’s nothing personal”.
But no, she did not understand. She cried. At that moment my heart stopped beating. I was lost. I was hurt. But at the same time I stopped feeling anything at all, because I knew that this would not be my last dismissal.
Sometimes you need to take two steps back
in order to move three steps forward.
About Friendship
When I started to change the company, it was the beginning of something fresh and great, but at the same time I knew that I would need to fire some more people I liked, some I was even friends with. Friendships were destroyed and former friends were gone after hearing my firing story. People cannot understand your decision, even when you try to make everything transparent for the whole team. In the end it is something personal, and what I do means harm to them.
About Time
All this happened about a three years ago. It took a year before I learned that feeling grateful and feeling awful are not always far from each other, that building a great team is harder work than cultivating a cozy atmosphere for “family members” and that making uncomfortable decisions with all their inherent risks is part of good leadership.
On Track
Now our company is back on track. With over 30 employees, a new partner, awesome clients, an increasingly quality-driven team and more output.
But I realized that I never want to start feeling cozy again.
Thank you for reading,
Philipp
