Firing Well
A few times a year, I’m sitting with a founder talking about their company, and I realize that the core problem they are dealing with is that they don’t have the right people working on it.
Why does that happen so often?
One big reason is that I invest in early stage startups. And at early stage, the people who jump on board are usually generalists, usually more notable for their enthusiasm than their skill set.
Early folks also often have little management experience, so they don’t really know how to hire or manage people. And the people they hire probably don’t either, so that, as time goes on, more people who don’t know what they are doing are on board.
At high growth rates, even if you knew what you were doing a year ago, there’s a really good chance you don’t know what you are doing today. Given a few hundred percent annual growth rate, most people who weren’t vastly overqualified for the job you originally hired them for, are now overwhelmed..
The final reason, and the point of this post, is that founders almost never have a lot of experience firing people. And they don’t like firing people: it’s painful, they want people to like them, they consider it their own failure. That’s exactly where I was in my first company, NetGravity. We had grown incredibly quickly and were a public company doing $40m in revenue less than 4 years later. Along the way, all of the problems I listed above happened to me in spades, and I still didn’t like to fire.
Luckily, I had a great Human Resources person, Jill Wear Parrott, who has helped me ever since. Her opinion, still correct, in my experience, is that, by the time a junior manager starts to think about firing someone, it’s already obvious to everyone else on the team that the person should go. And it’s almost never going to get better. Of course, you should try to work things out anyway. But the point of this post is, when it is time to fire someone, what are the things that you can do to fire well.
First, give them as much warning/salary as you can. I know this goes totally contrary to the way people have told you to fire before. You’ve been told to sit down with the person, walk them out the door, so they don’t badmouth you or go on a rampage. But that shows a complete lack of trust in them, and, for most employees, is totally unwarranted. If you tell someone that you don’t think things are working out and give them a reasonable time horizon to find their next job, that flexibility relieves a huge amount of the anxiety they feel. I give people three months. That probably feels excessive, and I could probably shave a month off and get the same effect. But my point is that, in this situation, my goal is for the employee to feel respected, to feel safe, to have time to make a good decision on where to work next, and for the rest of our employees to see that I value them. So yes, it’s excessive, but that’s kind of the point.
The second important thing to do is to be incredibly frank about why you don’t think things worked out. If your reason is ‘you just suck at your job,’ you aren’t getting to the root cause. Usually in high-growth startups, the nature of the job changed substantially from the time you originally hired this person. Be frank — most people appreciate your honesty. The point is not to prove it to them, though, so don’t get into a long debate. But state your reasoning clearly.
The third important thing to do is to remember the good things the person has done for the company. There is absolutely nothing wrong with having a long list of these things written down; it will show them you really thought about it. This is core to the idea of respect, which, after safety, is top of mind for the employee in these situations.
The fourth important thing to do is to let them set their own terms for leaving the company. Of course, if you are giving them three months, you may think, ‘Hey, I want to get some more work out of them.’ No you don’t. There is a reason you are firing them, and once they know they are leaving, their work will not improve. But letting them set timing and the way they let people know about the change creates agency for the employee that really helps them feel some control in a tough situation.
The fifth important thing to do is to announce the departure publicly to the appropriate people. In a small company, this might be in a daily stand-up. In a little larger group, it might be an email to the thirty employees. Slightly bigger, let the managers know and have them communicate to their teams. Again, Jill was key to my understanding here. Everyone will be thinking ‘What does this mean for me?’ So you want to honor and respect that employee and indicate to the rest of the group if this is a structural or personnel decision. You don’t need to spell out the reasons in the same detail as the conversation, but some indication eradicates a lot of speculation.
The sixth key thing to do is to agree to take reference calls/emails for that person. There is almost no one you hire that’s bad at everything. Let them know that you are likely to emphasize these strengths and won’t hold back on the areas they have struggled, but would be happy to talk to people. Most likely, employees won’t have you do this unless they are pretty desperate, but it again shows that you care and want to see them find something great.
The seventh key thing to do is always partner with someone from HR when you do the termination. I know it feels terrible to have someone come in a room and ‘boom’ the HR person is there, but they are far more qualified than you are to run the process well and fairly after you have communicated the information from points 1–3. Good luck; be brave. Sometimes, firing is better for everyone.
