Firing someone sucks. When I joined Wild Attire Inc, my now partners Morgan and David asked “what is one thing you absolutely hated doing.” I remember this question vividly as I was staring into the eyes of 15 department heads. I hate firing people. I hate it only when it has to be done [justifiably] to great people.
So why would you let an employee go if they are good at what they do, fit well within your culture, are great communicators, etc.
1. When you’re downsizing or outsourcing (this is obvious).
Sometimes shit happens. Your investors pressure you. Sales dictate it. Workload does not justify salaries, etc. In mid 2013 Fab.com fired more than 50% of its staff right after a successful round of raising money. But Jason Goldberg knew that the survival of his company was dependent on making very tough decisions. He fired friends, great employees and even parted ways with a co-founder.
Take-away: sometimes tough decisions must be made for the greater good of your company.
2. Pivoting your business.
When a business pivots, usually the core and the peripheral team members are able to transition to the new business. In the early 90’s when Quepasa.com transformed itself from a website development company to a hispanic search engine, most of the developers, marketers etc. came along. As they morphed, new talent needed to come in to help the business grow. During a pivot, often major shifts happen to your product, customer base, etc. and sometimes the people you hired for one job may no longer be the right fit to do the new job.
Take-away: an insidious but inevitable byproduct of a business pivot is that some of your employees cannot make the transition. It is up to you to determine who can make the transition and to measure their new success. Just because Johnny was a great growth hacker with your SaaS it doesn’t mean that success will translate when your selling scarves.
3. They outgrow you.
This requires a little more explanation and may not be as straightforward. Often times, founders or employees [should] leave their companies. Why? Of course, there is no simple answer to this question. Individual circumstances change. There are a myriad of reasons but one thing that all these individuals have in common is that they need a new challenge. So, they leave – or should be encouraged to leave. Sometimes it’s because Jillian wants to start a family or Jordan wants to stay at home more with his family. Other times, it’s because your business does not have the same appeal as it once did. I call this “the new song” effect. When you hear a new song, you love it. You play it all the time. But when you’re tired of it, yes, you may like hearing it from time to time and it may even conjure gezellig feelings. But you are no longer as enamored as you once were.
4. They are no longer the right fit.
This one is a tough one as you may find a really great candidate or have someone already part of the team who may be amazing in terms of skills but they are not the right culture fit. The marketplace of A players for employers is a tough one. It’s difficult to attain and retain great talent these days. So naturally you’ll be inclined to hire someone even if they may not be the right fit within your culture. We once had just finished a nerf gun war and I was in the middle of an interview with a great candidate who had all the right skill sets. He was well informed, sharp, and definitely the kind of person who could come help get us to the next growth stage. I was courting him more than he was interviewing. At the time he had just started a new job, so I was curious why he wanted to leave. His reason stopped me dead in my tracks. He said on his first weeks someone threw a nerf football across the room. I immediatly realized that he would have a difficult time fitting in our culture. While we could have benefited greatly from his expertise, I also knew that he would have been the wrong fit for us.
Take-away: identify patterns with those individuals as early as they happen AND act on them. Your job as the the CEO, is to identify those individuals (or yourself) when they (you) display patterns of fatigue or disinterest. They may still love your company, they may still complete their projects but their heart is no longer into it.