Commentary
Firing People Is A Lousy Way To Build A Company
- by Matt Straz , February 11, 2013
There are some CEOs who believe that you should only hire “A” players and fire everyone else who doesn’t measure up. I am not one of them. Don’t misunderstand --I have fired people who cannot or will not do what is asked of them. But I don’t believe that automatically thinning the herd is a good technique for building a company. Here’s why:
Culture. When I was at MEC, the media agency, we built a digital practice up from almost nothing to 200 people over the course of six years. During that time I can only recall a couple of employees who were fired for non-performance. Was every person in the organization an “A” player? Of course not. Did every employee have the appropriate work experience before joining us? No. But our culture was one of helping each other to meet our company’s goals. As a result, we all got better as we went along.
Leadership. People cannot get better at what they do if they don’t have a clear idea of what is expected of them. For this reason I am wary of any leader who blames his or her “B” players for his company’s under-performance. Castigating the troops for your own failings as a leader is unfair and shortsighted.
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Process. If you hired a person who didn’t work out, then something went wrong with your hiring process. I still kick myself for some of the hiring mistakes I made when I was younger, but I can take some solace in the fact that I have made fewer of them lately
Coaching and appraisals. Unless you’re dealing with someone who is truly unmotivated or has personal problems, most employees want to get better. This is where regular check-ins and monthly or quarterly appraisals can help. If you’re having a performance issue with an employee, don’t wait for the employee’s next annual performance review to deal with it.
Responsibility. Some startup CEOs claim that the pressure to succeed is so intense that they can’t afford the time it takes to help their people get better. That’s nonsense. Great CEOs make everyone better, no matter what the obstacles are.
Stability. Nobody, not even “A” players, wants to work for a company that is unstable and constantly firing people.
Reward. Some CEOs with far more skin in the game than the rank-and file demand that everyone around them work as hard as they do… or else. That’s unrealistic and unfair.
Cost. Churning through people can take up a lot of resources in terms of time, severance pay, recruiting fees and even lawsuits. Just ask Time Inc., which recently took a $60 million charge after letting hundreds of people go.
Firing should be an option of last resort, not a strategy to build a company.
So important. Thanks for this critical reminder. Something we take very seriously at Collective Bias.
UGH! This story kills me every time I hear it. I had one boss who said "We need a team of Leaders, I don't want any followers. Otherwise how can I build the next round of management?" Several of us tried to explain to him that every team needs their "steady Eddie" types - continuity and constant good performance is critical to company growth. A team of leaders eventually devolves into a morass of aggressive behaviors, usually negatively focused.
Fantastic subject-matter for an article. I wish there would be more high-level operations management and human resources op-eds in Mediapost. Thanks Matt. @Rick Monihan: wise wise words. Many early stage businesses fail because of "all shepherds no sheep".
Thanks for the classic one-percenter comments. Worthy of Dilbert! Made my day! "People cannot get better at what they do if they don’t have a clear idea of what is expected of them", "If you hired a person who didn’t work out, then something went wrong with your hiring process.", "CEOs with far more skin in the game than the rank-and file".
Sometimes life happens between the hiring date and later. Otherwise, you can bring a tear to eyes. There are not enough of you. (Too many cooks spoil the broth goes way back, but many cannot cook.)
Great piece. There is something else to think of. I once worked with a CEO who believed that you had to do regular firings to "keep everyone else on their toes." Sadly, I am not joking. While he never told his board that was what he was doing, he would blame the people who he fired for things that he often did. He also blamed people who were fired two years a part for the same thing. Sadly the board were not willing to address the issue. They would resign rather than deal with the real issue.
Great post! We need to remember that "Fish rots from the head!" Plus, it's also true that there are many firms that welcome employee turnover (however they achieve it) as a way of keeping wages down. Want me to work as hard as you do? Try paying me as much as you pay yourself.
Thanks for all of the great feedback! As per Brad's suggestion, I'm going to focus on high-level operations management and HR themed columns over the next few weeks. As always, let me know what you think. Thanks, Matt