When you founded your company it was only you (and your co-founders), so out of necessity you performed every single function. As you started scaling, you started hiring yourself out of some of those roles, and you’ll continue to do that for years. It’s one of the fun parts of being the CEO; holding on to the things you like and handing off the things you don’t like or just aren’t good at, while you steadily increases your company’s velocity and overall output.
While hiring the right people is important, it’s a topic that’s already well-documented and gets plenty of lip service from us (see links at the bottom) and the rest start-up community already…
What’s discussed far less frequently is the importance of firing.
Terminating employees is not fun (nor should it ever be), but it can actually be more important for the success of your business than hiring. None of us will ever hire the right candidate every time, regardless of how robust your hiring process is, which means that to scale effectively you’ll have to fire underperforming employees.
Firing is extremely uncomfortable for most of us and runs against our natural instincts as human beings. It involves making difficult decisions that affect people's lives significantly, which creates guilt, stress, and doubt for ourselves. On the other hand, hiring is fun and upbeat! It aligns with our desires to nurture and grow, and therefore requires less self-reflection and mental fortitude to execute well.
1. Common drivers of inaction
We’ve all been there before when the first realization hits that we probably need to fire someone. And as quickly as that thought arrives so do the thoughts justifying you not taking action.
- I only got this far because of X person…
- We couldn’t possibly continue to do X if Y person leaves…
- Everyone is going to leave if X leaves…
- I don’t know anything about X…
- We’re going to fall so far behind on our OKRs if X…
And the list goes on…
It gets harder still when the individual’s performance isn’t even that bad, its just not good enough. And its even harder still when it comes to your executives, your early hires, and your cofounders.
2. Opportunity costs of inaction
The opportunity cost and collateral damage that comes from leaving a person in the wrong job compounds across your company every day, month, and year they remain in the role. And the more senior the position, the greater the damage it creates. On top of that, it’s also just a disservice to employee in question. Getting them out of a bad situation at your company gets them one step closer to a good situation in a new role at another company.
While your hesitation is real and legitimate, and can often be symptoms of impostor syndrome, try reframing the issue as you work through the difficult situation. Instead of dwelling only on the risks that come from termination, consider the downsides of not taking action:
- Culture - You have worked incredibly hard from your hiring process, to onboarding, to regular reinforcement of your values. Keeping around someone that is actively no upholding this is eroding the culture your team has worked so hard for.
- Talent Drain - How many people have left or will leave because X person is still there?
- Opportunity Cost - Are they bringing people up or pulling them down? Are you filling an A+ seat with a B- employee
- Financial Resources - Your existing capital is precious. If someone else could do the job more efficiently, you owe it to the company, your investors, and yourself to make sure you don’t burn unnecessary cash with a suboptimal hire.
For these reasons, firing is more important to focus on than hiring. Be thoughtful — measure twice and cut once — but act decisively and as quickly as possible, because you’re likely underestimating the opportunity cost of inaction.
References
Imposter syndrome and how to leverage it
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