“See that property over there? Steve Jobs owns it. That’s going to stay in his family for a long time.”
I was being interviewed by a Venture Capitalist at his home in Woodside. The interview was going well, and it looked like he was going to give his approval for hiring me to the other board members.
Then, he asked me, “Have you ever fired anyone?”
“No,” I answered truthfully.
“Bullshit!” He responded.
But, it was true.
I was 37 years old. I had never fired anyone even though I was managing a large number of people at the time.
The company I worked at was kind of like the law firm in John Grisham’s book, The Firm. No one ever left.
Now, if you’re thinking that working at this company was a picnic, well I can tell you it wasn’t. The CEO was tough as nails and expectations were sky-high.
The talent level at this company was sky-high too. Almost everyone was an A player.
Rule Number One: Hire great people and you wont have to fire anyone.
Back to my interview…
I got the job.
The team I inherited was not a group of A players. Instead I quickly realized I was surrounded by a group of B players and C players.
I knew I was going to have to let many of these people go. This leads to…
Rule Number Two: Handle yourself with class and grace when you have to fire someone.
Here’s a story of how not to fire someone:
I was running a division of a company. Every Friday the company had an operations meeting that included senior management.
The meeting always started at 1PM sharp with “Bob,” the CEO, usually starting the meeting by giving a speech. This day was no different.
However, the subject of the speech seemed to be me. Bob started listing off all the things that he didn’t like about me.
Then, at 1:15PM sharp, Carlos, the HR VP, asked me to go with him. “Take your stuff,” he said to me.
I knew right then and there I was being fired, and the twenty other people in the boardroom knew I was being fired too.
I’ll never forget the classless way Bob handled my termination. I remind myself every day to never to do the same thing to someone else.
My motto was and is: Handle yourself with class and grace.
Rule Number Three: Provide a generous severance package, or (said another way) don’t be petty.
Back to my story of being fired…
I was due a quarterly bonus for completing my goals for the previous quarter. I had completed all of them and deserved 100% of my bonus.
I called Carlos after I was fired asking where my bonus check was? Carlos told me that Bob felt, “I didn’t deserve the bonus.” It became clear to me they weren’t going to pay me the bonus.
The bonus was for a significant amount of money, so I was going to have to fight for what was rightfully mine. The company stalled for weeks.
Finally, I threatened legal action if they didn’t pay me 100% of my bonus.
The company paid me 100% of my bonus.
The experience left a bitter taste in my mouth obviously. The point is to treat people the way you want to be treated even when you have to let them go.
Remember, you are messing with someone’s life and livelihood when you have to take action. So, be generous, don’t be petty.
Also, you can rest assured that word will get around if you are being petty with someone you just fired. That only makes things worse.
Rule Number Four: Improvement plans rarely work, but sometimes you have to do them.
Some companies love putting problem employees on so-called “improvement plans.” The idea is you tell a problem employee, “Here are the five things you need to fix, or we’re going to have to terminate you.”
I’ve had to put several employees on improvement plans, and I’ve never seen an employee survive an improvement plan.
Why do companies, even in an at-will employment state like California, put employees on improvement plans when they never work? The answer is the employer wants to avoid being sued.
Make no mistake, you’re just likely postponing the inevitable because you’re still likely going to have to fire the person on the improvement plan.
Rule Number Five: You, the CEO, will be the last one to realize you have to let someone go.
Every time I have had to let someone go, I’ve had someone tell me, “What took you so long? We (the other employees) knew he wasn’t going to cut it.”
There is a delicate balance you have to strike when you’re running a company. Fire someone too quickly and people are going to think you overreacted. Then they are going to worry about their own jobs.
But if you fire someone too slowly, then people are going to think you are accepting mediocrity. They will lose motivation and performance will suffer. Worse yet, these great employees may leave.
Take all these rules together and you have…
The Five Signs You Have to Fire Someone
There are legendary stories here in the Silicon Valley about Steve Jobs firing people on the spot (or in elevators), essentially violating all of rules of how to fire someone.
However, according to the book, Becoming Steve Jobs, by Brent Schlender and Rick Tetzeli, Jobs found it more difficult to fire people after he had children:
“When I look at people when this happens (being fired), I also think of them as being 5 years old, kind of like I look at my kids. And I think that that could be me coming home to tell my wife and kids that I just got laid off. Or that it could be one of my kids in 20 years. I never took it so personally before.” Steve Jobs
I hope this story about Steve Jobs is true. And, I hope you take it personally too when you have to let someone go.