I need to share something with you that entrepreneurs hate hearing and it involves the "f-word.” So, here it goes: If your company is in a competitive industry or in a rapidly growing field, YOU WILL HAVE TO FIRE SOMEONE within the first five years of your business. There, I said it. But the reason won't be because the person you need to fire is incompetent, and it won't be because they don't fit well within your company's culture – if either of those were the reasons, firing someone would be a heck of a lot easier.
Swift and decisive action alone does not create a strong and lasting connection to you either personally or professionally.
The truth is that you will have to fire someone because of one of two reasons that all entrepreneurs face in the first few years of running a business: Either you're having cash flow problems and can't raise enough capital to cover all your operating expenses or, more likely, your business has evolved quickly and a skill set you thought was absolutely critical for your business turns out to be a nice-to-have skill that won't help your business in the foreseeable future.
Under these conditions, how do you let someone go – someone who has been part of your organization from its early days? And, how do you do it in a way that protects your brand? Because, quite frankly, how you let someone go will dramatically determine whether your team loses faith in you and your vision.
To address this task, which is by far an entrepreneur's least favourite, it is vitally important to keep a few things in mind:
Your team members will talk about how you fire someone. They'll talk about it within your company and with members of their extended networks. That means that your company's culture is shaped by the way you handle someone leaving. Furthermore, a pool of potential future team members will know something about your reputation even before they consider working with you.
Chances are the person you are letting go has established personal and professional ties with at least one member of your team. They'll talk amongst themselves and they'll talk about how they were let go with their networks. So, there are no "secrets" that can be kept under wraps.
Given the evolution of your company and your industry, there's a very good chance that you will run into your former team member again. And, they'll have been in networking mode – building and connecting with your clients/customers, suppliers, advisors, prospects, etc.
Your team will need to engage with clients/customers who had a relationship with your former team member.
To help you address these realities, here are some guidelines and tips to help you turn the unpleasant task of firing one of your team members into a positive experience that reaffirms the power of your vision and your company's unique culture.
Show your humanity. There is an adage that entrepreneurs aspire to "hire slow" and "fire fast.” But, in following this guideline, owners emphasize making a speedy decision and overlook the importance of demonstrating their empathy for their former and current team members. Swift and decisive action alone does not create a strong and lasting connection to you either personally or professionally. What does reinforce a commitment to you, and by extension to your vision, is your ability to show that you make difficult decisions – i.e. those that involve human emotions of sadness, disappointment, and frustration – for the benefit of your team and therefore the company.
That means when you talk about the reasons for letting someone go, make sure that you speak about these emotions. Also acknowledge your team members' emotions about the firing decision. These will likely include confusion, anger, and/or disbelief. Address these initially in a group debrief meeting. Make sure that your team members know that they can discuss how they feel about the firing decision with you one-on-one.
Own the decision and its impact. Drawing from input from your most trusted advisors and team members, you alone will make the decision to fire someone. You must own it. You should share with your team the reasons behind the decision, letting it be known that you gathered data and validated your assumptions. However, if you want your culture to be one of strong accountability, you will need to accept responsibility for the ramifications of the decision – both good and not-so-good.
This will likely mean that your daily activities will increase to cover tasks your former team member owned. It will also mean that you will need to address how some of your clients/customers will be informed or transitioned to working with other members of your team. Finally, you will also need to take a lead in redistributing tasks previously assigned to the departing team member.
Acknowledge contributions. The most savvy entrepreneurs know that if and when the conditions are right, they may need to rehire someone they've fired. But this is made difficult if when you do fire someone you have discounted or ignored the contributions they've made to your company.
As a result, when you speak to your team about the reasons for letting someone go, in addition to answering the questions "Why was this decision made?," "How was this decision made?," "What impact will this have on the team and the company?" and "Why was the decision made now?," be forthright about the positive things that former team member brought to the company.
Combine these activities along with key guidelines for bringing new team members into your growing company and you set a strong foundation for keeping your team inspired, engaged, and aligned with your vision.