Start-up Entrepreneurs' Blog

The Worst Task an Entrepreneur Has To Do In A Start-Up

April 21, 2011

Firing people has got to be one of the worst and most stressful tasks in the business world. One of the more stressful situations, It’s tough on everyone, not just the person being fired and the person doing the firing, but also the entire staff, and more so in a small start-up environment than in a big company.  I have fired 15 employees in my career, on both start-ups and big companies, and I remember the name of each and every person.

Most of the people I fired were not doing their jobs – sometimes they were incompetent, sometimes they just couldn’t perform at the level needed by the business, sometimes they were the wrong person in  the position, and only once did I have to fire someone for lost his temper and destroyed company property in a fit of rage.

What have I learned  from firing people?

In a start-up, get it done quickly. In a large company, you can put the person on the proverbial “measured mile”, but in a start-up you need to cut the cord as quickly as possible. You need to conserve cash and they are burning through it with no tangible work being produced. In fact if you don’t move them out quickly, you’re just paying for them to look for another job. A start-up doesn’t have the cash to wait for the employee to take the hint and hopefully leave on their own, nor do they have the big company option of transferring the person somewhere else.

It’s hard as a manager, you become less productive in your role. You spend days or maybe weeks knowing you are going to fire the person. You think about it a lot during that time. How are you going to say it? What’s the best time? How will they take it? I’ve had CEO have people standing by just in case things got ugly.

If you know you are firing someone then it’s difficult to keep the search for a replacement quiet, particularly in small company. I’ve even had the soon-to-be-fired employee drop hints of retaliation.  I had one person who kept mentioning to me all the law suits they had filed  in recent years against other companies, which I figured was just a way of them telling me if I fired them, they were going to make my life difficult.  And afterwards, I’ve been stalked, I’ve gotten phone calls and I’ve gotten letters.

In a start-up, be prepared for the rest of the staff to become unsettled. Since this may be the lone person in their job function, the other people don’t really get why this person got fired. After all, they seemed nice enough and competent enough while chit chatting in the break room. The others will start to think that they will be next. What do others think of their performance? It requires a lot of stroking afterwards to calm their fears.  This can easily take 2 weeks of constant closed door conversations.

Firing someone in a start-up with a small number of people is much worse because who’s going to do their work. It’s not like a company of thousands of people; you can spread their work around to other people for a while. If you fire your lone marketing person then the task limps forward or gets put on hold, and then you become the desperate employer.  Find a consultant or outside vendor, the relationship is much simpler than employer-employee and easier to end.

This is a clique, but birds of the feather flock together. Don’t hire someone unless they’re recommended by one of your best employees or colleagues. I’ve made this mistake and I’ll never make it again. Any inkling of a personnel headache, one word misspoken during the interview, and I won’t hire the person – no matter what.

It’s not something many entrepreneurs think about when they start a company.  It is going to happen. Just yesterday I ran into two non-technical founders, who said they had to go through several software programmers before they found the right one.  I’ve seen start-ups churn through sales people for the first few years, trying to find the right ones.  

Firing people is just like a nasty divorce.

Filed under: Team Building

Tags: emtrepreneur's dread, firing employees, poor performing emplyees