How to manage difficult decisions on hiring and firing

A few years into the building of blinkx, a very senior person on my team burned out right before my eyes. This person, let’s call him Dave, was (and is) a legendary contributor and one of blinkx’s best secret weapons. One night after work he sent me an email: “Urgent: can we meet early tomorrow morning? Not in the office—the Ferry Building at 8:30?”

As soon as I saw him, dishevelled and looking like he had not seen sunlight in weeks, I knew something was wrong. He didn’t waste time. “I’ve got to go,” he said. Just like that, with zero notice, he quit. On the walk back to the office all I could think about was how to pick up the pieces. 

It may be trite but it’s also true that the most important resource for a start up is its people. Moments of hiring and firing can be crucial inflection points in a company’s life. Founding and building blinkx from zero to £59m in revenue involved lots of hiring and team building but I quickly learned that knowing when to let people go is an equally critical skill. In fact, one day, you may even have to fire yourself.

There are as many situations as there are individuals but there are five personas you should learn to recognise and manage: The Burnout; The Amazing Starter; The Toxic Throwback; The Unfortunate Layoff and The Talented Jerk Everyone Tells You to Fire.

The burnout

Characteristics:

One of the most committed members of your team. He comes up with outrageous, excellent ideas and has the commitment and energy to drive them through to completion. This intensity comes at a cost: an inevitable and massive blow out.

How to spot: 

Dark circles under the eyes. Wears the same clothes two days in a row. Red Bull-and-pizza diet. Occasional emotional outburst, especially if his commitment is questioned.

How to handle: 

Don’t let it get so bad that he quits. Force him to take some time off and find ways to mitigate his work and stress levels.

Burnouts are often your most productive employees. They are drawn to the excitement of launching new businesses and work is like a drug to them. You need to be careful they don’t OD.

When Dave came back to blinkx we analysed what went wrong and noticed he had two key issue. He couldn’t say no to new projects and he always went deep in the weeds on every detail. We worked together to prevent another meltdown. Now Dave has a strict limit on how many things he can work on at once. Now he can obsess as much as necessary without pushing himself too far. 

The amazing starter

Characteristics: 

Team player. Passionate. Gifted individual contributor but not yet ready to lead large teams.

How to spot: 

Projects she’s leading are falling behind schedule and her strategy is unclear. Her team complains of not having enough guidance and she always looks on edge.

How to handle: 

Consider pulling her from management and offer a senior-level individual contributor title.

The Amazing Starter built a business from zero to $10m in revenue and (rightly) sees that as success. However you are aiming the business for 100 times that size and you need to get there fast. Often The Starter knows there is a problem but she is a go-getter and doesn’t want to give up. Instead, she will ask for just a little more time. 

It is possible that in five-to-ten years she will be ready for the challenge but you don’t have that luxury. When you lead a start-up you are building a rocket ship while it’s in flight. You do not have time. You need to discard incrementalism in favour of big, bold leaps in scale. Bring in a more natural leader and find a new role for The Starter where her talents can shine and she can learn from a mentor. There is a risk The Starter will leave for another company but that is a risk you have to take.

The unfortunate layoff

Characteristics: 

Great worker building a soon-to-die product.

How to spot: 

You keep forgetting he’s there.

How to handle: 

Let him down easy and offer a generous exit package.

When you are running a start-up you need to look to the future and take Big Bets. Sometimes that means choosing to kill a product or service that is doing just fine in order to put your resources toward something that could accelerate the company’s growth. The longer you keep this redundant group in play, the longer it will take you to build the Big Bet and the greater the chances that your competition will get there first. 

The best thing you can do for those employees is to let them know it’s not personal and has nothing to do with them, but that the reality of the market has changed. Offer them a generous exit package and assistance with finding a new job. Remember to treat these people with dignity and grace—they could’ve been future heroes of the company and the reason they are not is rarely their fault.

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