Necessary Losses

CEO's account of the emotional issues associated with her company's growth and the inevitable personnel changes.

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Why is it that, when a company grows, someone is always left behind?

A few months ago I had to let a longtime loyal employee go. She had been with my company almost from the beginning. She had started out as a receptionist, straight out of college, and worked her way up to account executive and vice-president. But something had happened along the way: the company outgrew her. We reached a point at which we needed people with a sophistication about our business that she just didn't have. She didn't have it, ironically, because she had never worked for any agency except ours. That might seem unfair, but it had become a real problem, and I could see it would only get worse.

So we had lunch one day, and I laid it out to her. I said: "Look, I could keep you on and keep you happy, and in five years you'd be disappointed that you didn't get the opportunities you wanted. You would say, 'Why didn't you tell me then, when you had that first inkling of the problem?' " I looked her in the eye and said, "This is then."

I tried to be sensitive and compassionate. It didn't help. She became emotional, and I felt so coldhearted. I'd worked myself up to being very rational about the decision. I knew I had to do what was right for the company. I also believed it was right for her, and I know she would agree with me today. At the time, however, none of that made the situation easier for either of us.

After 11 years of running my own company, I still find those conversations difficult, although not quite as difficult as they once were. Little by little, I've come to accept and, for the most part, enjoy the responsibilities of my job. But I have to admit there is a part of me that has never become fully reconciled to the losses involved in growing a business. I'm talking about the personal losses -- the relationships built and broken along the way.

In the early days of my company I took every departure personally, no matter what the circumstances. I remember the first time an employee told me she was leaving. She had been the first person I had hired. I had known her from a previous job, and we were friends. She said she wanted to start her own business. I was devastated. I felt completely and overwhelmingly alone.

Even more than the loneliness, I had a sense of personal failure. I felt as though I'd done something wrong -- that I wasn't doing the best job possible. During that period we lost several people because we couldn't pay them enough money. Each time I thought, If I were smarter, I could figure this out. If I had a better handle on the situation, if I knew more about motivating people, I could help them sell more and keep them with us. It was a sense that returned whenever someone left. I couldn't shake the feeling that I could have made a difference if only I knew the answers.

And believe me, I was acutely aware of what I didn't know back then. When a start-up takes off, it's like being in a vortex, with things whirling past you at an amazing rate. You try to grab information as it goes by, to absorb as much as you can. There's no time to think. The business is constantly changing. It's all you can do to keep up.

Of course, the business is changing because it's growing. That's both satisfying and scary. I was astonished to see how fast a company can outstrip the people who work for it. As the owner, you see employees who aren't cutting the mustard, and you think, What if I'm not cutting it? Who's going to tell me? I guess it's the banker, the accountant, the numbers on the income statement. But still you wonder, How long can I stay on top of this business?

To complicate matters, your role is changing. In the beginning, a business is kind of an adventure, and everyone is having fun. You think, If it works, it works, and if it doesn't, to hell with it. You want the good feelings, the friendship and camaraderie, the moral support. But at a certain point, I realized the friendship was becoming secondary. What I needed was performance. I was making more and more commitments -- to suppliers and to clients. It was my job to make sure other people were doing their jobs. I had to be the boss.

The challenge was to be a good boss. I felt an obligation, for example, to bring people along with education, but small companies have no resources for training. It just doesn't happen. As a result, you outgrow employees at a rapid clip. We'd get people in, barely get them acclimated to the company, and find we were stepping over them. I soon learned I couldn't hire for today. I had to anticipate what a job was going to be a year down the pike -- which was difficult because by then we'd be an entirely different company.

I tried to figure out why some people were able to keep up the pace, to stay and grow and work shoulder to shoulder, while others fell out of step. Someone we'd hired as a typist had begun to do the bookkeeping, probably because she kept a neat checkbook. Three years later she was heading up our accounting department, and it was time to computerize, which was completely beyond her. So I had to tell her, "There are excellent skills you have, but there are other skills you don't have, and those are the ones we need now." Those are hard conversations to have, because of the memories involved. You remember the sign you put up in the elevator: "Typing help needed." You remember how she looked when she answered the ad. You remember the good times. Yes, you feel proud that the company is growing, but there is also a bad feeling, as if someone were being ripped out of the family. The other family members look around and have the same self-doubts as you do.

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