What Should You Say When an Employee Quits?

Face to Face

Even when it's reduced to an anecdote, Michael Bloomberg's story has the potential to become a late-20th-century business legend. In 1981, Bloomberg was fired by the only employer he's ever had--Salomon Brothers, the elite investment bank where he'd thrived for 15 years despite (or perhaps because of) self-described "wiseass" tendencies. "Time for you to go," Bloomberg's boss told him in the wake of a merger-prompted management restructuring. Thankfully, the blow was cushioned by a check--a share of the spoils that all Salomon partners netted from the buyout. Bloomberg's cut happened to be $10 million. The night he walked out of Salomon for the last time, he bought his wife a sable jacket. (Job or no job, "we're still players," he wanted her to understand.) The next morning, settling down to work at his customary 7 a.m., he launched Bloomberg Inc. Over the ensuing years, Bloomberg built his eponymous company into a $1.3-billion, 4,000-employee provider of global news and financial and business information--in the process challenging and then besting one of the great franchises in business, Dow Jones & Co., on its own turf. After starting with dedicated interactive information terminals for financial-industry pros, Bloomberg's company expanded its offerings to include on-line services, radio and television broadcasting, and print publishing, all while--or maybe thanks to--nurturing a company culture bent on conquest. For Bloomberg, business is personal: "While you're reading this," he writes in his book, Bloomberg by Bloomberg (John Wiley & Sons, 1997), "we're thinking about how our competitors are plotting to take the food from our children's mouths."

Bloomberg, like a lot of founders, describes a business world consisting only of "us" and "them." But his conception includes a third class of characters, for whom he reserves a special circle of hell. Call them "those who used to be us"--the people who, by leaving Bloomberg's company to work elsewhere, have contravened his code of loyalty. He won't rehire them. He won't permit a good-bye party. He won't even--if he can help it--shake their hand. "Why would I?" he asks rhetorically. At a juncture in management-science history when the old social contract between employer and employee has been judged a museum piece, and when every worker is urged to think like a "corporation of one," Bloomberg is a throwback. Loyalty, he's convinced, is everything.

Is he right? Cause and effect can be hard to isolate, but the evidence certainly doesn't hurt his case. His company boasts a stratospheric growth rate, and its annual employee turnover is less than 10%. Plus, what honest business owner won't admit to feeling at least a little betrayed and threatened--OK, furious--when a key staffer departs? Wouldn't a culture of fanatical loyalty just plain feel better?

It does to Michael Bloomberg, whether anyone else thinks it's realistic or not. And his conviction should pose questions to companies of any size: Have we all given up on old notions of loyalty too soon? Is there a competitive advantage in making whatever sacrifices are necessary to cultivate loyalty--in both directions--between employer and employee? And are owners just kidding themselves if they think, from a purely personal perspective, that employee disloyalty shouldn't hurt?

Inc. executive editor Michael Hopkins spoke with Bloomberg in his New York City office.

Inc.: When somebody comes into your office and announces that he or she is leaving the company, what do you say?

Bloomberg: "OK."

Inc.: That's it? You say, "OK"?

Bloomberg: That's the end of the conversation. Then I sit there. If they want to stagger on for a couple of minutes and tell me why, that's fine. But I think "OK" is an appropriate answer. To say, "I understand"--that would be lying. I don't understand why anybody would want to leave. Say "Good luck"? Obviously, I would never do that. Tell them to go screw themselves? That doesn't make a lot of sense. It's over and done with. As for asking why, I don't much care.

Inc.: Why not? Why wouldn't that be valuable information for you?

Bloomberg: I've got enough valuable information. How much information can you process? It's just the view of one person out of 4,000. So that person doesn't like the color of that wall. What do I care? If I saw that I had a big problem--like a whole office leaving--then I would be interested. But one person? Nah. Just look him or her in the eye: "OK." There's nothing else to say.

Inc.: What if he or she reaches out to shake your hand?

Bloomberg: I make a point of not putting them or myself in an embarrassing position. If somebody stuck their hand out, I would not be so rude as to refuse to shake it, but I would prefer not to do it. I don't like hypocritical gestures. Every one of our employees expects--and has a right to expect--that I will take care of "us." You leave and you become "them."

Inc.: What if somebody--someone you highly value--comes to you a step or two before deciding to leave the company, and that employee says, "I'm dissatisfied."

Bloomberg: I would say, "You gotta do what you gotta do. In the end, you have a responsibility to yourself and your family. But...let me give you some ideas as to how you can fix where you are or find someplace else for yourself in the company." Even if I don't know who you are, the fact that you're working here says that your boss thinks you're good. If you're working here and your boss doesn't think you're good, I don't think your boss is any good. I want him to go --the boss--not you.

Inc.: How would you describe the loyalty that the company owes to employees?

Bloomberg: You have an obligation to do everything you can, no matter what it costs. They get into trouble, you pay their legal fees. They have a financial problem, you help them out. They have an emotional problem, you provide the best doctors and counseling. They have a physical problem, you get them into the best hospitals--and if your insurance plan doesn't cover it, you pay for it.