What Should You Say When an Employee Quits?

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Inc.: Is there a point at which that obligation ends?

Bloomberg: Well, the logical point is where it inhibits your ability to help others in the company. If I bankrupt the company, I hurt everybody, so you have to draw the line before that point--but I'm not sure I'd draw it very much before that. As long as you're profitable, no, there's certainly no limit.

Inc.: How do you think the loyalty demonstrated by the company to employees here changes the way people work?

Bloomberg: I think they really think that this is their company. I remember when I worked at Salomon Brothers, and for years and years afterward when I saw the Salomon Brothers name on a tombstone [announcing Salomon's involvement in a deal] I got a little rush. That was my name. I really believed that it was my name. These 4,000 people think that Bloomberg is their name. So they work harder. They're more flexible. They're longer-term and firmwide thinkers. They help others in the organization.

Inc.: I understand that you don't rehire people.

Bloomberg: Right.

Inc.: You wouldn't consider rehiring even if somebody quit for a good reason? Say a person quit because he or she got an opportunity elsewhere that couldn't be matched inside. Or say somebody approaches you before quitting to let you know he's been offered an opportunity to do something that Bloomberg can't give him a shot at right now.

Bloomberg: I'd tell him, "You know this company offers opportunity, but we can't satisfy everybody's needs immediately all the time. Sometimes you have to be a little patient. But you've got to do what you've got to do. Just let me know when you make a decision."

Inc.: So if this person comes back, a potentially better employee, two years later?

Bloomberg: That person ain't going to get away with it. Can't do that. Two years later! We wouldn't even remember who he or she was.

Inc.: But what if this is somebody who's exactly what you need, exactly the sort of person you'd have recruited?

Bloomberg: You can't have a set of policies that you believe in and that you think are good for the organization, and then constantly make exceptions. You can't have it both ways. Take your pick.

Inc.: Imagine you're talking to the owner of a 10-employee business. He or she has been persuaded by listening to you that valuing loyalty highly--and practicing it unbendingly--is going to create a culture that in the long run will be enormously beneficial to the company. But now some key people have left--people who have special relationships with the company's only major customer, say--and this CEO is really scared and wants to re-recruit those people, win them back. However, he or she knows that doing so would break the rule. What would you say to that CEO?

Bloomberg: I'd say, "Why'd you let that happen?" That manager should have been thinking, "OK, we've got 10 people working in our company; what happens if Sally or John or Jane gets hit by a truck?" That truck could be driven by a stranger, or it could be driven by management, but what do you do if that person doesn't show up tomorrow morning? When I go over the reviews in my company, I always ask managers, "Who's your replacement? If you get hit by a truck, who should I put in?" If they tell me they don't have a replacement, I tell them, "You'd better get one, and you'd better get one in the next three months. Because I will not leave that office exposed to having you die at your convenience. I'd rather drive the truck and kill you now; at least that way I can be in control." A good manager always has a replacement ready, and the best managers always have somebody who's better than they are.

Inc.: But this is a very small business we're talking about, in which it's tough enough to muster the resources necessary to compensate the star. What if it's not possible to maintain his or her potential replacement on staff?

Bloomberg: Then know who you'd bring in from outside. Just because you don't have the would-be replacement on payroll doesn't mean you can stop asking the question, What if Joe leaves? It's one of the basics. OK, so he's got a unique relationship with your biggest customer. Well, why'd you let that happen? At Bloomberg, our TV broadcasts have different on-air presenters every week because I don't want to depend on one personality. How could I look everybody here in the eye and say, "Well, I'm sorry, guys, you can't get a bonus this year because our television star left, and I was stupid enough to bet the company on that person." These people would lynch me. And they should. No manager should put a business in that kind of jeopardy.

Inc.: Let me back up a minute. Is it your experience that employees these days generally don't expect to be loyal to a company the way they might have been back when you started at Salomon?

Bloomberg: My observation as an outsider is that the turnover on Wall Street is much higher than it was and that the family feeling is gone from that industry, but I don't know if I could agree that loyalty is devalued in general. People who come here generally turn out to be loyal. Now it's true that we've done better every year; I don't know how loyal people would be if we didn't. I don't ever want to find that out. My job is to make this company constantly go for new products and grow.

Inc.: If you were talking to somebody just starting to grow a company, how high on the list of attributes or philosophical commitments would you put the idea of loyalty between a company and its employees?

Bloomberg: Number two would be so far down that it would be hard to find.

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