One of the unavoidable realities of building a startup is having to fire people.
In a normal business you can often sweep bad performers under the rug and not deal with them. When you have millions or billions of dollars of revenue you can suffer a few bad performers or bad apples. You can miss a quarter’s target and not cull the inefficiencies. I’m not saying you should, but you could.
But in startups this equals death.
Death because just three extra non-performing employees in a company of 15 can either accelerate cash out date or can dramatically lower your productivity.
I’ve spoken about this before and my mantra, “Hire Fast, Fire Fast.”
When I first started my career I came across a term for this that has always stuck in my head and serves as a useful reminder of this mantra.
We called it “PURE.”
Previously. Undetected. Recruiting. Error.
My premise with “hire fast, fire fast” is that some companies over-analyze potential recruits and therefore chew up valuable months with functions unfilled. Most (whether they hire quickly or slowly) are very slow to deal with problems once they have them.
I have sat through scores of board meetings in the past year, and in at least 25 percent of them the topic of a senior employee we hired that hasn’t worked out comes up. Almost always the CEO is defending why he or she has to hold on to that employee for an extra six months until they can fix a,b and c before letting them go.
I have never (literally not once) heard a leader later tell me, “I’m glad we waited.” Universally after the shock of letting somebody go and the reverberation in the company is felt a sense of relief and well-being ensues. Teams are organisms and they detect bad cells even more quickly than leadership does. Failing to act undermines confidence.
Yes, PURE employees have allies so it’s never simple. But when you make a mistake you need to own it and fix it ASAP.
This came up in the reverse last week when I spoke with a friend who has an asinine recruiting policy. He told me that everybody who joins must first have a “temporary contractor period” almost like one is on probation before she joins.
I say asinine because that has the likelihood of turning off some potentially great prospective employees and there’s zero reason for the probationary period. In the US you have the right to terminate almost any employee at will (subject to your not giving them a contract to the contrary and of course you should always consult a lawyer before implementing a firing or layoff).
Thus everybody is implicitly on probation anyways so making it public does you no good and potentially limits some people who may join. I have come across several companies who have this probationary period over my years and I always try to talk them out of it.
Anyway, to the point of this article if you make a mistake in recruiting -- if somebody is PURE -- deal with it quickly and surgically. The longer he persists in your organization the more the badness metastasizes and the larger the treatment later.
This article was originally published on Mark Suster's blog, Both Sides of the Table.