Maybe Kevin O'Leary's next business should be coaching couples through breakups.
The hard-nosed Shark Tank star and investor, who has famously told entrepreneurs "to be willing to fire your mother," on Tuesday offered some corollary advice: When you know it's just not going to work out, rip the Band-Aid off, fast.
"The moment you realize that person isn't right for the job is the time to take them out of it," O'Leary, the co-founder and chairman of O'Leary Funds, said at the iCONIC: Seattle conference, co-hosted by Inc. and CNBC.
"The key to ending a relationship is to explain to the person why you're doing it," he added.
That doesn't mean such conversations are fun: "It's the hardest thing to do," O'Leary acknowledged, before offering a characteristically blunt addendum: "If you don't have the balls to make those cuts ... you're the wrong leader."
That reflects O'Leary's fundamental belief that founders who prioritize anything above their company's profits are doomed to fail, as my colleague Bill Saporito chronicled in Inc.'s March issue. "Running a business is hard," O'Leary said then. "When you are the leader of a business, your responsibility is to the success of the whole organization, not any one individual, including yourself."
Hence his "it's not me, it's you" attitude toward underperforming employees, despite any emotional or personal ties. In fact, O'Leary told the Seattle audience, he tries to avoid bringing those complications into the workplace entirely: "Very often nepotism is what kills the golden goose," he said. "Often your best manager is not" a family member.
O'Leary is very hands-on with his professional breakup coaching; he does the firing at any company where he's a majority owner. And he has a fairly simple "three strikes" policy, he explained on stage, brandishing his work phone.
"Probably 10,000 people have this number," he said, arguing that any company founder should be willing to take calls and complaints from customers and major shareholders.
"This [phone] does not ring as much as my family one does--but when it does, it's a big deal," he said. "When this rings three times, it's time to terminate someone."