Don’t Be Afraid to Fire a Good Employee

One of the most difficult decisions in business can be to fire a good guy who performs well. Usually when we think of firing employees, we think about the incompetent or lazy workers. We envision people who are disrespectful, make mistakes, or alienate co-workers and clients.

The reality is, however, that sometimes people simply don’t fit their roles anymore – for a variety of reasons – and therefore must go. They may be great to be around and even do their jobs solidly, but they may not be the right person for the role anymore. Here are some reasons why:

When the Company Outgrows the Employee

A colleague of mine likes to say that employees need to grow at the same pace as the company. He’s right. Particularly in a startup environment it is vital for individuals to step up their performance and improve their skills at the same rate as the organization as a whole. Often that simply doesn’t happen.

Sometimes a growing company will sugarcoat a firing by “layering” an employee (bringing in a new person above them in the hierarchy) or by “promoting” the employee (what often is really happening when a founding CEO becomes Chairman suddenly). Call it what you will, the bottom line is the person has been fired from their current position because the company outgrew them.

When the Employee Can’t Seal the Deal

This topic came to mind for me because of the disastrous loss suffered last night by the University of New Hampshire men’s hockey team in the first round of the NCAA tournament. UNH came in as a #1 seed in their bracket and fell to a Notre Dame team that had managed to win just 4 of their last 13 games. Worse, they scored 7 goals after struggling to score throughout the past several months.

UNH has now lost in the first round in 4 of the last 5 years under respected Coach Dick Umile. They have never won a national championship, despite frequently being a Top 10 team in the country. Like coaches (and other employees) before him, it is time for Umile to go. Not because he isn’t a good coach, but because he can’t seal the deal by winning a championship. Sometimes when that happens regularly, it is time for new blood. There is a history of this in sports, including Mike Hargrove being fired as manager of the Cleveland Indians after 5 consecutive division titles (but no World Series victories).

In more traditional startup terms, think about the executive or salesperson who brings lots of deals to the table, but never gets a signed agreement. Whether or not it appears to be the employee’s fault, sometimes new blood is the best solution.

When the Company Changes Direction

If your startup changes direction, you may no longer have the right people in the right seats on the bus. Consider the case of a company that launched with a B2B focus, only to realize somewhere along the way that the technology might be better suited to a consumer application. The same people who may be great at enterprise skills may not be prepared to handle the new environment.

Of course, there are many reasons that a company may change direction. It could target new verticals, change the focus of a product, or invent some new technology. In any case, companies must not be afraid to make a change when the direction dictates it.

When the Employee Has Reached His Potential

It may seem odd to think that once an employee has reached his full potential he might need to move on. But the reality is that an employee who has no room to grow will often atrophy instead. This can be one of the trickiest situations to identify and act upon, but it can also be one of the most important decisions a startup will make.

Personal growth is incredibly important to the well-being of the individual and the company. When you have little left to learn, most individuals will fail to achieve the great things a startup needs from everyone. Worse, most solid performers will become bored in this state. The solution is to adjust the role to leave room for learning, or find the right time for the individual to move on to a new challenge elsewhere.

A Final Word

Knowing when to let a good employee go will help the company rise to the next level. You need not fire a good employee in the Donald Trump “You’re Fired!” manner. Though often difficult, especially in the startup world the decision can become a critical differentiator and impact future success.

(Hopefully UNH administrators will reach the same conclusion with Dick Umile. Though I admire and respect him as a coach, it is time for change in that hockey program.)