Ep02 – How Do You Know When It’s Time To Fire Someone?

Tara: [00:00:00] Hey there. I’m Tara Landes. I’ve been working with small businesses for over 20 years, helping them implement the foundational business processes that get them to the next level. From DNA manufacturers to funeral homes. From web-based subscription services to third generation excavation contractors. Lots of business podcasts talk about the big companies. We’re digging into the secrets of the small companies. Want to make your business more fun, more profitable, and more self-reliant than ever before? Lots of people have done it. You can too, and you can start right now. This is the Small Business Foundations Podcast.

This episode was instigated by a conversation Gabe and I had had in The Lighthouse.

Gabriel Dhahan is my partner at Bellrock, and each month we host an ask-me-anything, drop in for all of the people in our leadership development and management training programs. It’s called The Lighthouse after our namesake, the Bellrock Lighthouse. The Bellrock Lighthouse, located off the Scottish Coast, is the world’s oldest sea washed lighthouse and considered one of the seven industrial wonders of the world.

It was built between 1807 and 1810 on Bell Rock in the North Sea, 11 miles east of the Sea of Firth. Standing 35 meters tall, its light is visible from 35 statute miles around. This remarkable structure has provided a constant, dependable lifesaving beacon for over 200 years and still sits on its original foundation.

In our Lighthouse chat, we were discussing many things, as we always do, when a common question arose. How do you know when it’s time to fire someone? Of course, there are times when it’s very clear. If they’re stealing from you, fire them. But most people are good people trying hard, and these questions rarely have binary answers.

We decided to refer to a series of questions Jim Collins put forth in his book, Beyond Entrepreneurship 2.0, as a framework for decision-making. Afterward, we discussed the applicability of these questions. Have a listen.

Tara: [00:02:15] In The Lighthouse this week, we were talking about- what were we talking about?

Gabriel: [00:02:21] Setting expectations and delegation and also how to deal with employees who just don’t do what you ask them to do.

Tara: [00:02:28] So, The Lighthouse is our forum that we get together with anybody who’s in management training and it’s more of an ask me anything. People just come with their questions, and we can talk about whatever’s on their minds. One of the things that was on their minds this time was how do you know when to let someone go.

What do you think? How do you know when to let someone go?

Gabriel: [00:02:47] Yes. It’s hard to know sometimes, but we often say that it’s when you, as a manager, feel like you’ve exhausted all the tools on your tool belt. And part of the challenge with that is oftentimes managers aren’t equipped with all those tools. And so, there’s this constant questioning of like, did I do enough?

Once they’re armed with the tools around expectation setting, one-on-ones, giving feedback, et cetera, then there’s that piece that comes into play, which is okay, I’ve done all of these things and it’s still not working. So, am I ready to make a move here?

Tara: [00:03:21] What you said is what I often say: even if I think the manager isn’t equipped with all of the tools, because who is really? So even in that case, it’s just, when you’ve done everything you can do.

So, if you’ve tried your best, if you feel like you’ve given it a real effort and…. You know, it’s interesting, because there are these performance improvement plans that people get put on. So they get told, you know, first you have your verbal warning and then you have your written warning and there’s this orientation I think of some managers that, “oh, I’m doing that so I don’t get sued later”, but really that’s not the purpose behind a performance improvement plan. The performance improvement plan is an attempt to allow the person to improve their performance and to make sure that the company is following their responsibility, to give them the feedback, to be able to do the best job they can, because most people are good people trying hard.

Gabriel: [00:04:17] Well that’s right. So, we’re trying to set people up for success and the performance improvement plan has to be based on the belief that the person has potential to be better or do better in their role and that they’re still a fit for the role. And so, there’s kind of two pieces there. It’s like, yes, there may be a skills improvement that needs to happen, but it’s also a question of, are they a fit? And so even if they improve on the skills, if they’re really not a fit for the organization, that’s not going to solve anything.

Tara: [00:04:49] Yeah. And when people put in that performance improvement plan, just as a way to cover themselves legally, they’ve waited way too long because somewhere in that relationship, that person was a great hire. Somewhere in that relationship, they thought it was going to work out. And so, to go from “this is going to be amazing” to “how am I going to make sure I don’t get sued?” That’s a long journey.

Gabriel: [00:05:16] It’s also possible that it wasn’t a great hire and not enough feedback and conversations happened early on, so then you get past the probationary period, you still haven’t made a move and now you’re in this difficult situation of trying to improve someone’s performance who really shouldn’t have been there in the first place. And then it just gets dry.

Tara: [00:05:39] Totally true. But I will say that emotionally, even if they did the wrong things in hiring, at the moment, when they hired them, they thought they were the right person.

It may be very quickly that they realized it wasn’t the right person. Okay. If your question is, should I let this person go? One question to that is, have you done everything you can or that you know how to do? And that definitely should include the performance improvement plan. So that’s one thing. What other questions should people be asking themselves to try and figure out if it’s time to let someone go?

Gabriel: [00:06:12] There are several questions that came from Beyond Entrepreneurship 2.0 by Jim Collins. He goes through a series of questions to ask yourself when you’re faced with the situation.

And I’d actually like to start with the last question that’s asked, which is, how would you feel if the person quit? And the suggestion in the book is if you’re secretly relieved, then you might have already concluded that they are the wrong person on the bus. And I think that’s a relevant question to start with, because if you go down this other path of using certain tools, or maybe we could just move them over here, or maybe if they did X, Y, or Z, they would fit. But if underneath you’d be secretly relieved that they just left? You might be trying to push something uphill that’s not really worth it.

Tara: [00:07:00] It’s so true. I think often people get stuck in this “well, but they’re trained. They may not be great, but they’re trained. And so, I’ll just keep them around”. It’s really easy to let someone go when they’re terrible. Because they’re terrible. There’s no question around that. It’s these middling sort of like ‘on the bubble’ people that when we’re facilitating strategic planning and sometimes these conversations can go on for years, “What do we do with this person?” It’s this middle ground. And so, I agree that that’s a great question, because if you would be secretly relieved that they quit, then, it’s probably time to be moving in that direction.

Gabriel: [00:07:39] Right. And there are reasons why we hesitate on making a move when we feel that. But what we’ve seen so often is once that move is made, the leaders and managers look back and they say, “oh, it wasn’t that bad. It wasn’t that bad to have made that move”. And actually, we figured it out fairly quickly afterwards, “oh, what a relief”. And then sometimes they even find all these other things that they weren’t aware of that suddenly come to the surface. But this is all assuming that that answer is really clear and I think that dilemma that, um, that people are faced with is “I’m not so sure”.

Tara: [00:08:15] I want to add on to your previous point. It’s not just that the managers and leaders feel relief when they finally make the choice. Usually the person who was let go or quit, also feels that relief. Because most people don’t want to do a middling job. They want to do something that they’re great at. And so, holding them back in a job that they’re just not successful in, it’s so much better to just release them to the world and allow them to figure out what their purpose is and go and do that thing. When, you know, they might have the risk tolerance profile such that they’ll just stay forever at something that they don’t really like and aren’t really great at. Holding them back that way in some ways isn’t that fair either.

Gabriel: [00:08:59] That’s right. And so, we do a disservice to them, and we do a disservice to our company by keeping them around. And if we actually just shifted our conversation to, “hey, this is starting to feel like it’s not the right fit and maybe we should explore that. What would it look like if we were to part ways and how could we support you find that right fit?” Then it becomes less, I’d say, tense as a conversation and more collaborative. But anyways, that’s kind of going down that path.

So, how do you know? The first question that’s asked then from that book is: “are you beginning to lose other people by keeping this person in this seat?”

Tara: [00:09:38] Yeah. And that’s a huge one because people know. Like, your staff are watching your behavior and your behavior indicates what you value. So, if you accept middling performance, then you don’t value great performance, and that can be really dangerous. It’s sort of the enemy of the great is the good.

Gabriel: [00:10:02] Yeah. And if you set expectations and someone violates them and they get away with that violation, then why would anybody else follow those expectations?

Tara: [00:10:13] It often shows up with a manager saying, “oh well, they mean well,” or “try to ignore that about them because, well, that’s just them, they’re just kind of quirky that way”. To me, that’s a bit of a signal of a lack of fit. If you have to be making excuses for somebody on their behalf… Diversity is great. Diversity makes everything better in a lot of ways, but it has to be recognized as valuable and if you’re making excuses for somebody’s behavior, that’s different, that’s not valuable.

Gabriel: [00:10:43] Exactly. The second question was, do you have a values problem here, a will problem or a skills problem? Like actually sorting out what, what are we talking about? Is it just that the person isn’t performing because they haven’t been well-trained? Is it that they’re just not trying hard enough? Or is it that they’re just not fitting with the organizational culture?

Tara: [00:11:05] I feel like that’s the question. That’s actually the first question. I know that they listed it second, but actually that’s the first step, because how could you do a performance improvement plan without having zeroed in on the answer to that?

Gabriel: [00:11:17] True.

Tara: [00:11:18] So if it’s a values problem, we’re having a very different conversation than if it’s a skills problem and they just need to get some training or some experience or something like that.

Gabriel: [00:11:30] I guess, potentially, the reason why that other question was first is because regardless of what the problem is, if other people are leaving as a result of that person, that’s pretty serious.

Tara: [00:11:39] That’s true. But the second question just should have happened before.

Gabriel: [00:11:47] People are leaving far earlier on, absolutely. So then also what’s the person’s relationship to the window and the mirror?

I thought this was interesting. Because at first read, the way that it was described was when things go well, the right people point out the window, giving credit to factors other than themselves. They shine a light on other people who contributed to the success and take little credit. And when things go awry, they don’t blame circumstances or other people for setbacks and failures, they point in the mirror and say, I am responsible. They ask what they could have done better or what they missed, and they grow from that.

Tara: [00:12:22] I really agree with that. It aligns with my own personal values, but I can also imagine certain kinds of organizations where that’s not the case at all.

Gabriel: [00:12:35] Yeah. And I also think that that’s more appropriate for a leadership or management position as opposed to frontline. Because as leaders and managers, it is our responsibility to take responsibility for what happens and really shine the light on ourselves and say, you know, where did we mess up? Where did we go wrong? And if things go well, to be able to highlight the success of our team members and support them. So, I also, wasn’t a huge fan of that as a catch all question.

Tara: [00:13:04] I think it depends on the organization and the values of that organization. But I would say in our own organization, that is the case.

Gabriel: [00:13:10] And it’s still a good approach, I think, to take, to think about it organizationally. Pumping up the success of the team when things go well and looking inward when things go poorly, I think that’s just a good orientation to have.

Tara: [00:13:29] Yeah. And in a service industry, in particular, I’ve noticed this a lot. The one excuse that we don’t allow at Bellrock is that “it was their fault.” It’s the client’s fault? Because at the end of the day, it is literally never the client’s fault, because if it was going to go that badly, we should have known in the first place. They shouldn’t have been our client. And we’ve done this work with hundreds of companies with thousands of managers. They’ve done it maybe once, maybe twice. Probably never. So, the idea that it could somehow be their fault – that they knew what they didn’t know, that was on us to teach them that. From that perspective, I’m really aligned with the orientation of it. I just don’t think it’s true of everywhere.

Gabriel: [00:14:15] Agreed.

Tara: [00:14:16] Okay, so, what was the next one?

Gabriel: [00:14:18] Does the person see work as a job or as a responsibility?

Again, I think similar to the comments I made, it’s a little bit more appropriate in leadership and management positions, but this is the idea that the right people understand that they don’t have “jobs”, they have responsibilities. They grasp the difference between their task list and their true responsibilities.

So, for example, a personal trainer doesn’t merely have the job of preparing workouts but embraces responsibility for building his or her trainees into better performing athletes, let’s say. It’s almost like are people just checking off the boxes? Or are they seeing the bigger picture?

Tara: [00:14:57] Yeah, that’s totally what I was thinking. Do they think they’re responsible for the means to the end or the end results? And managers really, and leaders, get into a real conundrum when they tell people, “do it this way and get these results” because you can either control the means to the ends, you know, and say, this is how I want it done, or you can say, these are the results that I want, but it’s not fair to do both.

You remove the accountability from the person if you’re doing both. And so, I would say that, of course we want ideal people in any role. We want them to really take ownership for the end result, but there are a lot of circumstances with the way managers behave that can get in the way of that inclination that someone might or might not have.

So that’s a tricky one, for sure, and it’s important for managers to think about that.

Gabriel: [00:15:50] So the next one was, has your confidence in the person gone up or down in the past year? And the point here is that the trajectory counts. And so, the example is when someone says to you, “okay, I’ve got it”. Do your worries subside? Or do you increasingly feel the need to follow up?

Tara: [00:16:10] Oh, my gosh. That’s so true. And that’s that, you know, you hire somebody and you leave them to their own devices for a couple of weeks, and then you go back and you’re like, “what is this? This isn’t what I wanted at all”. Well, that’s on you because you didn’t explain it well enough obviously, and then we start checking in on them every week and then we’d start checking them every day, and then we check in on them every hour and then we’re like, “wow, they can’t get anything right”. But it’s not just them. So, there’s definitely something wrong with that management practice. But I totally agree, it’s that trajectory. And I guess that’s why you get to that point of fake performance improvement planning with them to protect against legal repercussions. Right?

Gabriel: [00:16:49] Exactly.

Tara: [00:16:51] Yeah. I like that one.

Gabriel: [00:16:52] So then the last one: do you have a bus problem or a seat problem? So, do you have the right person, but in the wrong seat? Or has the bus just fundamentally changed and therefore the demands of the seat outstrip the capabilities of the person in it.

Tara: [00:17:08] Oh, we see that so much in small business.

Your first hire is a Swiss Army Knife, and they’re amazing because they can do a little bit of everything, pretty well, and that’s all you need. Someone who can just stick their fingers in all those holes in the dike. Amazing. But as the company grows and as you can afford to hire more people into the organization, increasingly, you want specialists in roles. On one hand, you don’t have those specialists, but further people really enjoy doing a little bit of everything. So, you get these people who actually, the thing they value most in their job in that company, is that they get to wander around and do all of these different things, but it’s not what the business requires anymore.

And sometimes the people have trouble sort of catching up with that reality. And it can be very awkward because it can be the most important person who is loyal through thick and thin and we just appreciated them so much and they might even be a family member, right? But then here we are. We aren’t that little business anymore. We’ve grown, we’ve changed. We’ve morphed. The technology has changed. The competitive market is different and suddenly someone who was so valuable…. It can be heartbreaking watching that.

Gabriel: [00:18:29] And this is why growth is so challenging and why, when organizations are doing strategic planning, they really need to think about what growth means. Not just for their staff, but for themselves. Because it often means that being in a leadership role changes and I don’t think all small business leaders are necessarily thinking about what being two times or three times or ten times their size is actually going to mean for all of their people, including themselves.

Tara: [00:18:59] And you see that a lot. You see the people who got it to a certain place, even the leaders to protect their investment, from an outside perspective, they really should be stepping out. Not always. And sometimes definitely not. But sometimes they’ve, it’s just outstripped their skills, even though their values are perfectly aligned with the organization, they just don’t know what they don’t know.

Gabriel: [00:19:22] And that speaks to the need for bringing on possibly new people with the experience and knowledge and skills that are needed, upskilling through leadership development and management training, and just constantly developing people in the organization so that you are prepared for that growth. So, you might not need it today, but if you’re planning to be two times the size in a couple of years, then you need to start preparing for that.

Tara: [00:19:48] It’s actually a really good segue into the podcast we did with Jonathan Bennett of Laridae, where he was talking about advisory boards and how advisory boards can be helpful.

Cool. Well, thanks for the chat today, Gabe.

Gabriel: [00:19:58] You’re welcome. It was fun.

Tara: [00:20:03] It was fun. Bye.

Tara: [00:20:10] That’s what it sounds like when Gabe and I develop a framework. In summary, the answer to the question, “how do you know when to fire someone?”

It’s time when you’ve done everything you know how to do, and it still isn’t working.

If you’re wondering if you’ve done everything, step one would be to identify if it’s a values problem, a will problem, or a skills problem, and put the individual on a performance improvement plan.

You should also consider if you’d actually be relieved if the person quit. And if you’re beginning to lose other people by keeping them, look at their performance trajectory. Are things getting better or worse? And consider if the company has just outgrown their skills. Maybe the issue isn’t with the person, but with the role they’re in. I once had a client who rated his sales manager as a two out of 10 in terms of performance.

And when I perfunctorily asked, “So would you hire him again?” He enthusiastically said, “yes, absolutely”. I thought maybe he didn’t understand the scale- two is not good. But he understood just fine. The sales manager wasn’t just a sales manager. He was also the President’s brother-in-law and a very close friend.

That’s the thing about applying big business concepts to small businesses. There are a lot of emotional roadblocks at play. Firing someone is a very difficult decision and can leave the manager or the employee feeling like a failure. It’s really important to follow a supportive process that lifts all parties up.

It’s hard work, but don’t let that stop you. If it feels like too much, don’t worry, we’ve got you. You can learn this stuff and get it right the first time.

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