Firing

Firing sucks but it happens. There comes a time where you are going to have to let a team member go. It could be for a variety of reasons: role fit, stage fit, culture fit, etc or all of the above.

I used to always say that a bad hire is 10x their salary and 100x if they’re in a leadership role. This is not a hard-and-fast rule but concept that will show you the negative impact of a bad hire. When you factor in opportunity cost, poor decisions, and bad features, the cost definitely adds up.

If your gut is telling you that it’s not working out, it’s probably not working out. Typically, it’s in everyone’s best interests to cut ties and move on. For the team member, they can be successful somewhere else that’s a better fit. For the company, you can have someone else in the role that will drive bigger impact.

My rule of thumb for firing:

  • do it with respect and dignity

  • shouldn’t be a surprise (immediate feedback has been given and acknowledged)

  • exception to this rule is if they did something immoral, unethical, or illegal

How to fire:

  • Be brief and very specific

  • Map out the entire day (fire employee at 9am, talk to team at 10am, etc).

  • When firing someone, script out everything you have to say, and stick to the script

  • Reiterate that “it’s not a negotiation because the decision has been made”

  • Should be a short meeting. The longer the conversation, the more confused the team member will be on whether s/he is fired

  • Fire people in the morning to give your team the entire context and communication during the day

  • Be direct and straightforward with the team but don’t reveal the reasons behind the decision

    “As some of you may already know, Diane is no longer part of the organization. I can’t go into details because that’s confidential information and I want to ensure Diane’s privacy. If you have suggestions about how to minimize the impact of Diane’s absence, let me know.” - HBR

Needless to say, there is a cost to firing someone. You have to re-hire and re-train someone for the role, which can push your timeline back from a few months to an year (or more).

It’s always best to have a thorough and rigorous interview process. It’s much easier to cut people in that process, instead of firing someone.

CEO Group

I got a couple of questions on how to start your own CEO group so including the format below.

A couple of years ago, I met the CEO of a public company. We shared some ideas and he mentioned that he meets with a CEO group regularly. For him, it was an opportunity for them to network and help each other out w/ whatever challenges they have, etc.

I decided to create my own CEO group with the following ideas:

  • 6 total CEOs (I didn’t want it to be too big)

  • CEOs within similar stage (e.g. growth who have recently raised a Series B with 50+ employees) but across different industries

  • Group had to mesh well as we needed to be transparent with each other, vent, and get feedback.

  • Everything we discuss in these meetings will be confidential

Format 

  • Every meeting is moderated by a different CEO. The role of the Moderator is to 1) organize the location and 2) facilitate conversation to not get derailed. 

  • 3 Hour-Meeting (one-Hour for Group Discussion followed by 20-minutes for each CEO to discuss personal challenge)

  • The group discussion were usually topics that were applicable to everyone (e.g. fundraising, building a management team, leadership, etc) while the personal challenges were applicable to your startup (e.g. strategy, sales, etc)

  • Goal: For each CEO to get a different perspective on how to solve different problems / company challenges 

Commitment

  • 4 x Year (every 3 months)

  • Dates / Times blocked for the year (similar to Board Meetings) 

  • Cost: $0 


It was one of the most important meetings that I attended throughout the year. It was great to hear that other CEOs were facing similar challenges. We met outside of the designated meetings and these are other founders and entrepreneurs that I can count on for a lifetime.

Hiring A Players

After interviewing hundreds, if not thousands of candidates for various roles, I put together a list of red and green flags to look out for in interviews.

This doesn’t mean that you shouldn’t hire candidates that surface these attributes but it should be a signal to “proceed with caution,” especially if there are multiple red flags.

As a general rule of thumb, I tend to look for patterns as they are the best predictor of future performance.

"Bet on people changing when they have proven they can change."

Here are a list of competencies from Topgrading that highlight which are easier to change.

Red Flags

  • Being extremely vague - on anything from previous accomplishments to domain knowledge, which means they might have been part of the team, but not critical in the success.

  • Job hopping - candidates who jump from job to job every 6 months, often blaming the company, culture, founder, etc for failure (making excuses).

  • Overly negative - making destructive comments about previous colleagues, managers and founders. These people are toxic for your culture. Imagine what they’ll say about you!

Green Flags

The inverse also holds true. If you interview someone that is the opposite of all these red flags, you should hire them.

  • “Wow” accomplishment - Is there something in their past that shows off some of the softer skills around grit, resilience, and persistence? My favorite hires have been an Eagle scout, semi-professional tennis player and self-published bestselling author.

  • Upward progression - Are they getting promoted with more and more responsibility? If so, that means they take initiative, can overcome challenges and their path is upwards.

  • Glowing references - Always, always, always do references. The best signals are references that respond to you quickly and are extremely excited about the candidate.

It’s important to keep in mind that “hire amazing people” doesn’t mean “only hire people you are 100% sure are amazing.” It’s very hard to become 100% convinced you’re in the presence of greatness in an interview, and missing out on someone great is bad, so you must take some risks!


Articles

This Is How You Identify A-Players (In About 10 Minutes) During An Interview by Mitchell Harper

Managing Your Own Psychology

“Psychology is the most under-appreciated, yet most important part of building a company.”

The most difficult skill as a founder and/or CEO is managing your own psychology. Ben Horowitz (from a16z) wrote a great article highlighting the struggles of managing his own psychology.

Organizational design, process design, metrics, hiring and firing were all relatively straightforward skills to master compared to keeping my mind in check. Over the years, I’ve spoken to hundreds of CEOs all with the same experience. Nonetheless, very few people talk about it, and I have never read anything on the topic. It’s like the fight club of management: The first rule of the CEO psychological meltdown is don’t talk about the psychological meltdown.

Running an early-stage will be a wild roller coaster ride. There will be ups and downs every single day. A competitor will launch a competing product that is a direct copy of your product. Or, a critical hire decides to join a different startup. If you let these instances bring you down, you will be in for a very difficult journey.

One founder I chatted with tries to be like a duck. Above water, it looks like everything is going smoothly but beneath the water you are paddling like crazy.

That pretty much sums up my experience running Skillshare for eight years. There were a lot of ups-and-downs but I had to keep an even-keel. Even at the peaks when things were going really well, I knew to not get too excited.

Here are some tips on managing your own psychology:

  1. Founder/CEO Network: Every few months, I used to meet with others where we discuss our issues, challenges, and get advice/feedback from others. It was refreshing to see that other companies were struggling with the same issues.

  2. Work/Life Balance: Create a routine and schedule that you stick with every week. This can be as simple as working out every morning, taking Saturdays off completely from working, or having a weekly date night with your significant other. It’s important to make sure you have a good work/life balance so you don’t burn out.

  3. Celebrate Wins: While it’s great to reach huge milestones, don’t underestimate all of the incremental, small wins you achieve as a team, every single day.

  4. Learning Moments: Don’t be too hard on yourself when you make mistakes. Everything is a learning experience and if you treat it as such, you’ll always be improving and becoming a better leader.

  5. Connect with the Vision/Mission: If you’re feeling a lull or stuck in a low point and need some extra motivation, re-connect with the original vision and mission of why you started the company. Make it more ambitious!


    Articles

    What’s The Most Difficult CEO Skill? Managing Your Own Psychology.

    How to deal with “shit” as a CEO — strategies for managing your psychology



CEO Responsibilities

The major job of the CEO is to lead the company and team to win in the market. Nothing else matters.

In order to do that, the CEO has to do the following successfully:

  1. sets the vision and strategy for the company (and communicates it to everyone)

  2. builds a world-class team and culture, and

  3. raises capital.

As the CEO, there are hundreds of things that you can do every day but you’ll find the most leverage by focusing on the first three responsibilities. It’s easy to get distracted with meeting requests, attending conferences, etc.

All of my priorities laddered up to those three milestones. I was ruthless with my calendar and delegated everything to focus on the most important areas. Because if those three things didn’t happen, nothing else mattered.

As an exercise, take a look at your calendar and see how you’re spending your time. Are they laddering up the most important priorities?


Articles

My Ideal Work Week as a Startup CEO by Michael Karnjanaprakorn

What a CEO does by Fred Wilson

What’s the Second Job of a Startup CEO? by Ali Rowghani

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