Mike Andes argues that founders and operators should "fire fast" when employees are underperforming. He explains the costs of delaying terminations—lost productivity, payroll waste, cultural damage—and uses an amputation/cancer metaphor to justify removing harmful employees to preserve organizational health. Andes also cites Reed Hastings' concept of increasing "talent density" and notes hiring better people or cutting lowest performers both raise average team quality; he closes with a promotional CTA for bluecollarsummit.com.
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I think most of us, if we talk to entrepreneurs or business people that have been in business for a long time, they would say the same thing. And it's like fire fast. However, some of us are emotional and that includes myself. Even though logically I know they should be fired. I'm not great at firing people. And that's why for each of my businesses, I have an operator that is over operations that will fire people because I'm not great at it. I know when to fire people, but actually doing it, not great. And the difference in productivity and efficiency of your organization comes into play when you know you should fire someone. And the amount of space that that goes by before you actually pull the trigger. And for most of us, it's way too long. The amount of damage that is done in that period of time, the amount of wasted time for that team member, the payroll that you pay them, your time and energy and mental space that's put towards it, and then the rest of your team, they get slowed down from having this cancer inside the organization is insane. And if you think about your job as a founder, a CEO, an owner, whatever, making sure that the entire organism is healthy, the entire, the entire organization is healthy, there's going to be times when a certain part of the organism gets cancerous and you have to cut it out. And that is not fun. That is not exciting. It's not fun to go underneath a scalpel and get cut off your finger, cut off your hand, cut off your arm. Why do we amputate people's arms like that? Seems crazy. The reason we do it is because we want to save the rest of the organization. We want to save the rest of the organism. And there's going to be people inside of your organization that you will have to cut out. And it'll be very painful and you might even miss them somewhat because it's an appendage, it's a leg, it's a finger, it's a toe, something you have to cut off in order to save the entire organism. And your job as the founder is to ensure the health and success of the entire organism, the entire organization. Not making sure that one person that is cancerous to the company is having bad performance is losing money for the company. That person needs to be cut of the organization and your responsibility to make sure that happens. There's not one single time that I have ever fired someone or any of my operators have fired someone that I regretted it down the road. Now at the first, it's painful and it hurts and I hate firing and this is why I don't do it most of the time. But not one single time has any of us ever regretted firing somebody. In fact, usually when you fire someone over the next week or two, you find out all the stories of all the things that they were doing beforehand that their team was covering up for them because they were trying to be a good team member, they were trying to abide by good cultural standards and protecting each other. And all of a sudden, when that person gets cut out, all the stories come out, all the skeletons come out of the closet of all the things that they were doing behind your back, all the things they were saying, the damage they were doing to the culture, their lack of performance, et cetera. And most of the times, most of the times, within a matter of a few months, the person that gets cut out of the organization, their replacement, is a far better, more superior fit for that role. They do a better job, they're more productive, they make more money. The people that they work with are more efficient. And realize that one bad apple inside of an organ, one bad cog inside the machine, slows everything down. And so sometimes you won't fire someone. Cause you're like, what about the productivity of the team? What about the efficiency of the team? We won't be able to make as much money. And then you cut that person out and realize the entire organization that the grease of their gears, everything going well because you took out one defective part from the machine, everything works more efficiently, more effectively, and you make more money. Every single time I've had to replace someone, their replacement became an upgrade to the team within a matter of just a few months. Now, Reed Hastings, the founder of Netflix, talks about increasing the talent density of a team. And usually what that takes into account is when I hire someone, I want to hire someone that is better than everyone else inside that organization or in that team, thereby elevating the average or the talent density of that organization. And I agree with that. But also what that means, if you're adding more people to the company, in order to avoid bozo explosion, you're going to have to cut the people in the organization that are the lowest performers that have not caught up or not staying up with the team, that is elevating and the density of the talent. So if you keep hiring better and better and better and better people, that's good, that's increasing the talent density. But realize that you can also do the exact same thing, and that is increase the average density of your talent by cutting the lowest performers. And that is never easy. If you have a really high performing employee, someone that you think might have general manager potential that you could hand the business off to, I highly recommend investing back into them, giving them education and making sure they have the skills required to be able to one day run the business for you. Go to bluecollarsummit.com, book it for you, your spouse, your manager, and I'll see you there.
