I Fired an Executive Because of THIS
In this video Leila Hormozi shares a decision‑making framework she calls the "triad" that every CEO should use to evaluate choices. She illustrates the model with a personal story about over‑hiring for a new supplement line, where the head of customer success wanted to keep all 20 new hires despite a lack of work. Hormozi explains the three lenses—business (profits, metrics, sustainability), client (experience, loyalty), and employee (culture, morale)—and shows how over‑emphasizing any single perspective can damage the other two. She describes the pitfalls of leaning too far toward employees (culture decay, profit loss), too far toward the business (short‑term profit focus, neglect of culture and client experience), and too far toward clients (unsustainable service levels). Hormozi advises leaders to identify their natural bias, build teams that counterbalance it, and aim for win‑win‑win (or at least two‑out‑of‑three) outcomes when making decisions. The video concludes with practical prompts for CEOs to filter each decision through the three perspectives.
Chapters
What is up? In this video today, what I want to share with you is the triad of decision-making for your business and what every CEO should be using to filter the decisions that you're making. And this kind of came to mind when I was thinking about— I was actually on a drive, which is why I'm in the car right now. And I was thinking about a girl who was my head of customer success. I want to say it was about 3 and a half years ago. The reason that I ultimately— we left, it was kind of mutual, like she wanted to leave, we wanted her to leave. It wasn't like she she got fired or she quit. It was just a conversation. And the reason for that is because she was missing one of these perspectives, in my opinion, that helps you rise as a leader and as a CEO. I think it's crucial to have. So I'm going to tell you what that is in a second. So essentially what happened was, and I've told this story before, you know, we, we launched, we had Gym Launch and then we decided that we were going to launch Prestige Labs, which is our supplement line. And when we were doing that, we were like, okay, well, we have to either staff up now or staff up later. This, uh, woman wanted to staff up at that time, and she was like, we really need to hire, you know, 20-something people for the customer support for what we're intending to, uh, expect in terms of volume. And I was inexperienced, and though it felt wrong to my gut, I didn't stop it. And so she went ahead and hired, you know, 20 people, and we launched the line, and it was actually very successful and everything. But I had a couple of the people come to me who were new to the team, and they really respected Alex and myself, and you know, a few of them said, can I, you know, lend your ear, Layla? And they said, you know, hey, like, there's no work for us here. Like, half the people on this team aren't doing anything. And I was absolutely flabbergasted. And I just remember like the pit in my stomach because I was like, crap, what do I do? I had heard once in a podcast, like, you don't find work for people. Like, you don't make up work for people to have. But my identity was so tied to being a great boss and making sure that I had a great culture that I was terrified of what the alternative was. And the alternative was that I was going to have to do a layoff. And so I met with this girl and I told her about the 3 perspectives that I needed her to have when making this decision about what to do about the fact that we overhired so many people. And so I'm going to share those perspectives. And this is what I told her. I said, there's 3 perspectives you need to have as a leader in this company. There's the business perspective, which is protecting the health of the business, the profit margins, the metrics, etc. The second perspective is the client perspective, which is how does this add or detract from the client experience and overall the client loyalty that we intend to have? And then lastly is the employee perspective, which is how does this add or detract from the employee experience and the culture that we intend to have? And so when I met with her, I said, you know, I want you to consider all those perspectives. Based on that, what do you think we should do? And she said, Leila, you know, I really think that we just need to find work for these people. And I said, how do you think we're going to find work for— at that point it was 17 people that we knew was too many for the team. And, you know, she obviously had many different reasons, but they were all emotional. And I felt terrible about that. Like, of course I felt like shit. Like, I was like, we overhired the crap out of this. We've had fantastic reviews on Glassdoor and now everything is going to get slammed. Like, our culture is going to go to shit. Like, I know what happens. I know the metrics. I know the math of how it affects your culture after a layoff. And so I was upset about it. But what I knew was that if I was thinking with only that lens, only the employee lens, that I was neglecting the business and the culture. Okay. And so how was I neglecting and how was she neglecting the business and the culture? Well, if I were to allow people to remain on the team who were not doing any work, then what does that say to everybody who's working their asses off, right? Nobody wants to stay in a company that's an A player when you've got a bunch of C players Or they see that you're just employing people because you're afraid to fire them. You're afraid of what that means. You're afraid what it means about you, about your company, et cetera. I explained this to her and, you know, I asked her to think with these lenses and she still came to the conclusion that she wanted to keep everyone on the team. And I said, I respectfully disagree and I do not, I will not allow that if you are on this team. And she said, then I don't want to be on this team. I don't want to be in a company that lays people off. I want to be at a company that finds work for people. And I was like, well, that's great. That's just not here. That was probably one of the biggest examples of not using the, the triad of perspectives in terms of making decisions. And I've seen it happen a lot, and there's leaders that always tend to lean one way or the other. I think that it's really good to identify if you're a CEO or a leader, do I lean towards employees? Do I lean towards clients? Or do I lean towards the business? And everyone has something that they lean towards. And I think especially if you're looking at your team that you're building, you wanna have a team that complements each other. You don't want any one person to be the reason you tilt very far one way or very far the other. And so I'll give you the example of what happens at each extreme, and maybe you can identify for yourself because I think it's really good to know where you're coming from. I know myself specifically came from the very hard employee-leaning way. And here's what that does is if you lean very hard towards the employee way, then you actually tend to disintegrate your culture. And the reason for that is you don't empower people, you do not treat people like adults. I think it often is— it's sacrificing short-term discomfort for long-term dysfunction. Because a lot of the times when you lean always in being in favor of how is this going to affect the employees, then you forget, is this actually going to be healthy for the business? And so because of that, you might suffer your profit margins, you might suffer your metrics. I've seen people go out of business because they're afraid to fire people. You know, they just never fire anyone. They just continue to hire people because they're afraid of hurting someone's feelings or harming their culture. And so because of that, their business ends up going under anyway. Anyways. And so it's like you have to consider the other perspective. The other piece of that is looking at how your culture and how you run and manage your employees is going to affect your clients. If you don't manage that culture, if you have a culture of excess, if you have a culture, uh, where people, you know, A players feel like they're diminished because you have all these C players on the team that you just don't get rid of, then those employees aren't going to be very good to the clients and they're not going to be very loyal. You're not going to have continuity in your business because people aren't going to stay with your business. Because they don't feel you are protecting the culture. You are just protecting your own feelings rather than the culture of the company. And that's the truth of it. And so that's what happens when you lean really far in the employee direction. Now, if you lean really far in the business direction, which that is when you see someone who's like, they're like, that's a ruthless CEO, you know, they're just ferociously protecting the bottom line, that's all they care about, et cetera, et cetera. Now you do see this come out too. And this is when somebody has less, they're very quantitatively focused and not qualitatively focused about the business. So they're not looking at How does this affect the culture? How does it affect the clients, et cetera? They're just like, does it cost money? Am I gonna make less or more profit this month? And that's also not thinking long-term because they're not looking at their business as an investment. They're looking at it as, they're looking at the P&L month after month. They're not looking at it quarter after quarter, year after year. Because sometimes you do have to bite the bullet in the short term to make sure that the clients have a great experience and to make sure that the employees, you know, believe in the culture that you're representing here. And so I've seen this neglected from time to time when essentially what a lot of the times what shows up in leaders specifically is I've had leaders who they start off really favoring employees and then they go to the other side and then instead of having any empathy whatsoever towards employees, then they're just like, oh, I need to fire everybody. Like they're just like a chopping block and they become a robot. And I think sometimes you have to let the pendulum swing one way in order to swing the other. But I think it's really good to, you know, use this video and catch yourself when you're going one too far one way or the other. Now, on the third perspective is when you value and put overemphasis on the clients above the business and the employees. And the way that this usually actually tends to show up is the person is extremely stubborn and they have unrealistic expectations of what we should do to deliver to the clients. They don't consider how much the client is paying, what the profit margins are, how much work this could take for the team. They're always 110% Well, how is this going to affect the client? Some businesses should focus that way because they have unlimited funding and they have an insane market, and so they can because they have tons of money and tons of resources to pour into the clients, and they should continue to meet their expectations. Amazon is an example of this. They literally are like, the client is always correct, we will always go faster, better, cheaper, etc. A lot of businesses do not have the luxury of doing this, yet they run themselves like they should. You know, like a gym, for example. You know, you'll see people bend over backwards, and because of that, they cannot scale because they've got 50 clients that they're doing their nutrition, they're calling them every day, they're holding them accountable, they're texting them every day, and they only are employing 2 people. And so it's like you're capped at 70 clients, you don't know why you can't expand. It's because you're literally letting people pay you $100 a month for what is $500 a month of service. And so there's a point where you go too far in the value— if you've seen Alex's value equation, you go too far in that direction because you're afraid of saying no to a client. And so I want you to think about how this shows up in your business and in yourself because everyone tends to have one way that they lean. And for myself specifically, and for the woman that used to run our customer success department, you know, she leaned too far in the employee direction. Often I would prefer someone in a success department to actually lean too far in the client direction. So then, you know, there's a balance of the other people on the team to kind of pull them and say, oh, we know you always want what's best for the client, but we gotta pull you back this way. And so that being said, I think it's good to identify which one are you. You know, are you more focused on business? Are you more focused on clients? Are you more focused on the employees? And then how can you better round out your decision-making by reminding yourself of that? And what I do when I'm making decisions is I always ask myself, from each perspective, how is this going to affect the decision? So how are the employees going to view this decision? How are the clients gonna view this decision? How's the business going to see this decision? And the best way to make a decision is to say that you must have a win-win-win with all of them in order to move forward. If it's not a win-win-win, then it's, you know, and it at least has to be a two-thirds win. If it's only good for one-third of the business, then it's probably not a good decision. If it's good for two-thirds, sometimes you have to make shitty decisions. In many cases, if you can get creative enough, you can have a win-win-win. And that is what I have learned after years of decision-making and of trying to train my team in terms of how they should look at things. I always have to let them know where they fall on that spectrum. Do they fall too far in the business, too far on the employee, or too far on the client side? And so I hope that was of value to you. Remember the triad for decision-making. Filter your decisions through this and become aware of where you lean as a CEO and a leader. That is all I have for you today, folks. I will see you on the next one.
