When Having Your Employees' Back Means Letting Some Of Them Go

Every company or team has the people that have been there "from the beginning" whether literally or seemingly. These employees have been critical to the success of the business by putting in countless hours and effort beyond what was expected of them. When this happens once, the leadership feels gratitude, but when it happens repeatedly for 10, 20, or even 30 years, this gratitude often morphs into a sense of indebtedness.

Eventually, as the company grows, these employees move into principle engineering or leadership roles – they are a cornerstone for the company. Unfortunately, a subset of them also view this as their repayment for the years of hard work, and they shift into cruise control until retirement. To be explicitly clear, this does not affect ALL employees with this kind of tenure. In many organizations the number might even be trivially small, but it is crucial that you learn to identify when this is happening before it is too late.

There are several problems inherent to this situation, most of which are compounding over time. These complacent engineers lack the curiosity and drive that used to compel them to exceed expectations, this drives down product quality. Sure you might hit your first few deliverables, but eventually you'll learn that there is so much technical debt that the whole project is basically held together with duct tape. Additionally, the "lifer" mentality usually comes with a dislike, or even outright fear, of young blood that will come in and upset the apple cart. Young 20-somethings might suggest test driven development or an Agile workflow, and the principle engineers will push back; not only do they not want to change what has been working for them for 20 years, they don't want to get shown up by "a kid." They had a good thing going, why risk ruining it and having to work extra to learn something new? Never mind the duct tape holding the project together, they're retiring in four years! 

Keep in mind that the young men and women proposing these changes haven't experienced what you and the existing team have, so while their optimism and drive are critical to your success, that doesn't mean they should be blindly followed either. You need a VP or Director of Engineering and/or Operations that understands the balance between leveraging what has worked historically with knowing when that same practice will become the bottleneck that derails the company's growth.

All employees, both new and existing, should be hired and the continually evaluated for curiosity. Curiosity is what drives good engineering, and curiosity is what will get you that extra 10% in times of need. Not everyone has the right personality for curiosity, and that's ok, but they will not do well at a smaller company that is looking to grow. Furthermore, some people will see their curiosity wane over the years. This means that either you aren't challenging them, or the fire has burned out and they should be looking for something else; a company with thousands of employees can afford to have a principle engineer on cruise control, your company of 20 cannot.

To bring this back to the beginning, how do you let someone go that has been so crucial to getting you were you are today? You have developed a friendship, you know their family, you have watched their kids grow up, is it really a heartless move to cut them loose at this stage of their career? No, it isn't, if it is done properly.

Your feeling of indebtedness should only be a feeling. This whole time, you should have been compensating these employees for the value they brought to the table, and this number is dynamic. If a mid-level engineer single handedly saved the project that put your company on the map, they should have gotten a bonus that might have put their pay above those several levels more senior than them. They delivered value, so they should receive compensation commensurate with the value they delivered. If you had been giving them the industry standard pay while they carried the company for you, then you are literally indebted to them and that makes parting was more challenging (although, nothing a nice comp package can't solve). If they have been taken care of at the level of value they delivered, your business owes them nothing. That said, there is a lot of value in being flexible and supportive during the transition, give them time, a compensation package, letters of recommendation, and/or make personal introductions in the industry as is necessary to avoid burning a bridge. Who knows, this event might be what they needed to rekindle the fire of their curiosity and you will be working for them in five years.

Alright, so your employee has been compensated well, they might even be a part owner in the company. So after your next board meeting where you decide you need to let two go and hire five new engineers, you just go and cut a few folks who are on cruise control, right? Wrong. First, hopefully it hasn't gotten so bad that they're on autopilot and napping in the back seat, rather than just cruise control. Assuming this, you bring them into your office and have a perfectly honest discussion with them. You explain the needs of the business and where they're falling short. None of this should be news to them because you've had regular one-on-ones and a review process that contains constructive feedback, but they haven't gotten the message. It is time to go. You work with them to find a home in a large competitor where you know a few managers, or you agree to write them a letter of recommendation, you give them a number of months to phase out their work and train others. Maybe you even put them in touch with a lawyer to setup a consulting LLC and agree to hire them for consulting jobs as needs arise. 

This is a painful and challenging process, many of them will push back. Once you commit to this, it is dangerous to cave and give them "a second (really, it's the eighth) chance." If the fire of curiosity is gone, it isn't likely to come back under similar circumstances. Someone that isn't willing to understand that your primary responsibility is to the business is not someone you want around spreading rumors or sabotaging projects.

It sounds cold, and on a level it is, but it is the nature of business. As your company grows, it is guaranteed that you will have at least one, if not several, of these painful discussions with colleagues you have been battling with shoulder to shoulder for years.

The best things you can do are create a culture where curiosity is rewarded, hire for curiosity and humility, give regular feedback, and be willing to make hard decisions.

  1. Incentive: Humans respond to incentives, so complacency usually only sets in when there's an incentive to do so (such as a huge salary that was earned and now a standard 2-3% yearly bump is all you need to live comfortably). Years of service should factor into salary, but value added to the company should factor in more. This incentivizes the driven individuals that you want to keep and incentivizes those looking for an easier "ride off into the sunset" to go and get the large stable salary they can get at a big competitor. In this case, everyone wins. If you incentivize the behavior you want, it will drastically decrease the number of hard conversations you will be required to have.
  2. Curiosity and Humility: Hire people who demonstrate curiosity and drive while retaining humility and a willingness to be wrong when presented with evidence. Being wrong is an opportunity to improve oneself, so a willingness to be proven wrong demonstrates curiosity, drive, and humility all at once.
  3. Feedback: You should be providing regular feedback so that if curiosity and humility begin to drop, there is no surprise when the employee has to be let go. You cannot expect employees to read your mind, everyone has their own perspective. You must not assume your base assumptions or goals are shared, so this feedback process enables you and the employee to review past and define current and future expectations.
  4. Hard Decisions: As the person running the business, you have accepted that there will be painful decisions. Either you let the company ride off on cruise control into the sunset, or you execute these decisions to enable continued growth and success. There is no third option, only degrees of prolonging the former.

The last, but potentially most important, thing to consider is how letting some of your most senior people go is how you demonstrate that you have your employees' backs. It sounds counter-intuitive, but if you've grown to 75 or 100 employees, the odds are good that most of them are relatively young (or at least new). The few that were with you since the beginning are only a small portion of the workforce. So by letting some these lethargic few saunter through the last years of their careers while the vast majority works their butts off knowing their salary and bonus don't even come close to the more senior folks, you are telling your employees that you value their time served more than their contribution to your company. You are incentivizing people to simply be present for a long time, you are not valuing material contributions to the company's wellbeing.

Given that people respond to incentives, the best and most driven engineers will leave (since they are promoted at the same pace as their mediocre counterparts) and those that remain will stop putting in the extra effort since it yields no personal benefit. By choosing to keep around four or five principle engineers, you have completely eroded the other 95 employees' confidence that their hard work is valued or that you are willing to side with material value being added to the company over an 'X Years of Service' plaque.

If you incentivize adding value to your company, you won't owe anyone anything. Not only will this make your best employees want to stick around (and as previously discussed, A players hire A players while B players hire C players), it will create a culture around constantly wanting to get better. It also lays the foundation that ultimately enables you to make the hard decisions that demonstrate your commitment to the rest of your employees – you stand with them so long as they stand with the company – and you are incentivizing them to stand with the company.