What Now? Firing a Key Executive: Possible Outcomes.

Andreessen Horowitz General Partner Peter Levine is writing a series of tech leadership case studies called “What Now?” presented in two-part question/answer blog posts that will appear first here on AllThingsD. This is his second post. The problem appeared here on Wednesday.

I was fired from my first job as a programmer after college, and I’ve agonized over terminations ever since. The day I was fired was one of the worst days of my life, and no matter how it was presented, I felt like my world had collapsed. The event had a profound impact on my career and on my actions as a manager. For me, there’s nothing easy about firing someone.

That said, I’ve had to fire many people in my years as a manager and CEO. My worst days were when I knew I had to have “the conversation.” While firing anyone is hard enough, the most difficult terminations were people whom I had recruited and hired as direct reports. I find it disappointing to see my “rock star” fail — and having a vested interest in the person makes the decision quite difficult. There is usually a long period during which the decision process loops: fire, coach, keep, fire, coach, keep, (repeat). As a result, termination day often happens long after I’ve internally decided that the person needs to go.

Industry wisdom suggests that you fire someone immediately after recognizing that a person must be let go. I agree with this — I’ve never looked back on a termination thinking, “I should have waited longer to do something” — but it is way easier said than done.

Earlier in my career, I always wanted to spend the time to work things out for my employees, especially the folks I hired and managed directly. Unfortunately, I was rarely able to change the outcome of the situation, and I would often waste precious time not moving forward with the termination and subsequent re-hire. As I tried to work things out (and inevitably put off making a decision), the impact on the organization and the reflection on me as a manager all took its toll. I’ve since learned that moving forward quickly is the best overall approach. Still, firing someone sucks.

Let’s look at the SpiderNet case and break down some of the pros and cons of each choice.

  • Find him a different job in the company. It is very rare in a start-up that you will actually have a job opening for another role that can be filled by a person with a different skill set whom you also want to terminate. This may be easier in larger companies, but not at a start-up. You need to be brutally honest with yourself before making a lateral move and ask, “Is the new position needed and is this person best for that job?” If yes, then move the person. Otherwise, terminate.

    In the SpiderNet case, you are also dealing with a person who is lazy. In my experience, character flaws cannot be corrected, regardless of where you put the person. Once lazy, always lazy. There are additional downsides to creating a new position: how does the rest of the team feel when you “protect” a non-performer? Are you seen as wasting money creating a “non-job”? Are you not stepping up to deal with the problem?

  • Put him on a performance plan. Performance plans are generally useless for executives. These plans are nothing more than negotiated action items that are a problem to manage and never get at the core of the issue. My philosophy is that a senior executive is expected to bring a level of expertise and job performance to where you don’t need to hand-hold them with a list of negotiated action items. Do the job or leave. At the end of the three-month plan, the executive usually makes the most of the pre-negotiated goals, but you’ve not made the person less lazy or any more competent. They’ve simply made it through a set of hoops and you still want to get rid of them. Human Resource directors in larger companies always want to put people on plans but I have never seen a three-month plan change the long-term outcome for an executive. Plans only prevent you from making an important change today.
  • Fire him and re-hire. As you might imagine, this is my preferred outcome. Do it and move on. Get the new hire process going and don’t screw around. Always treat the person you are terminating with dignity, put together a respectable termination package, and never make the termination personal. In the SpiderNet case, I might ask the co-founder to step back in to run engineering on an interim basis while I searched for a new VP.

When running a software company, hiring is one of the most leveraged activities we can do. The higher the position is, the more impact and importance that hire has on the success of the company. At an executive level, hiring the wrong person can result in months or years of delay, and hiring the right person can help to accelerate the business to entirely new levels.

When a critical hire needs to be made, I have often made the mistake of focusing on managing the department that has the opening, rather than focusing on making the right hire. I have since learned that prioritizing hiring first and managing the department second yields a much more successful hire.

Finally, I’ll say it again: Firing someone sucks, so take the time to hire correctly and you’ll never have to be in a position to have “the conversation.” Let me know the secret when you achieve 100 percent success.

Peter Levine has been a lecturer at both MIT and Stanford business schools and CEO of Xensource. Prior to Xensource, Peter was EVP of Strategic and Platform Operations at Veritas Software where he helped grow the organization from no revenue to more than $1.5 billion, and from 20 employees to over 6,000.

Must-Reads from other Websites

Panos Mourdoukoutas

Why Apple Should Buy China’s Xiaomi

Paul Graham

What I Didn’t Say

Benjamin Bratton

We Need to Talk About TED

Mat Honan

I, Glasshole: My Year With Google Glass

Chris Ware

All Together Now

Corey S. Powell and Laurie Gwen Shapiro

The Sculpture on the Moon

About Voices

Along with original content and posts from across the Dow Jones network, this section of AllThingsD includes Must-Reads From Other Websites — pieces we’ve read, discussions we’ve followed, stuff we like. Six posts from external sites are included here each weekday, but we only run the headlines. We link to the original sites for the rest. These posts are explicitly labeled, so it’s clear that the content comes from other websites, and for clarity’s sake, all outside posts run against a pink background.

We also solicit original full-length posts and accept some unsolicited submissions.

Read more »