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36 Hours of Pain: Firing is More Critical than Hiring

10/02/2020
36 hours

Terminations suck.  As humans, our social tendencies are to avoid conflict.  We don't like it.  In his book, Traction, Gino Wickman describes the thirty-six hours of pain that precede an employee termination.

[A good friend of mine shared this powerful observation with me that has now become an EOS staple.

He shared it with me after a tough decision he made in his business. He let a long-term employee go who had been with him since the beginning. Unfortunately, the company had outgrown this person. It was excruciatingly difficult, and he anguished for months.

Once he decided, his people were happier, he was more satisfied, and the company was better off (so was the person who was fired, as he found a job that better suited him). In hindsight, my friend realized that he would have saved everyone involved months of hassle if he had decided sooner when it needed to be done. Ironically, when he finally decided, he realized only 36 hours of pain between delivering the news and executing the transition.

I have now had many clients that have experienced this same dynamic and have validated this truth.

You may be sitting there with a tough decision that needs to be made; maybe you've wrestled with this for months (maybe longer). I urge you to solve it for the long-term and greater good of your company. Save yourself and your people the hassle. After all, once you do it, you should only experience about 36 hours of pain.]

Sound familiar?  I spent time this morning coaching a company president though this concept.  The executive has had a lousy fit employee for several years but never made a change.  Why? That's our focus today.  I consider terminations more essential to success than hiring because one is easy, and the other is difficult. That's correct.  Who you fire is more likely to strengthen your team than whom you hire.  Let that soak in a moment.  One more time, firing is more important than hiring.  This perspective will make sense in the end, stay with me.

Hiring is always a guess because we take a chance on a new candidate. Impressive resumes, excellent references, and fantastic interviews do not portend the truth.  As hiring managers, we have all experienced this with candidates who DID NOT work out.  We employ assessments, group interviews, and many other tools to fill this gap, yet bad hires continue to get through the process.  Nobody (with experience hiring) is always successful.  Candidates are sneaky, truth manipulating, doppelgängers (evil twins) of the people who sit in our office (or zoom on our screens). 

Terminations, on the other hand, are much less fuzzy.  The president on the phone (with me) this morning has known the person is not a good fit, causing tension on the team, and is not trusted.  The tendency to avoid terminations is the problem.  It costs organizations millions of dollars in productivity (and additional turnover) when a manager realizes a hiring mistake (awareness), delays action, and the employee gets terminated.  I call this realization cost.  You discovered the problem and failed to act.  And that does not include the opportunity cost from not having the right candidate in the employee's position.  A "superstar" sales professional in the role of a mediocre "dud" will add significant value to your company's financial success.  A high-performing design engineer will add far greater value than an incompetent engineer who took the job only to satisfy his parents.  Making room for better talent is the number one job for a manager if winning and success are the business's goals.  Otherwise, you are subjecting other team members (including yourself) to untold suffering and misery that is entirely unnecessary. 

I know this is contradictory thinking in the world of business.  Generations of harmony-seeking humans conditioned us to avoid conflict.  Litigation and liability have made us accept a known negative contributor instead of searching for the unknown positive candidate.  It is time to rethink this approach to business.  Unless altruism is your business's purpose, you must make room for talent to improve performance, morale, and the bottom line.

There is one more important concept to consider. "Cost of Waiting" (COW) is a significant metric that many business leaders do not examine.  How much does the wrong person cost your organization?  I recently had a conversation with a CEO who had identified two underperforming (and under-motivated) sales professionals.  Her initial approach was to wait two months before termination.  I challenged her decision by asking the fully loaded costs for those two employees in her company.  She estimated the monthly cost per person at $7,500.  Two people at that salary for two months are significant.  Her COW for that decision is $30,000.

The counter-argument to my thesis is you cannot fire your way to success.  While this is also true, you can indeed fire your way to better profitability, improved morale, and increased productivity from other employees.  Firing the wrong people will make room on your team for the right people.

Finally, Jack Welch (former, late CEO at General Electric) said we do people a severe disservice when we keep them employed longer than they should be.  If someone is never going to be a top performer on your team (for whatever reason), you must let them find an opportunity for success elsewhere.  Keeping them employed, whether in denial of actual performance or without accountability, is patently unkind. 

Be honest with people and do not mislead them regarding capability (skills and knowledge) to do the job.  Kindness means being truthful.  It is your job to free people's futures, so they can find happiness and success.  Take this responsibility literally and seriously.  Life is too short to work in any position that will never give the satisfaction of success for too long.  It is better to endure thirty-six hours of pain that will make your team stronger and allow you to add talent for improvement.  Unless you are a sole-proprietor, firing is more critical than hiring; or is it?