EP9 – When Is It Time To Fire Someone At Work – Part 1

This episode is the first in a two-part series about firing employees at work.

The Growability® podcast is designed to teach business owners and non-profit leaders a more excellent way to run their business.

Podcast Transcript:

Joshua MacLeod:
Who needs to be fired and how do you know they need to be fired? The first person to check with is yourself.

Bernie Anderson:
Fire yourself?

Joshua MacLeod:
Fire yourself.

Podcast Announcer:
Welcome to the Growability podcast, teaching business and nonprofit leaders. A more excellent way to run a business. Visit growability.com for your leadership, coaching, consultation, and business collaboration needs.

Podcast Announcer:
Do you have someone at your office that needs to be fired? In this episode, Joshua and Bernie discuss some important decisions that need to be made before you fire someone. This conversation will be continued and completed in Episode 10. Here are your hosts, Joshua MacLeod and Bernie Anderson.

Bernie Anderson:
Well, we’ve been talking about building the right team and how to build the right team. And I think what we talked about last week was so incredibly helpful for people.

Bernie Anderson:
Here’s a question I have for you today. What happens… and thinking about this, Joshua, particularly if a leader gets put into a place where, all of a sudden, she’s got this team that she’s never had to deal with before, and this leader has this team and she’s, like, “These aren’t the right people.” This team is not the right team, and I’m going to have to fire some people. How do you fire people?

Joshua MacLeod:
Firing somebody is challenging. There just is no easy way to do it. You know, I think of the… There’s that book that’s the children’s book, “We’re Going on a Bear Hunt,” and they come across all of these obstacles. They come across a big mud puddle and they’re, like, “Well, we can’t go over it, and we can’t go under it, and we can’t go around it, so we’re going to have to go through it.” Firing someone for an organization is one of those things where you can’t get around it. You just have to go through it.

Joshua MacLeod:
In light of what we were talking about last week and the critical importance of making sure that every one of your team members has incentive to be working there, they have very clear expectations of what they’re supposed to do, and you have very good communication with them, before you fire someone, the thing you want to consider is have I given this employee the right incentive? Have I given them clear expectation? And have I been really good at communicating? Where do they stand how things are going?

Bernie Anderson:
I think the thing with that is it needs to be, the incentive, expectation and communication needs to be written down, logged. It can’t just be, “I feel like I’ve given some good incentive, and I feel like I’ve been communicating and you should know…” It needs to be clear.

Joshua MacLeod:
Let’s say you’ve done that. You’ve got incentive, you’ve got an expectation, you’ve got communication, but you still have to let somebody go. Who needs to be fired and how do you know they need to be fired? The first person to check with is yourself. Now-

Bernie Anderson:
Fire yourself?

Joshua MacLeod:
Fire yourself.

Joshua MacLeod:
So I was teaching the collaborative and one of my favorite collaborative members ever, her name was Anne, she runs a really cool company. Her company is a product company, so they create products, they produce the products, they distribute the products. We were talking through about… She’s like, “Well, I’m the only full-time employee at my organization. I started the organization.”

Joshua MacLeod:
I’m like, “Yeah, okay. So let’s ask the question, which are you good at? Are you good at creation? Are you good at production? Are you good at distribution?” She’s, like, “Really good at creation, really good at production.” Then the light bulb goes on, and she’s like, “I need to fire Distribution Anne. Creation Anne is awesome, Production Anne is awesome. Distribution Anne needs fired. Distribution Anne doesn’t really like to do the packing.”

Joshua MacLeod:
We are very likely doing a job in our organization that we need to fire ourselves from. For me, it was a scheduler. I’m not the best scheduling in the world, and so the challenge was, well, dang, if I hire a scheduler, now I’m going to have it pay somebody like 15 to 20 hours a week. But when I come straight down to it, I’m not as good at scheduling as a scheduler would be good at scheduling.

Joshua MacLeod:
So the first step that I did in that, I was fired Scheduling Josh, then I hired Andrea to do my scheduling. What I found was I was is, like, “Oh, my. Now my schedule just got a little bit busier.” So then what happened was I’m finding that with my clients, it was difficult for my clients to get on my calendar. Now my clients were like, “Dude, I can’t even get ahold of you for like three weeks. You’re so busy now.” And I was like, “Ooh.”

Joshua MacLeod:
After that I started thinking, well, I can move Andrea into another position because she’s a rock star, and I want to keep her on the team. I’m going to move her over to do this other task and actually used a technology to replace me. So now I use Calendly. And so I set up all of the availability on my calendar where I can go.

Joshua MacLeod:
So my first step was, let me hire a person. But when I looked at the position, having a person that I was paying 20 hours a week for was actually overkill because there’s a technology that cost me like one hour of this person’s time that could actually do the same job. So now all of my scheduling is done through this calendar app, but the most important thing is I fired myself.

Joshua MacLeod:
Whether you are Distribution Anne that needs to fire herself and go get an intern from a college, or hire somebody and pay them 10 bucks an hour to ship her boxes, or you’re Scheduling Josh scheduling, Josh needs to get fired, before you start going and firing your team members because the job isn’t getting done, maybe the job is not getting done because you’re doing something you shouldn’t be doing.

Joshua MacLeod:
One of the ways that I know I need to fire myself, let’s say I’m making a hundred thousand dollars a year, the draw that I have on the business is $50 an hour. Well, if I can hire somebody for $10 an hour to do the thing that I’m doing with my time, I’ve just saved the company $40 an hour, and then it frees me up to go do $50-an-hour tasks. So my scheduler can’t do the $50-an-hour tasks. On the flip side, I might have somebody who’s incredibly talented at a $50-an-hour task that does it twice as fast as I can. So maybe they cost the same amount of money, but they’re getting two times the amount done in the same time. Well, I shouldn’t do that. I should step out of that.

Joshua MacLeod:
So as a CEO, when you start a business, when you start a small business, if it’s $25,000-a-year employee, that’s basically $12 an hour. If it’s a $50,000-a-year employee, that’s basically $25 an hour. If it’s a $100,000-a-year, that’s $50 an hour. So just plug your time in and say, okay, is it worth me running to Staples and taking three hours to go and get the ink cartridges? So if I’m making a hundred grand that’s 50, 50, 50, well, I just spent $150 to go buy the ink cartridges that are going to cost me $150 [inaudible 00:07:06] $300. But if I send Ink Cartridge Person to go do that, well, then I only spent $12 an hour and I spent $36, instead of $150, to go get the ink cartridges.

Bernie Anderson:
I think what that’s going to require is for you, you being the leader, CEO, leader, entrepreneur of your organization, you need to track your time. You need to know what you’re spending your time on, and there’s a lot of people in leadership who actually don’t know how they’re spending their time. And when they actually start tracking it, it’s like, “How am I spending 20 hours a week running errands around town?”

Joshua MacLeod:
Yeah. Is that 20 hours a week running around town worth 50 bucks an hour?

Bernie Anderson:
Okay. So fire yourself, get your hands out of some things that maybe your hands don’t need to be in because you’re losing money when you do it-

Joshua MacLeod:
That’s exactly right.

Bernie Anderson:
… so who else do we need to look at, as far as firing?

Joshua MacLeod:
Yeah. So before we get to employees, the second thing I think we should really look at and who to fire is actually our vendors. Your vendors are an incredible part of your team. If you have the wrong vendor, when you are launching a business or when you are jumping into a business, basically they can shut you down.

Joshua MacLeod:
We make two big mistakes when we hire vendors. One is, it’s sort of like when you hire your team. We often hire vendors who are most like us, not necessarily the best at giving us what we need in our organization. We have a tendency to hire vendors as friends. “I’m not really hiring a vendor. I’m hiring a frender, and I want this person to be my buddy.” You don’t really want your buddy to be your vendor. Because when your vendor is overcharging you, like, two times, you need to be able to go to your vendor and say, “I really like working with you, but you’re twice as expensive as the next guy. And so I’m going to fire you, unless you bring your cost down.” So if your vendors are your buddies, I hate to say it, but fire them. Get a vendor that is not your buddy. You’ll get a much better deal for your business.

Joshua MacLeod:
There’s seven indicators that you should fire a vendor if, and here’s what they are. Number one is if it’s not their primary business. Don’t hire somebody that this is not what they do every day. When you have a vendor, only hire somebody that this is what they do every day. Your CPA should be a CPA every day. It’s not, “Oh, I do CPA stuff on the side because it’s kind of fun.” The one that does it on the weekend all the time, it’s not their primary business. So if it’s not their primary business-

Bernie Anderson:
Make sure that your marketing person is also not your plumber.

Joshua MacLeod:
That’s exactly right. That’s exactly right.

Joshua MacLeod:
The second question to ask when you’re thinking about your vendor is, do they have a proven track record? Are they really good even on their worst day? Too many times, we have a vendor where you hire them to start out with you. They’re amazing in the first month, but then three months down the road, it’s like, they totally drop off and they’re not good. That happens a lot of times because they grow and they needed to fire themselves in six different areas and hire other team members to do it, but they haven’t done that. So now their service that they’re providing to you is kind of rough. So first is this their primary business? Second, do they have a proven track record?

Joshua MacLeod:
The third is, can they scale with you as you grow? Somebody that’s going to design a website for a hundred thousand dollar organization and somebody that’s going to design a website for a million dollar organization are different. So when I’m working on the million-dollar website, I’m thinking about the cross-intersections with advertisement, with SEO, with marketing strategies, video plans, things like that. On the hundred thousand dollar thing, I’m just I need a brochure,. I need a website so that I can give somebody a card that shows that I have a website.

Joshua MacLeod:
It’s the same thing with a CPA. Well, this CPA works with the mom and pops. This one works with the major corporations. At some point and a time, your organization is going to outgrow your vendor. So the CPA that was perfect when you were this size is no longer perfect when you’re this size. Being able to recognize when you outgrow a vendor is really important. And this is again where it’s like, “Hey, I don’t want my best friend to be my vendor. I want my vendor to be a professional that I’m glad to work with. But the only way that I keep working with them is that they scale at the same size that my organization does, or they continue to service me at the level that I provide.”

Joshua MacLeod:
The fourth thing is, are they always on time? We don’t have time for vendors to not show up on time.

Joshua MacLeod:
The fifth is, are they proactive? Proactive vendors ask you the right questions, and then they give suggestions based on what the health of your organization is going to look like. So if you don’t have proactive vendors, you might want to fire your vendor.

Joshua MacLeod:
The sixth is, and this might sound counterintuitive to everything that I’ve just said, but do you like them? Liking somebody and having them be your best friend is a different deal. If you just don’t like them, you don’t have to work with them. Working with a vendor should be fun.

Joshua MacLeod:
Then, finally, are they motivated? Do they genuinely care about your product or service? Are they good people? Are they people you want to work with?

Joshua MacLeod:
So after you consider whether you should fire yourself in different roles that are not your sweet spot, the second thing you should look at is firing your vendors that are really not in your sweet spot. If it’s not their primary business, if they don’t have a proven track record, if they can’t scale with you, if they’re late, if they’re not proactive, if you don’t like them and they’re not motivated, then really you want to fire your vendors.

Joshua MacLeod:
So this is where as consultants, when we go into organizations, the team members are always worried, like, “Oh, the consultants just showed up. I’m going to get fired.” When, in fact, the consultants, I think if they’re a good consultant, the consultants are saying, “Hey, your employees need incentive and expectation and feedback. If you don’t have that, your leaders aren’t doing a good enough job for your team. The second thing is, if you have the right vendors for your organization, you’re serving your team maximally. And if you have the wrong vendors for your organization, you’re really impairing or diminishing the capacity of your team.

Bernie Anderson:
Doing at least an annual vendor audit of going through and checking and making sure… According to those criteria, that framework that you just gave, I think you would testify to the fact that a lot of organizations could save themselves so much money by just doing a vendor audit and firing the vendors that don’t meet those criteria.

Joshua MacLeod:
Absolutely. Absolutely.

Podcast Announcer:
This episode is part of a two-part series. Be sure to listen to Episode 10 to finish the conversation.

Podcast Announcer:
Thank you for listening to the Growability podcast. We hope this episode helps you run your business in a more excellent way. The mission of Growability is to equip leaders to flourish in their life and work by developing vision, rhythm and community. Visit growability.com for more information, and to talk with a Growability coach.