Piyush Patel started his career as a teacher, but he pivoted to create a successful organization called Digital-Tutors. At its largest, Digital-Tutors had 42 full-time employees, who Patel said all loved working there and contributed to the eight-figure company that outperformed competitors with hundreds of workers. “Our people were the secret to our success,” he said.
In 2014, Patel sold Digital-Tutors to Pluralsight, an online education company, for $45 million. After leaving Digital-Tutors, Patel had a bit of culture shock seeing a lot of the entrepreneurs he mentored struggle with some of the fundamentals of creating a great culture.
One of these fundamentals was firing employees. While sometimes workers do need to move on to other companies, it’s not always necessary and can send shockwaves through organizations. In his new book, “Lead Your Tribe, Love Your Work: An Entrepreneur’s Guide to Creating a Culture that Matters,” Patel shares how to cultivate winning cultures, even during trying tasks like firings.
Talent Economy spoke with Patel about the ins and outs of firing employees while maintaining strong company culture. Edited excerpts follow.
Talent Economy: Naturally, firing an employee impacts the company. What are some of the ways you’ve seen firing change worker attitudes and company culture?
Piyush Patel: How firing someone affects your company culture boils down to how much your employees trust you. Do your employees trust you’re making the best decision for them?
For example, one of the most common reasons I’ve seen employers want to fire an employee is because of job performance. If you fire Bobby for poor job performance, the loss of a colleague can send shockwaves —and extra workload — across the company. By firing someone, you’re asking everyone around them to take the news and the extra work in stride. In the short-term, things can be tough while everyone’s making sure the ball doesn’t get dropped until there’s a new normal.
As different people struggle to find the new normal at different speeds, as a leader you’re less likely to hear the questions being asked. Sometimes they’re asked out loud, sometimes they’re whispered among friends, and other times they’re only asked inside your employees’ heads: What about Bobby’s performance led to this point? Was Bobby given a chance to improve? Was it really Bobby’s fault or was he set up to fail?
It’s human nature that all these questions will filter down to a single question. After hearing about someone getting fired, this is the question every employee will ask themselves: Am I next?
When the seed of doubt is allowed to linger, a natural skepticism will start to run amok. The earlier you can confront that, the better. If you’re waiting until you let someone go to confront that, you’re too late. A good leader is proactive instead of reactive.
TE: It’s never fun to fire someone, but it does have to be done sometimes. What are the instances in which you think it’s appropriate, and what are some instances in which managers can take other courses of action?
Patel: If someone isn’t a cultural fit, that’s almost impossible to overcome. To borrow the adage, you can lead a horse to water, but you can’t make it drink. At my company, we hire for heart and train the hands. Skills can be taught, but a cultural fit cannot.
When I hired one man, Christian, he filled a needed role on a team of artists. He was an ideal employee — great work ethic, great attitude, and was a great cultural fit. There was only one problem: As our company grew, it became apparent his artistic skills weren’t up to our standards.
Going down the traditional route, I offered Christian the additional training and resources he needed to bridge the skills gap from where he was to where he needed to be. Unfortunately, it just wasn’t working.
Instead of letting him go, I sat down with my leadership team to find a solution. Christian didn’t have the skills to do the job he was hired for, but he had valuable skills. The challenge was finding where in the company we could use his skill set.
We decided to move him to technical support. The result was similar. Christian continued his great attitude, work ethic and cultural fit. However, his work was just as ineffective.
Not willing to give up easily on someone who was obviously a high-potential employee in our organization, we tried moving him again. This time we created a new role on our production team for him. You know what? He blossomed.
Christian applied his broad knowledge from bouncing around other teams to develop a new production pipeline that helped things move between teams much more smoothly. In no time at all, Christian became an invaluable part of the team and pushed the company to new levels of productivity we’d never been able to accomplish.
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It’s easy to focus on skills. Job openings are typically placed for your company’s immediate needs and similarly, people are let go when they struggle to meet the expectations they were hired to achieve. When you’re building a successful culture, there’s another side to the coin that goes beyond skills. When employees are struggling to succeed, first ask yourself if they’re a cultural fit. If they are, it’s your job as a leader to remove the roadblocks that keep them from using their skill set to push your company forward.
TE: When someone does have to leave the company, what are some of your suggestions for lessening this impact?
Patel: As you said earlier, it’s never fun to fire someone. When everyone is out for themselves, letting someone go isn’t bad — it’s an opportunity. There are some clear steps you need to put in place to fire someone while maintaining your positive culture.
First, be certain. Do they live the core values? Do they need more training? Is it a leadership problem? A lot of employees get thrown under the bus because of bad decisions from leadership. Be confident you’re making the best decision for your people.
Second, have an honest clarity about the situation. Be open and sincere with your tribe about why you made the decision. Don’t forget to check on the laws in your area to get a solid understanding of what you can and cannot say.
How your tribe reacts correlates directly to how well you’ve established the ongoing building blocks of trust with your tribe.
From my own experience, Jeff was a real-world example of this. Jeff was a talented artist who worked for me for years. During that time, he was a perfect fit for our culture. Through hard work, he became a standout performer and helped build many of the artistic standards that defined our growing brand. As our company grew, he grew into a leadership role for younger artists hired after him.
All that came crashing down one day when a startling revelation was brought to my attention: Jeff harbored a prejudice against one of the co-workers on his team. When I confronted him about this, he passed it off as harmless jokes. Except they weren’t harmless, and they weren’t funny to anyone but himself. His conduct clearly violated one of our core values of respect, so I let him go.
Answering a previous question, I mentioned earlier how trust plays a big part in how firing influences your culture. That coincides with the steps I mentioned above.
After I was certain firing Jeff was the right decision, I had to explain it to my tribe. This transparency is the only way your employees will be able to believe you have their best interests at heart.
Immediately after letting Jeff go, I called an impromptu meeting with everyone in the company. For some who worked alongside Jeff and were familiar with his behavior, the decision wasn’t a shock. For others who didn’t work closely with him, it was unexpected. Our impromptu meeting explained why they wouldn’t be seeing him in the break room in the mornings or at company events anymore.
My purpose for gathering up everyone in the company at once was to make sure everyone got to hear the same information at the same time. There was no chance for gossip stemming from many versions of the story.
During the all-staff meeting, I explained the situation with as much depth as I legally could. As I told my tribe, my decision was all rooted in our core value of respect. This core value was one I’d defined to my tribe years earlier as: We will not tolerate the disrespect of people or property.
Finally, I opened the floor for questions. Again, it was about giving everyone the chance to get answers at the same time. To my surprise, some of my employees used this the time for questions to express their thanks for making the tough decision to stick to our core values. Those who weren’t aware of Jeff’s behavior were understandably shocked — as I had been when I first found out. However, they weren’t surprised by the consequences. As much as it hurt to let Jeff go, everyone understood it was the best decision for the company.
TE: How should firing employees and laying them off differ? Or should it?
Patel: Imagine a completely calm pond. The water is still; there’s not even any wind to disturb the water. What will happen when you throw a pebble into the water? Now toss a boulder into the water. What’s the difference?
From the initial splash to the ripples that cascade across the surface of the pond, the reaction is proportional to the size of the object you threw in. So is the time it takes for the pond to return to its original state.
Now imagine what would happen if you keep throwing rocks — pebbles and boulders — into the water. Any hope of returning to the original calm state gets lost.
When it comes to your company’s personnel changes, your company culture is that pond. It’s not just firing, though. Each time you make a change by hiring or firing someone, you’re throwing a pebble into the pond. It’ll take some time for your company to establish a new normal and return to the calmness that’s required for productive work.
Every situation is unique, but one common difference between firing and layoffs is the number of people affected. Firings usually take place one at a time while layoffs commonly include many people or complete departments. You’re throwing boulders into the pond.
How much your tribe trusts you gets put to the test when you fire someone. That test grows exponentially with each personnel change you make. Trust is hard to build and even more difficult to rebuild. The more of an effort you put into building that trust today, the better off you’ll be if you’re forced to make difficult decisions tomorrow.
TE: What else should our readers know as they consider their practices of firing employees?
Patel: Nothing about firing someone is easy for anyone. Throughout it all, remember your employees picking up the extra workload left in the wake of someone getting fired. The more people are let go, the more pieces need to get picked up by those around them.
Be realistic about the changes in the workload. Sometimes new or existing projects must go on hold for a time as your tribe collectively works to find the new normal.
Lauren Dixon is a senior editor at Talent Economy. To comment, email email@example.com.