An excellent business leader will make decisions that prioritize and build the long-term value of their business. Often the decisions a leader will have to make involves people. You will need people to generate the most optimal value in your venture. People can be your greatest asset, and unfortunately, they may also be your biggest liability. There will be times when people and your relationships with them may drain the very value you have worked so hard to build in your company. Sometimes it will be easy to see, but more often it will be obtuse. Regardless, making the decision to terminate any relationship is a difficult one to make. If you are well prepared and thoughtful in making critical cuts, you will have your best chance at preserving the value you’ve built so that you can move forward more optimally in your venture.
First, Recognize That There is a Problem
We all have issues with the many relationships we depend on for the success of our ventures. Relationships that turn sour are like an anchor sinking the value we have worked so hard to build. Whether it is a partner, investor, vendor or employee, at some point you should ask yourself, “Is this person helping or hurting?” Consider three key indicators that someone is hurting and not helping:
- Non-responsiveness: If a person takes too long to get back to you, it demonstrates that you and your business aren’t priorities. In today’s world, no one is so busy that they cannot send you a quick note at least recognizing your communication.
- Tardiness: Punctuality is a sign of deference, and tardiness is very disrespectful.
- Name Dropping: Some folks will just drop about every name they can. With every name that gets dropped, here is what’s really being said, “I have nothing of substance to offer. However, if I keep listing names of impressive people, then by association you might think I’m impressive.” Professionals that add value believe that the work and the character that they emulate are good enough to be substantial on its own merits.
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Second, Prepare Before you Take Meaningful Action.
Once you’ve recognized that you have a relationship that is sinking the ship, you need to be thoughtful and prepare. There are MANY ways to cross a bridge and burning it should NEVER be one of them.
- Consider the circumstances of how this person and your relationship got to this value-draining place.
- Appreciate the view from their side of the table.
- Acknowledge your culpability.
- Aim for a seamless transition, but brace yourself for the aftermath. No matter how excellent your hiring processes are, people change, their circumstances change, and businesses and markets change. So even the very best processes and thorough due diligence won’t eradicate the inherent volatility of people.
Third, Implement a Plan that Works With the Circumstances.
No matter how you slice it, terminating a relationship of any kind really sucks. There’s just no getting around that. The absolute ideal scenario is that you open the barn door and your horse knows it is best to trot on out to greener pastures. This can be accomplished with patience and preparation given the circumstances:
Downsizing: When funds are tight, you may need to cut the fat inside your company as well as outside partnerships or vendor relationships through layoffs and downsizing.
- Educate your workforce. You want to make sure those who are going to be laid off or have contracts discontinued are marketable.
- Extend appropriate generosity in your relationships so you will have earned loyalty to keep options for future relationships open.
- Be up front. You don’t want to shock anyone because you are afraid of making them nervous. No one likes feeling like something has been going on behind their back, and that makes people paranoid and contentious.
- Offer tangible support such as a recommendation or severance where appropriate.
- Get exit in writing. Severance and other support should be contingent upon a mutually agreeable and graceful exit. There should be the incentive for the exiting employee to maintain a good relationship with the company.
Terminating a relationship for cause: This is a heated situation. It is ALWAYS best to suck the oxygen out of a fire rather than throw kerosene on it.
- Intervene early. Get involved as soon as indiscretions or mistakes are noticed.
- Give the person an opportunity to turn the bus around.
- Implement a process with tangible steps and milestones to achieve so that everyone can be on the same page.
- Use metrics to demonstrate the ‘bad fit.’ Numbers are impersonal which can help take some of the visceral and defensive tendency out of the conversation.
- Put a date on transition and/or termination.
- Admit your own responsibility for the failed relationship.
- Promote and encourage the notion that the outcome is the best possible for all parties given the circumstances.
- Find a private place and meaningful outlet to vent all of your frustrations.
Tough decisions will have to be made even though you won’t want to make them. You can cross these bridges without burning them if you take the time to make sure you aren’t sending value out the door with those you need to escort to the door.
To hear more from the Unapologetic Capitalist, visit Alison’s full website.
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