Between hiring quick and firing quicker

A recent spate of massive employee reduction by few companies in the technology based start-up space, made me think of my pet-peeve. For years I’ve contemplated on, the reasons for which people leave a company; never having fulfilled their potential, with the company.

I’ve been part of over of 1000s of employee selection process, ‘IJPs’ (Internal Job Promotions) and unfortunately quite a few firings! I’ve also had the fortune to be a part of an organization, where the ‘Employee Turnover’ was less than 5% Y-O-Y. This while the Industry average was more then, 10 times!

Planning the Hire

Good practices, start from ‘planning the hire’. Defining job roles and expectations (including time frames) are the 1st key to success. Job descriptions are usually not defined properly. If defined properly, the modus leading to selection (the process defining “why the candidature is deemed fit or otherwise”) is usually missing!

Interview and Assessment

 Prospective employee interviews are often based on ‘gut feel’ factors. The need to standardize’ the Evaluation Process’, has been the ‘Achilles Heel’ for Indian Companies for a very long time, now. Different individuals of the HR/Recruitment Team are likely to have different interpretation of the prospective hire’s Skill sets/SME (Subject Matter Expertise)/Knowledgebase! The process is too loaded, on the side of an Individual’s interpretations.

Some companies have been using different models of EQ/IQ/Personality Assessment for years, successfully. However the ‘scientific evaluation process’, usually stops with the hiring. There is no follow-up on the identified strengths and opportunities, with the individual coming on board. And usually the tests, have no further role in Performance Appraisals!

Human Resources Planning, Production and Control Principles

Further addressing the issue of “quick hiring and quicker firing”, most start-ups (and even many organizations that have been around longer) do not use the concept of PP&C (Production Planning and Control Principles used by manufacturing Industries for Resource Mobilization and JIT Principles of Logistics Management). If PPC concepts were to be used for hiring and employee productivity, ‘hiring in hurry and firing faster’, can be reduced dramatically.

Organizational Investment: Human Resource Development - ROTI

Employee training consumes billions of dollars across the world.  Does every Rupee/Dollar that is spent, garners the expected results? The concept of ROTI (Return On Training Investment), requires ‘Gap Analysis’ and steps to fill in the gaps. This is a continuous process of evaluation, need assessment and skill/knowledge enhancement. I have yet to hear of a single organization which follows this.

Sharing an article below from HBR, which I found enlightening!  

 Harvard Business Review:’ Hire Slow, Fire Fast’ - Greg McKeown

A lot of start-ups hire fast and fire slow. A bias for speed combined with the pressure for high growth drives many leaders to be quick to hire (“We need to fill this role now!”) but slow to remove underperforming employees because they’re busy and would rather put off the awkward, hard conversations. It can lead to what Guy Kawasaki, when he was still at Apple, called “the bozo explosion.”

This dynamic led one Silicon Valley company through a season of undisciplined growth leading up to a massive lay-off. It was the organizational equivalent of open heart surgery: instead of having the daily discipline required to maintain a lean and entrepreneurial team, leaders waited until the organizational arteries were blocked and major systems were failing before putting the whole company into trauma through massive, corrective surgery.

Contrast that behavior with that of a 700-person company with more than a billion dollars of annual revenue. That’s a staggering 1.4 million dollars of revenue per employee — a ratio that has been achieved carefully, by design.

I recently worked with the CEO and her top 35 executives. They want to scale while maintaining their lean and entrepreneurial edge. As I introduced the idea of “hire slow, fire fast,” I thought it might seem a bit provocative. But no sooner had I mentioned the idea, than the CEO interrupted enthusiastically.

She said, “We have had that idea for a decade!” She pointed to one of the other leaders in the room and said he had learned it from his father, who had run a thriving company through the Great Depression. The principle has been key to the company’s success.

In a time of massive youth unemployment around the world, the principle of “hire slow, fire fast” may seem insensitive. However, for three reasons I would argue this approach is more compassionate than the alternatives.

First, it doesn’t serve the world to create bloated, bureaucratic companies that will slowly die. We need healthy, growing companies capable of sticking around for the long run.

Second, it isn’t compassionate to keep one person — but make their whole team struggle as a result. We need teams in which everyone can trust each other to do a great job. If “hire slow, fire fast” sounds harsh or mercurial, consider how harsh it is to allow a whole team to be held hostage by someone who should not have been hired in the first place. And while we’re on the subject, lacking courage is not the same as having compassion.

Third, trying to force someone to be something they are not is neither sustainable nor humane. It doesn’t serve people to keep them in the wrong role, giving them the same negative feedback week after week, month after month, year after year.

Their one wild and precious life, to use Mary Oliver’s term, is worth more than that. Of course, if the right role can be found within the company it should be. But when someone is truly a bad fit, reassigning them is not the answer. This just moves the problem to a different part of the building.

To “hire slow, fire fast,” start by being absurdly selective in who you hire. Mark Adams, the Managing Director at Vitsoe, the worldwide licensee of Dieter Ram’s furniture collection, approaches hiring with incredible selectivity. What he wants to discover is who is a natural fit. In addition to multiple interviews, he and his team have prospective employees come and work with them for a day. No commitment has been made on either side; it’s just a chance for each side to see each other as naturally as possible.

For instance, recently they had a prospective employee help with a shelf installation. He knew how to do the job. But at the end of the day, he threw his tools into a box instead of carefully putting them away. When they shared the experience with the CEO, everyone agreed this was clearly a reason not to make the hire.

That might strike you as so pedantic you’d rather not work for such a company: but that is the point. Your criteria for selection should be so extreme many people would rather not work for you. You’re trying to attract the right select few, not the masses. Mark believes it is better to be shorthanded than to hire the wrong person.

To make this approach work, you also have to fire humanely. This may seem like a contradiction in terms, but by “firing” I don’t mean the traditional, disgusting practice of marching people to the door in humiliation. It doesn’t mean taking people we have worked with and suddenly throwing them out as if they are criminals. We can do this in a humane way.

When one leader in Silicon Valley realized she had made a hiring mistake, she could have tried to hide her error and tried to force the fit through endless rounds of feedback and a painful performance improvement plan. But that’s difficult in a case like this, where the problem is a basic personality clash: the employee was simply more aggressive than the company culture and it felt abrasive to everyone on the team.

So instead, after just two weeks of seeing the effect the new hire was having on her team, she took her aside and said, “I don’t think this is a great cultural fit for us. Let’s not try to force this. You are talented and capable but this just isn’t the right fit.” It went so well the whole team, including the person who’d just been fired, went out together for drinks that night. The company then provided career coaching for free to help her find a better fit elsewhere.

If we “hire slow, fire fast” we can increase what Reed Hastings, CEO of Netflix, has called the “talent density” of our organizations. It is not easy. It takes having hard conversations. It takes leadership. Still, if we can do it then, ultimately, people, teams and organizations win.

 Hire Slow, Fire Fast