Why Your Best Employees Quit And How You Can Fix It

“What’s changed?” I asked myself.

I went through a mental checklist:

• The company was doing well. Yes, we were a startup, and yes it was a stressful environment, but the environment hadn’t changed.
• Her workload hadn’t gone up. In fact, we’d hired a second customer service person to help ease her workload.
• There weren’t any major (or even minor) customer issues. Everything was normal.

There was only one thing that had changed, and it was she had a new boss.

I hired “Tom” a few months earlier to upgrade our sales efforts. He came highly recommended by two of our board members.

Tom had a lot of relevant experience, and Tom had prior success. I thought Tom was going to knock it out of the park for us. Plus, we were raising our next round of funding, and Tom would be a real help raising money.

The problems with Tom started almost immediately.

I had asked Tom when I was recruiting him what his first year working with us was going to look like? Tom’s response was “My butt is going to be strapped to an airline seat.”

“Perfect!” I thought.

So, I was really surprised once Tom started working with us that he wasn’t on the road. Tom was always in the office.

Tom had a problem that was even worse then his lack of travel. Tom’s attitude was really negative.

I talked with Tom about his attitude, and I talked with Tom about his lack of travel. I hoped for the best, but I effectively did nothing.

I knew pretty quickly that I had made a bad decision hiring Tom.

A new senior executive is going to be on a mission to make his or her mark positively. They are going to want to impress you.

Yet, here was Tom acting the exact opposite way. Deep down I knew that Tom was not going to make it.

But we were raising money, and I was worried about firing an executive while we were raising money. I asked myself, “What would potential investors think if I fired Tom?”

So I rationalized and I hoped for the best.

I would deal with Tom after we closed this round of funding.

It was a horrible mistake.

And the first casualty of my mistake was Cyndi.

Cyndi’s enthusiasm waned after Tom took over. She started leaving early, and you could just see she was going through the motions.

So I was not surprised when Cyndi quit.

The signs of trouble with your employees are always there if you look closely. And, the longer you wait, the less likely you are to save the employee.

You have to be vigilant about your culture at all times.

Employees, in my experience, have usually made up their mind when they resign. It’s become an emotional issue, and it’s very difficult to overcome emotion.

My view is simply, "Don't let employees get to the point where they want to quit."

So how do you keep your employees from leaving?

Employee retention starts with hiring the right people.

For me, I am always looking for people who have the following traits:

• Integrity
• Smarts
• Passionate
• Fit the company culture

Employee retention also means getting rid of the bad seeds.

It was pretty easy to see that Tom failed at least one of the criteria. Tom wasn’t passionate about the company (if he was ever passionate about working with us in the first place) any more.

And Tom’s lack of passion, coupled with his bad attitude, was going to infect everything he came in contact with.

You need to take effective and quick action if you have a bad seed.

This is especially true with a senior executive like Tom.

A senior manager that isn’t working out, for whatever the reason, influences (for better or worse) the opinions of many people:

• The senior manager’s direct reports, and…
• The senior manager’s indirect reports, and…
• Other senior managers, and…
• Vendors and customers

It’s too obvious not to take action. But most of us, including me, wait to action. Why?

I think there are two related reasons:

A.  We hope things will get better. I know I hoped things would get better with Tom. It’s really rare in my experience that things ever change.

Somehow the hope paralyzes us, or we rationalize the problem away. I said something like, “Tom’s okay for now” to myself too many times. And…

B.  We’re afraid. In my case I was afraid that terminating Tom would cost us our funding. The existing investors were telling me we couldn’t afford to lose Tom because we would lose our new investors.

I took the board’s advice and I didn’t fire Tom. And guess what happened? Tom quit in the middle of our fundraising. I now had to tell our potential new investors that a VP was leaving the company.

And what was the new investors reaction?

The new investors were relieved. I’m paraphrasing here, but they all said something like, “We’d heard negative things about Tom in our diligence.”

Lesson learned.

But the price I (and the company paid) was the loss of a good employee in Cyndi.

Build a relationship with your team built on trust.

There’s an old saying, “Hire slowly and fire quickly.” The problem many of us have is “Hiring slowly and firing even slower.”

Your team is trusting you to put the right managers in place, so your team (and the company) thrives.

That’s your responsibility.

Your team is also relying on you to quickly fire the wrong people. And that especially holds true for senior executives. And that’s where many of us fail.

Don’t be afraid to take action however painful the action might me. You will earn the trust and loyalty of your team when you do.

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