As an entrepreneur, you operate with the conviction that you can change the world. So it can be tough to accept that even as you aspire to solve the housing crisis, create ethical AI, or democratize space exploration, the one thing you will never change is another person.
When I first began to scale my startup, I recalled a common mantra, popularized by Lars Dalgaard, a board member at Andreesen Horowitz:
“In the world of startups, it’s important to make a quick decision, and fire fast…It’s one of those rare instances where appealing to the ‘angels of our better nature’ might in fact be the very thing that kills your company.”
But when it comes to implementation, I quickly learned “fire fast” is not as easy as it sounds.
Should I continue investing in a struggling employee? Am I holding them back by overcoaching and forcing a fit?
To answer these questions, managers must identify a termination threshold: the point beyond which coaching an employee does not bear a return on investment for either party.
Corporate literature has taught us that investing in people is the hallmark of good leadership. But smaller businesses and startups don’t have training budgets, and can only afford to hire people ready to deliver on day one.
Hiring is an investment—not just in salary and training—but also in recruiting, interviewing, and onboarding. When a hire doesn’t work out, you go back to the drawing board on the whole system. So managers, and particularly resource-strapped founders, have an incentive to try working it out, even when there are signs of trouble.
Coaching is an obvious choice. But addressing problems through coaching can add to long-term costs. Once you’ve set the expectation that you will provide a certain level of hands-on guidance, that can become a long-term commitment.
Finding the termination threshold
Do you fire someone the first time they’re late to work? Do you discuss issues and implement a performance improvement plan to give them a chance to assimilate feedback? Do you wait for an ethical breach to let someone go?
As a leader with a tendency to overinvest, I’ve struggled to accept a hard cutoff. But when a problem is hurting performance or negatively impacting the team, the termination threshold is met the moment you rule out coaching as a viable solution. Some issues are coachable, and there are some that no amount of training will fix.
3 issues that coaching can address
Challenges not rooted in character, perspective, or value-misalignment can often be solved.
Skill/knowledge gaps: People can build knowledge about competitors, pricing models, etc. They can acquire skills such as statistical regression or financial modeling. This part is easy.
Goalpost confusion: Misalignment between manager and employee on how performance is measured can also be addressed. Either you did not clearly define the KPIs, or your employee misunderstood them. Talk it out if you are not on the same page about what project or job success looks like.
Communication failure: Writing clear, concise, and polite emails, and speaking to colleagues in a direct and considerate way is the standard at most places of business. These skills are teachable. But, don’t confuse an inability to develop a point of view or think of key messages as a communication failure. It’s not. That’s a strategic issue.
3 issues coaching won’t solve
Certain problems and values are un-coachable and managers should be ready to terminate before these issues escalate and devour financial and professional resources.
Rejecting feedback: Someone about to resist coaching often exhibits a “tell” in the way they receive feedback. If a person responds to critical performance feedback by blaming external circumstances, becoming defensive, taking it personally, denying any problems with the work, or listening with a passive and defeatist affect, you might have a problem. Sometimes, however, a person will receive feedback poorly, only to let it marinate and then accept it. So a feedback reaction should be judged once the person has had enough time to process—not on the spot.
Respect for others: Regularly coming to meetings late or unprepared points to not placing value on others’ time. When a colleague regularly forces people to wait or compromises their productivity because they are unprepared, they are telegraphing a lack of respect and consideration for others’ work, time, and priorities. This values-driven behavior can easily escalate into not valuing the needs and priorities of partners, investors, and customers.
Accountability: A person who regularly misses deadlines can point to their lack of understanding that delivering completed work is the building block of performance—for that individual, the team, and the company. Neglecting deadlines, quality expectations, or commitments can indicate that a person simply does not feel accountable or recognize their ownership in their work. Pay attention even if this starts with small things—like building a product catalog by next Friday. As the stakes grow, so will the problems.
Key compatibility metrics like values and work ethic should align without coaching. Managers often overinvest in trying to “fix” an employee—either to redeem their recruiting costs or out of a misguided sense of obligation. But trying to justify the money you’ve already spent by investing further doesn’t work. Coaching won’t bridge fundamental gaps, so shift gears and find the right person instead. Counterintuitively, letting a poorly matched employee move on is also kinder than trying to force a fit.