How to fire an employee and why is firing essential?

Why should a CEO be firing anyone? Not our words, but those of straight-talking Glenn Elliott, who recently spoke to our members about preparing organisations for scale. Why should we listen up? Well, Glenn started employee engagement platform, Reward Gateway, with just £50,000 in 2006. No VC or start-up funding, just what the founders could scrape together on their credit cards.

12 years – and a couple of PE sales later – Glenn had grown the SaaS company to more than 400 staff, 2,000 clients and six international offices, before he moved on to pastures new. Not to mention a stonkingly impressive valuation of £440m when it was sold in 2021. Over the years he’s learnt the art of being kindly cut-throat when it comes to getting the very highest calibre of teams in place for scale. After all, the job of a growth CEO is about surrounding yourself with the right people – and that means firing the wrong ones.

In this article, you’ll discover:

  • Why lengthy tenures can be at odds with growth
  • How to approach awkward conversations – even firing ‘friends’
  • And why a fear of offending one employee, can lead to alienating many more…

Beware of long tenures

According to Glenn, and from what we know from conversations with our CEO members over the years, a big hurdle you may face is staff who’ve been in their jobs for too long. They can be prone to narrow professional outlooks, due to inexperience of doing things differently or in challenging the norm. Instead, employees with long tenures can be risk adverse, yearning for the status quo.

No place for stability

Yet, this is a far cry from what an organisation that’s preparing for scale needs to propel it forward. Arguably, it can threaten to hold back innovation and growth. As Glenn puts it, “iteration is the mother of invention and success”. And this includes a changing of the guards when needed. He explains:

“We tend to think that long tenure is a good thing. But I’ve always refused to report to investors on employee churn. That’s because it’s a complete red herring. If people don’t like change, this is not really the place for you. And if an employee really wants stability, this is not the place to find it. Change is essential to creating a really good growth business that’s very focused on customers, generates huge amounts of cash and makes big profits.”

“If an employee really wants stability, this is not the place to find it.”

Approaching awkward conversations

It’s not all about long tenures. It’s about what works with the growth phase of your business. Or rather, who works. Cue awkward, but necessary conversations, like the one Glenn had at Reward Gateway with his colleague. And now, you’ll be pleased to hear, good friend. This senior employee had been integral in helping scale 10 engineers to 100 and building an entire offshore centre in Bulgaria. But then, due to the changing product/ customer landscape, Glenn made the tough call of firing him and taking him out of that role.

We thought you liked him!

“Obviously, he was pissed,” recounts Glenn. “That was not his favourite day at work. But it’s a very good example of taking someone out of a role that had been exceptionally successful but wasn’t right for the next stage. And I can remember my investors saying, ‘We thought you liked him.’ I said, ‘I love him. He’s amazing’. There was no one else who could’ve taken me on that journey. And I will be forever grateful for that. But he was not the right fit for the next 18 to 24 months. And I think constantly keeping the team in review is one of the hardest things for leaders, because they’re often very reluctant to do it.”

“Constantly keeping the team in review is one of the hardest things for leaders.

The needs of many outweigh the needs of one

This reluctancy also comes when dealing with company stalwarts who’ve possibly been in the game longer than you, and no doubt know more about the day-to-day minutiae of the business. There’s a real fear they know too much; their departure will leave a knowledge void that’ll be hard to be filled, quickly. However, as Glenn points out, this outlook puts the emphasis on the needs of that one individual – ahead of the rest of your staff.

Fear of offence

“CEOs often tell me at some point a senior member of staff, middle management or above, isn’t the person they want in the role, hasn’t been for years and really should move on. But they can’t do it because the person knows too much. And that means a company is running with a person in a role who isn’t the right person. To use the Star Trek analogy: the needs of the many outweigh the needs of the one. You’ve got to think about your whole workforce and the fact that everyone who shows up to work deserves to work in an organisation that’s the best design and structure that you can possibly think of right now. And if you’re holding back for fear of firing and offending someone, you’re letting everyone down.”

“Your whole workforce deserves an organisation that’s the best design and structure that you can possibly think of right now.”

It takes a village to win a deal

That’s true, but it needs to be the right village – filled with the right people. As Glenn Elliott – now Entrepreneur-in-Residence at Tenzing Private Equity and author of ‘Build It: The Rebel Playbook for World Class Employee Engagement’ – has eloquently explained, hiring, and firing people intrinsic to your success or failure is awkward. Hard, and yet essential – to allow your organisation to thrive and grow.

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