When To Fire & When To Coach | Ep 216
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- What's up guys, welcome back to Build. And today we're gonna talk about making some of the hardest decisions that you have to make as a CEO or as a founder of your company.

I wanted to make this podcast because it was top of mind because it's just something that I've been coaching a lot of people on my team on doing and a lot of people in my portfolio companies, operators, leaders in their companies, because I think this topic is not talked about as much as it should be. And it's something that we have to deal with all the time. And that is firing people, letting people go.

Now, I made a podcast on this recently, but I think honestly, it was more instructional. And I really want this one to be one that I'm just going to kind of give you all of my thoughts around this because I have a lot and I have to make these decisions quite frequently, whether it's for my company or another company. And I have to guide people on these decisions literally every week. And so I think that it would be really helpful for some of you who maybe struggle with, should I keep this person on the team or not? I will tell you that

Though I sound composed when I talk about firing people, guys, I hate it just as much as anybody else. Most of the time before I have to let someone go after a decade, a decade of firing people, firing probably close to 100 people personally myself, I still feel like my heart is going to jump out of my body before I do it. I have stomach ache the days before and I feel terrible. And the reason I feel terrible is because

Because I think what makes me love my job and what makes me good at what I do is also what makes those things so hard for me. And that is the fact that I care about people. And I think about all the things before I fill out something to go. I think about the fact that they quit a job to be here. I think about the fact that maybe they moved to work at our headquarters.

I think about the fact that they're going to be really upset and I'm not going to be able to be there for them. I think about what their family's going to say, how it's going to look on their resume. Like I think about all of these things. However, I don't let those things stand in the way between me and making the right decision for my business. Because at the end of the day, what I've come to learn over so much time is that

If I make a decision that's just best for that one person in the short term, I make the wrong decision for the rest of the team in the long term. And so I really do everybody else on the team a disservice by keeping that person there. Think about it like if there's a basketball coach, right? You've got a basketball team and you are a winning team.

And then you bring on a new guy, you recruit him for the season, and it's clear that he is not a fit. He doesn't have the skill and he's not a culture fit. And because he's there, you're losing games, which means not only are you losing games, the championship is at risk, people's personal reputations are at risk, and it makes all of the great players look like medium players because this one person drags down everybody. If you think about it like that, it would make a lot of sense that, yeah, we've got to get that guy off the team.

However, when it comes to our own businesses, I think that there's so much drama that we put between ourselves and making the right decision that it just makes it like, it seems impossible and we feel very unclear. Most of the time when I am talking with people about these decisions, what they say is they say I'm confused, I'm unsure, I don't know.

And usually what that means, guys, is it means they do know, but they hate the fact that they have to make this decision. Usually when we're confused, it's because we have in our minds, logical brain says, yes, I need to make this decision. This is the right one.

emotional brain says, that sounds scary. That sounds hard. That sounds frightening. I don't want to do that. Look at all these bad things that are going to happen. And then it immediately goes to the conversation you're going to have to have with the person, how that's going to feel, all the anticipatory anxiety that's going to lead up to that moment. And so people avoid it. And then they stay stuck in this I'm confused state. When they're not confused, they're just scared. I've had to deal with this many times. The first time that I had to let somebody go

I remember where I was. It was when Alex and I were sending out people to launch gyms. So we had been for ourselves for 11 months in our first business, flying out to physical brick and mortar gyms and essentially doing all the sales and marketing for them. So we would call it a launch. That's where the name Gym Launch for our first company came from. When we would do this, basically we got to a point where we were like, well,

to take on more customers. We need to send more people out to do these launches. Naturally, I hired all my friends, right? I hired all my friends from college. I got all of them to quit their fancy jobs or leave their positions in high paying sales, MLM jobs or whatever it might be, right? They all fly out to the locations and they're actually doing really well.

But one of them, I'll never forget, he went zero for 25. Zero for 25 on sales. And if you know anything about sales, you know that like 20% of people that walk in, they're going to buy no matter what. And somehow...

He got them to just walk the hell out of the door. You know, I looked at the situation. I'm talking to Alex and we're like, this doesn't make sense. Like he doesn't have enough skill. I think that we made the wrong call. And of course we did. We were new business owners. We didn't know what the fuck we were doing. This was like the fifth person I'd ever hired. I'm 22, 23. Like I don't have much experience at all. Because of that, because of my inexperience and hiring the wrong person,

who didn't have the skills, that person had to suffer for that by getting fired by me. And I remember I was sitting in the car and Alex is like, just get it over with and do it now. And I was like, oh my god,

I call the guy, I tell him the news, he was so upset. I hang up and I just remember I'm sitting in the driver's seat of the car, I just start crying. And I'm sobbing. I'm like, I've ruined his life. He'll never eat again. He's going to hate me forever. He's never going to get a job. I'm just going complete worst case scenario. I'm like, I'm evil. I just felt terrible about myself.

I say that because I want you guys to understand where I'm coming from. I didn't just wake up this morning and be like, "Listen, this is how you fire people. This is when you do it." It's a very logical process. Like, I have had to learn how to manage my emotions around this process because it is definitely a difficult one to make. A lot of the times when we're making this decision, this is what makes it so hard, is people say, "Okay, either it's a skill issue or it's a cultural issue." Correct.

So when it comes to these things, I think that in my opinion, culture is the most important one. If somebody is not a culture fit, it's pretty black and white for me. They're not a culture fit. And the reason that I'm so focused on hiring for people that are culture fit, that have the values I have is because I know how hard they are to teach. Okay. And this is what I really want you guys to think about. This is what I think with all the time, which is it's really hard to teach somebody to be kind, right?

it's a lot easier to teach somebody how to read a script, how to put on an event, how to build a sales team. Those are all practical skills, whereas being kind is one skill that's the accumulation of many other skills that lead into it. And so I call it like a bundled term, like being kind means you're polite, being kind means you're mindful, being kind means you're empathetic. Reading a script on the phone is like one thing.

And so the reason why I'm so adamant about hiring for values and hiring for culture is because I know how hard those things are to teach. And I know that if somebody comes in and they don't have one of our values, I know how long that could take me to teach it. And then I have to ask myself this question. This is what I want you to think about if you're saying somebody's not a culture fit. Could I teach them this skill?

And let me walk you through my thought process here. My answer is usually yes, I could teach somebody how to be more sincerely candorous on my team. I know how to teach that. Six years ago, I actually don't think I knew how to teach that. I think I was a much worse teacher. So I didn't have the skill to teach people some of these very soft skills that take a long time. Yes, I could teach them that. Okay, how long do you think it would take?

realistically based on where this person's at. Maybe I say, oh, I don't know, 12 to 18 months. Okay. Then here's the next question I ask myself. Is this the best use of me as a resource to spend two hours a week for 18 months teaching this person to be kind? Let that sink in because a lot of the times what people do, especially if they're a fantastic leader and they really want what's best for people is they think,

"Oh, well, I can teach it to them, so I should." "Nah, I hate the saying, 'If you can, you should.'" "Uh, no, please don't. You should not just because you can." There are a lot of things that you shouldn't do. And I think one of the hardest things that you have to remember

is that as a founder, as a CEO, you want to spend more of your time with winners, people who are already building, already performing, already doing well in the company, not people who are struggling. And here's why. Because if people are struggling, then that means there's probably a lot of other people on the team that could help them be proficient in the thing they struggle at.

Me helping somebody who struggles with learning how to sell is a complete waste of my time because I have seven other people on the team who know how to train that skill. But then even so, is it worth even their time? Because should they spend, you know, 10 hours of each week focused on trying to coach up people who are very far away from baseline skill needed to succeed in the role? These are the questions I ask myself.

Now, a lot of what I factor in as to like, is it worth the investment is what kind of investment have we already put in? Has this person been a high performer in the past? How fast is the company growing? Will they be able to keep up or will they deter it from growing? These are all the things you need to consider because the faster that your company grows, the harder it is to wait for somebody to develop.

And so it is kind of a like, you need to develop or you're out mentality. Now that sounds brutal, but guys, if you don't protect the business, the business doesn't feed anybody, including that one person. Your number one job is figuring out who needs to be on the bus, but also who needs to be off the bus. Now that's when it comes to a culture fit, right? And I will say most of the time when I recognize they're not a culture fit, I just try to let them go as quickly as possible.

I'm like, they're clearly not a culture fit. They do not have these skills. This will take me a very long time. My company is growing very fast. And as much as I may like the person, right, this means nothing about them as a person. I'm just like, this is not the best use of company resources. And so because of that, I'm like, I should let them go now. And then they have a better chance of finding somewhere that can invest in them or that skill is not required. And so they're going to succeed right off the bat.

makes it a win for both of us, just a short-term loss. And yes, they will likely not like you or want to speak to you ever again. That is the consequence of being the one who makes that decision. Now, on the other hand, if they are a culture fit, but they're not performing, right, at a skill, maybe they can't close deals, maybe they can't save customers, maybe they can't ascend customers, maybe they can't communicate, whatever it might be. That is, in my opinion, easier to fix than a culture problem.

Now the reason is because I think when it comes to somebody lacking in performance, there's really two things it could be: skill or will. Okay, that's what I think through. It's either skill or it's will. Skill is maybe they don't know how to say words on the phone to somebody. Maybe they don't know how to use tonality in their voice to fluctuate. Maybe they don't know how to ascend customers. Maybe it's a practical skill that they we thought they knew but they don't know. And those are much easier to teach

because they're much more straightforward. Something that the Ritz-Carlton says is they would always rather hire for personality than skill because they can teach anybody to make a bed. And I love that because that's how I think about it too, which is like, I can teach somebody a lot of these practical skills fairly quickly because they don't require all these other skills underneath of them to be proficient at. However, teaching someone culture, teaching someone to become a different person and change their personality much harder, right?

And so the first one is, do they lack a skill? And what you want to do is you really want to dial in what that skill is. I had someone stop me in the hall the other day and he said, hey, I really want to get some feedback from you on just like where I can do better and where I can grow because I stepped into this new role. Immediately, I was like, well, I have two seconds right now. Like, oh, let me just tell you. He was like, okay, what is it? And I was like, well, I think that the skill that you are missing is executive presence. Let me tell you what that means. When we are on meetings, you let other people talk over you.

you don't interject your opinion, and you're often very passive, meaning you let other people make decisions for you. I was like, you don't speak up for yourself and you don't advocate. And I would say that if you added that one skill to your toolkit of all your other skills, you'd be a weapon. He was like, wow, that's really helpful. I was like, absolutely.

So what that tells me is, one, he has the will because he wants to get better, right? And now I just need to get very precise about what the skill is. Now, even in that conversation, I don't think that that's precise enough to give someone direction as to how to get better. And so what I said is, cool, let's get a 15-minute follow-up and let's go through the exact things I want you to do differently. So for example, I have a leader whose goal is to be more direct. And so I said, on calls, I want you to tell people what to do.

Like you're leading the call, it's your project you're leading, so I need you to start off and end with telling people what to do. Give them direction, right? And so on each call, I watch and then I say, great job telling people what to do, right? I made it very clear. So like, you got to be more direct and then like no instructions. Like, how do you be more direct? Tell people what to do. Start off with, this is the five priorities we have. And then here are the five priorities and who's going to do what, right?

When somebody is lacking a skill, you really want to figure out, can I really narrow down on what the skill is? And then can I give them the tool to improve it? If you don't have the ability to do that,

If you're not a great teacher, and if you don't know how to do that, then when someone has performance issues, you're going to only have a very small window of wiggle room in which you can allow them before you have to let them go. Now, why is that? Because the student can only be as successful as the teacher. So the better teacher you are, the more unskilled people you can make successful or make skilled.

versus if you are unskilled yourself, it's just like you have less ability to do that and so you can't tolerate as much low performance as somebody with more skill. Now, it being worth your time is another issue, however, just addressing that one, that's the main one that I think a lot of people have to confront which is like what I just explained to you I can do because I have the skill to teach somebody these things, but if you don't have that skill then you have to ask yourself

Okay, what's the skill they lack? Let's get really precise. Let's say exactly what it is. What are they not doing or what are they doing? What do we want them to start doing or what do we want them to stop doing? And then we want to give them that feedback and tell them either what we'd like them to stop or to start and then see if it changes. I think that's pretty baseline for trying to change somebody when they have a skill deficit. Now, the problem comes in when somebody doesn't have the will.

Okay, when you have performance issues that you're looking to let somebody go from, honestly, somebody not being a performer is not as concerning to me as them not having the will. Most people, if they are underperforming, I tell them what they need to stop or start doing, they can turn it around. I've seen that so many times, as long as you're really clear on what they need to do or not do. Now, where I've seen it not turn around is when somebody doesn't have the desire. Somebody doesn't have the will.

Somebody doesn't have the motivation, whatever you want to call it. And usually that comes from something. It's usually people don't have the desire to succeed at their job because they are getting more reinforcement elsewhere. Maybe it's a boyfriend at home and maybe he pays for all their shit. Maybe it's they have another job or they have a side gig. Maybe it's they grew up with a lot of money and they don't have a lot of motivation. Maybe it's they grew up with no money and have a lot of motivation. You know, it could be whatever it could be.

That is one that if I give someone all the tools, I probably identify what skill they're missing. I tell them and there's no improvement because they're not putting the inputs in. That's when I decide, you know what? That's not acceptable to me. I refuse to put in more to somebody than they put into themselves. Once somebody's been made aware that they are lacking a skill, if they're not busting their ass to fix it, that's when I'm like, you know what? I can't want it more for you.

And I will tell you guys, like, I get caught in this sometimes where I'm like,

I want it so badly for someone that I have the tendency in the past to coddle people. And I have to just catch myself immediately being like, don't coddle. I'm like, well, I can help. I can help them get better. And it's like, but that's not my fucking job. That's really how I think through these issues when it comes to culture and performance and how I contextualize them to decide, am I going to fire this person or am I going to coach this person? And so you really have to factor in a couple of things. Is it worth the time?

Is it something you can teach? And is this the best thing for the rest of the team? Right? Because another factor that you have to consider is what does the rest of the team think of you and think of this person with this situation existing? How you handle these situations is what builds the culture of your company. And so if you tolerate mediocrity for too long, unfortunately, other teammates are going to lose respect for you.

So one thing that I have to constantly remember with either of these routes, if I'm going to try and coach somebody up before I let them go, is how long can I tolerate their mediocrity before I lose respect from the team, before they lose respect from the team, and they have irreparably damaged their reputation. If somebody has publicly underperformed or publicly demonstrated that they are not a culture fit, I will tell you this, it is a lot harder to get back my trust than it is the entire team's.

The team doesn't have the context, the team doesn't have the relationship, the team doesn't have the perspective, and the team doesn't have the fucking patience. Because they're out there busting their ass, you know, being great examples of the culture, thinking, "Well, what the fuck are you still doing here?" And so though that is like not the job of the team, you have to take that into consideration. Because you have to remember, like, all eyes on you. Heard through a megaphone, seen through a microscope. Everything you do, how you handle these situations, is also going to say something to the rest of the team.

Now, I know that was a lot, but I really wanted to give you guys a little bit more insight into how I think through these situations because they're not one dimensional. There's so many facets to them. At the end of the day, I want to end it with one thing. If you don't like somebody in your company, that is also reason enough to not have them there. Because at the end of the day, if you build a company of people that you just don't like talking to,

then it's going to make it really hard for the best resource in the company to succeed, which is you. The question that's like a catch-all for me when I'm talking through these situations with people is I always end up being like, does this person make it easier or harder for you to work? And then they're like, holy shit, they make it harder. All right, well, that's not good because you're the number one worker in the company. And so sometimes it can be as simple as that.

With that, I hope that this was a good mental frame for you guys. I hope you have a good rest of your day, walk, run, lift, whatever it might be. And I will catch you on the next one.