There Is No Such Thing as Firing Someone

Packard’s Law and the Keeper Test: Knowing When It Is Time to Make a Change

Here’s the deal. I want to talk about letting people go and what firing or termination really means. Over the years, I have had to make some really hard decisions with some really cool people. I do not like having to make those decisions, and having guides that can help you through them has been a big thing for me.

Short answer: Letting someone go isn’t really firing them. It’s moving them to a place where they fit and can be happy. Before you decide, use three tests: the Netflix keeper test (would you fight to keep them if they were leaving?), Jim Collins’ key seats question (are the right people in at least 90 percent of your key seats?), and the People Analyzer from Traction (score them on your core values).

Packard’s Law

Packard’s Law, as Jim Collins named it after David Packard, says that no company can grow revenues consistently faster than its ability to get enough of the right people to implement that growth and still become a great company. I think that is spot on. So how do you know whether you have enough of the right people? Here are three tools I use.

The Keeper Test

In the book No Rules Rules, by Reed Hastings and Erin Meyer, which is about Netflix, there is what is called the keeper test. If a team member was leaving for a similar role at another company, would the manager try to keep them?

I really like that, because a lot of times we work from scarcity and say, what if, what if, what if. The real question is simpler. If they were leaving, would you try to keep them? If a person on your team were to quit tomorrow, would you try to change their mind, or would you accept their resignation, perhaps with a little relief? If the latter, you should give them a severance package now and look for a star, someone you would fight to keep.

The purpose of this is to increase your talent density. Any team or organization has to focus on making sure its talent density is increasing. We are not just here to keep good employees. We are here to always have the best employees and have a high-performance team.

On a construction project, this plays out every day between superintendents, PMs, and foremen. Before holding someone accountable for a missed commitment or poor result, the first step should be coaching: make sure the expectation is clear, the person has been properly trained, and they have what they need to succeed. Once those pieces are in place, leaders can use the Ladder of Accountability to determine the appropriate next step when performance still falls short.

The Key Seat Evaluation

In Beyond Entrepreneurship 2.0, by Jim Collins and Bill Lazier, he talks about tracking the number one metric, which is the percentage of key seats on the bus filled with the right people for those seats. Stop and think about what percentage of your key seats are filled with the right people. If your answer is less than ninety percent, you have just identified your number one priority.

Here are the questions he uses.

• Ask whether you are beginning to lose other people by keeping this person in this seat.
• Ask whether you have a values problem, a will problem, or a skills problem.
• Ask what the person’s relationship is to the window and the mirror, meaning whether they look at themselves when problems arise or look out the window and blame other people.
• Ask whether the person sees work as a job or as a responsibility.
• Ask whether your confidence in this person has gone up or down in the past year.
• Ask whether you have a bus problem or a seat problem.
• Ask how you would feel if this person quit.

The People Analyzer

The third tool comes from the book Traction, by Gino Wickman and it is called the People Analyzer. You take your core values and score each person on a plus, a plus/minus, or a minus. A plus means they exhibit the core value. A plus/minus means they sometimes exhibit it. A minus means they do not exhibit it. With about five core values, the person should have no minuses, no more than a couple of plus/minuses, and the rest pluses.

Why Protecting the Culture Matters

Those are some key ways to know when it is time to say goodbye to somebody. The reason you would do it is that you are protecting the culture. Our company follows pretty strictly the No Rules Rules Netflix culture. If you have gone through that coaching and there has been some due diligence, ask yourself the keeper question.

There Is No Such Thing as Firing Somebody

Here is where I get a little unusual. One time I had to do this, and it was very difficult, and I prayed about it. I do not know whether the answer I received was just for me at that time or whether it is an eternal truth, but it gave me a different perspective. The answer, or the feeling, was that there is no such thing as firing somebody.

There are many great companies out there in this world. When somebody is not a cultural fit, or when it is not working, it is really about repositioning them to a place where they can fit and where they will be happy. If you look at it that way, it is a positive thing.

I have also told you before that when you separate from somebody, you usually find out it was something they agreed to. They say, yes, I am glad this happened, I was miserable too, I am glad you made that tough decision. Then they end up relocating into a better spot.

Right People, Right Seats, Right Bus

What are we doing this for? It is being done out of respect. It is being done so we can get people in the right seats and on the right bus. There are so many buses out there, and ours is not the only one. If it were the only bus, you might feel guilty about kicking somebody off. In our current environment, that is just not the case. Most of the time, people say, wow, this new bus is a whole lot better. I fit here. These are my kind of people. At the end of the day, you are doing people a favor.

The number one metric in a company is the right people in the right seats. Sometimes people need to be let go, and it is very, very difficult. Instead of looping on it, go through the tests.

If your project needs superintendent coaching, project support, or leadership development, Elevate Construction can help your field teams stabilize, schedule, and flow.

So here is the challenge. Go through the keeper test, the key seat evaluation, and the people analyzer. You can use one of the three or all three.

Bottom line: It’s being done out of respect.

On we go.

FAQ

What is Packard’s Law?

No company can grow revenues consistently faster than its ability to get enough of the right people to implement that growth and still become a great company.

What is the keeper test?

If a team member were leaving for a similar role at another company, would the manager try to keep them? If the answer is no, you should give them a severance package now and look for a star, someone you would fight to keep.

What is the number one metric Jim Collins describes?

The percentage of key seats on the bus filled with the right people for those seats. If it is less than ninety percent, that is your number one priority.

How does Jason reframe letting someone go?

As repositioning them to a place where they can fit and be happy, done out of respect, so that people end up in the right seats on the right bus.