Jul 252015

hire-and-fireMaking decisions is part of everyday life; blue socks or black, flavored creamer or plain.  We make thousands of decisions each day, most without really thinking about them.  The same is true in business.  If you are a leader at your company, then you are making thousands of decisions each day about not only mundane things, but extraordinary things that determine your company’s future.  Things like hiring and firing, strategic direction and planning, marketing decisions, and whether or not to invest money in a project with a less-than-perfect chance of success.

If you think that none of your decisions are hard, then you are either in denial or you are not in a position of leadership.  No business runs itself.  As a CEO (or other leadership role) you have no excuses, only responsibility.  You are where the buck stops, and if the bucks stop, you’re done.  Every decision you make should be focused on what it does for the company, the staff, the customer, and the world, and you get weigh the benefits to each category and decide what the best path forward is.

One scenario that I advise people to consider is hiring their first full-time sales person.  My advice is always to hire slowly and fire quickly.  Hiring someone will always take a while to recoup the costs (in terms of cash and time) that it takes to hire them.  If you cannot find a perfect person, don’t just hire anyone; try to wait for that perfect person.  It can be a tough decision to make, especially in sales.  While hiring a full-time sales person might sound like it will boost profits, it will only do so if they can bring in more in revenue than they incur in expenses, and you always have to watch your cash flow or you’re out of business.  Take your time and hire slowly, waiting for that perfect sales person to come along.

Once they do come along, always be second-guessing if this was the right person or not.  Now is not the time to make friends or hope they invite you to their backyard BBQ.  You need to make sure they know what is expected of them (quotas, gross-profit, etc), but you cannot afford to have them be a drain on your company.  If they cost you $50,000 a year in total cost (expenses, salary, taxes, etc) then it’s not enough for them to just bring in $60,000 per year.  It should be more like $200,000 per year or else you should fire them and find someone else who can do the job better.  Your number may vary, but the point is that you do not have the resources to waste on a mediocre performer.  You need A class people performing at their peak, not B class people performing above average.

Hire slowly, waiting for that perfect person to come along.  Fire quickly, as soon as you find out that they are not working out as planned.  It may be a chore to go through the hiring process all over again, but making the tough decisions now will pay off in the long-term.  Just remember to try to learn something from every decision that doesn’t go as planned.  Eventually, you may be able to hire someone who can make some of the tough decisions for you!