In “Secrets of a CEO Coach," Brian Grey listed the five topics that come up most often with founders seeking his advice. The first two are fundraising and business strategy. The last three: people, people, people.
Managing people is difficult no matter the size of the company or industry. It can be especially thorny for founders of technology startups because a) they often lack management experience, having come from a technical/product background and b) a poor performer can have an outsized impact on young company’s trajectory.
With that in mind, we’re summarizing the management advice we learned from a true master in the craft and often pass onto our portfolio companies.
We had the opportunity to work alongside legendary tech executive Farzad “Zod” Nazem while we both worked at Yahoo! Zod served as the company’s chief technology officer and was among the best in the business at developing leaders within an organization.
During one particularly memorable engineering managers meeting, Zod outlined what became known around the office as “Zod’s Axioms”—rules to live by when running a startup. Our former colleague Eric Boyd summarized them in a blog post many years ago. We’re putting our own take on them here, focusing on the ones about managing a team.
Rule 1: People don’t change
Inexperienced managers can find themselves spending an inordinate amount of time focused on employees who, for whatever reason, are not meeting expectations.
It’s important to keep in mind that some people will be a good fit for your organization’s unique culture, and some will not. Part of your job as a manager is to identify the mismatches as early as possible, make adjustments—and move on.
It often comes down to a binary decision: Transition an employee into a new role that allows them to flourish or cut them loose.
Firing, though, is unpleasant and can feel harsh. A manager might feel personally responsible for an employee’s success—If an employee is failing, I am failing, they tell themselves. Or they worry about the impact of operating without a key position filled—What if we fall behind? So go for a middle option: keeping the employee in the current role but with a performance improvement plan in place.
If you’re stuck in this management mindset, consider:
- Your job as CEO includes hiring and firing—this is the job you signed up for and your employees expect you to do. Your number one role is to build a high performing team.
- The impact a poor performer can have on your team’s morale and productivity.
- If you are distracted by poor performers, you are taking time away from focusing on your stars.
- How precious time is at this stage in your company. Can you really afford to wait six months to see how the personal improvement plan pans out?
- It’s best for everyone involved—the company, your team and the employee in question—for an employee to find a role that fits them best, even if it’s not in your organization.
While at Yahoo!, Ash had a brilliant engineer on his team who was a lone wolf. He simply did not play well with others. Ash carved out a role that allowed the employee to flourish in isolation without impacting the rest of the team. He stayed true to Rule 1—people don’t change—and kept a star employee.
Rule 2: People can learn to be better actors
The next two rules are natural extensions of the first. People don’t change—but they can learn to be better actors.
This is the problem with personal improvement plans. If you talk with an employee about their performance, they will undoubtedly improve. A disorganized person can learn to be better organized. A lone wolf can learn to interact with others. A hot-head can learn to calm down.
There is a catch—read on.
Rule 3: Under stress, people revert to their true selves
The poor performer will revert back to their old ways sooner or later—and often it’s when you need them at their best.
Under stress, a disorganized employee will revert to bad habits; a lone wolf will scurry back to their isolated den; and hot-head will heat back up.
If you’ve failed to properly deal with the problem, you’ve wasted valuable time only to end up right where you started.
Rule 4: Don’t pass your poor performers to your neighbor
It’s a common practice in larger companies for managers to avoid firing employees by passing them onto other departments. As your startup grows and this becomes an option, remember this is always a bad idea. If you have a poor performer on your team, you are responsible for fixing the problem—either by finding them a new role or firing them. If the new role happens to fall under a new manager, then this becomes more of a team effort.
Rule 5: Spend all of your time removing roadblocks from your stars.
Managers typically spend far too much time thinking about underperformers and too little time thinking about top performers. The best managers flip this equation: They focus on their stars.
Identify your stars and obsess over removing every possible roadblock to their performance. It’s a simple concept that’s confoundingly difficult to put into practice, especially for first-time managers.
There is good news: Employees will tell you the things that are in the way. You simply have to ask and stay plugged in.
Maybe it’s resources—they don’t have the right computer or office setting to do their best work. Perhaps it’s structural—other departments take too long to make decisions, slowing them down. It could be more internal—they’re stuck on a decision and need help thinking it through. Whatever it is, it’s your job as a manager to identify what’s in the way of your stars and remove the roadblocks.
By shifting your focus to your stars, you can have a much greater impact on your company’s bottom line than you would by obsessing over underperformers. With roadblocks removed, a 5X employee can become a 10X employee. History tells us that an underperformer will, at best, become an average performer.
The best part: Once you put this concept into practice, it becomes amazingly easy to follow.
While Zod’s axioms may strike some as overly blunt and harsh, they have stood the test of time.
Keep in mind that these axioms can all be applied in a compassionate way. There is a compassionate way to fire people, out of a sincere desire to do what’s best for the company and the employee in question.
Everyone deserves a chance to thrive in an environment that best suits them. Give your employees that chance, even if it means ripping out a few arm hairs in the process.
About the Authors
Ash Patel and Mike Marquez are co-founders of Morado Venture Partners, a seed venture capital firm dedicated to capturing investment opportunities in emerging technologies and data-fueled businesses.