Making Good Kills -
Stopping Projects, Quitting Jobs, Terminating Employees
and Other Necessary Failures

by Paula Gamonal

The Opportunity

If every project and every product your company turns out is a raging success; every person you hire is perfectly suited, and if your every career move turns out to be golden, you don't need to read this article.

For the rest of us, there is the occasional "kill" that has to be made - ending a project, quitting a job, terminating an employee, dissolving a department or a company, or discontinuing a product or service.

Taking risks is at least a passing nod to the possibility that something may go wrong. Although most of us were raised with a "never give up" attitude and feel it's a failure of sorts to admit a mistake or the need for a change, sometimes knowing when to quit (and redirect your energies to other things) is the key to future successes.

When learning a martial art, (or many other risky sports) a good coach will first teach a student "how to fall." Being able to fall gracefully without hurting yourself is the best foundation on which to begin to take risks. The greatest martial artists performances often involve several falls before an eventual spectacular victory.

The CPA Journal Online indicates that more than 300 U.S. firms go out of business every week. It would be naïve to think you (or your company) are immune to failure. It doesn't have to be a poor decision or mistake on your part- a change in market conditions, the actions of a competitor or inactions of a supplier, the behavior (or lack thereof) by an employee, or any number of factors can create a failure situation.

Businesses, or business people, who can "fall gracefully" learn and adapt quickly, and redeploy their resources in endeavors that have greater chances of success.

The Solution

Go Into Risky Situations with a "Prenuptial Agreement"

Whenever possible, make specific arrangements (as specific as possible given current information) about what will happen if things don't work out.

It's good to go into a new venture with an idea of some possible decision points or "failure points" at which you determine you will not continue; and determine how to go about killing the venture as painlessly as possible.

In formal business plans, informal agreements and collaborations with suppliers and customers, etc., you can usually frame these in a way that retains confidence that things will work out the way you've planned, but outlines a few of the possible situations that might change things for one or more of the parties involved.

Most employee agreements have "separation clauses" or conditions and processes to be followed to make a termination (initiated by the employee or the company) as fair and problem-free as possible.

Having a way to back out of projects, ventures or positions gracefully will preserve options for possible future relationships, or at least prevent some of the worst possible outcomes.

You may want to create a formal document and run it by your lawyer (or legal advisor) depending on the amount of risk you're taking. In many cases, if you're taking out a loan or forming a legal entity, you're required to seek professional help. In smaller, less formal arrangements, a single collaborated document with signatures of both parties might suffice. If in doubt, ask your lawyer.

Don't Let Bad Situations Linger

Most of us were raised with a "never give up" attitude that makes it difficult to kill a project, fire an employee, or walk away from a situation without feeling pangs of guilt.

Some things are worth heroic efforts to keep things going, or, in the best scenario, to turn them around. But unless the potential rewards are great, or there is a matter of principle involved that would shake your core values to abandon; there comes a time when a business situation's drain on your time and energy (and the morale of the people involved!) may be more than it's worth.

If that's the case, it's kinder to resolve it quickly and definitively than to let it slowly succumb to its own inertia.

"I wish they'd just lay me off" said Alan, an dot-com employee that stuck around to "turn off the lights" at a failing company. "At least then I would have had to make an adjustment, get some training, and get my résumé out there. As it is, I stick around forever, the best jobs in the area will be taken by the other folks in the company who saw this coming."

Admit Defeat

The news media's coverage of recent events should be enough incentive to make it clear that trying to hide a "kill" is a very bad idea.

Make sure everyone who should be informed about the decision is given all of the information they need. There's no reason to shout it from the rooftops, but be sure that you're up to your usual (hopefully excellent) standard of communication and availability for questions from the involved parties. A well-written e-mail or memo; a "town hall" style meeting with the employees involved; or a face-to-face discussion with key people involved is usually called for.

Cut Your Losses

Do some homework on who the "kill" will affect, and how to make the change as easy as possible on them.

If the "kill" involves displacement of people, do your best to ensure that they are given as many alternatives as possible.

Wells Fargo has a "retain" program that provides resources and ensures that employees being displaced from one of its departments has a good shot at finding employment somewhere else in the company. The HR department works with the person to arrange for training, relocation, and other details.

The implication is that it's a small world, and the people you're laying off today might be people you will be working with in some capacity in the future. The concept of "good karma" also makes for good business.

If the "kill" involves financial loss, consult a financial professional about the possibilities of writing off the loss on taxes. Investigate the options available to you to finance the loss while putting as little stress as possible on the rest of the organization (or on you personally, if it was your company.

Although many people tend to want to walk away from a loss as quickly as possible to "get on with other things," it pays to do the homework required to tie up loose ends and gracefully resolve as many issues as possible so they won't haunt you later or cost more than you expected.

Don't Rub Salt Into Wounds

Don't dwell on the negative. If someone asks about the failed project, terminated employee, job you quit, or company you dissolved, talk about the positive aspects of it, and keep the negative as simple as possible. "It was a great idea, but the logistics just didn't work out."

If asked for references about an employee you fired, check with the legal requirements in your area. It's usually best to give a minimum amount of information. Most localities require only that you give the dates that the person worked, the job title he held, and whether the separation was voluntary or involuntary.

Volunteering more negative information than necessary is tasteless at best, and may subject you to legal implications at worst.

Move On

There's an old saying that if you fall off a horse, you should get back on as quickly as possible so that the horse (and more importantly, you yourself) don't become so affected by a negative experience that you're afraid of further risk.

Immerse yourself, your department or your company in a fresh direction or a new project as quickly as feasible. Don't rush headlong into the first plausible idea- remember to intelligently mitigate risk as much as possible at the outset (re-read the section on Prenuptial Agreements if necessary) but recognize that avoiding risk altogether is not only not possible, it's also not a good idea. Great rewards come with great risks.

Intelligently managed, of course.

Conclusion

The business world changes rapidly. People and companies should be agile and able to determine appropriate failure points, make "good kills," and quickly recover when conditions make failure inevitable. Refuse to pour time and energy into anything that you're not firmly convinced will work. If something is past that point, assess your options carefully, end the situation gracefully and move on quickly to something you can be passionate and positive about.


Paula Gamonal is the co-host of Ravenwerks, an online community serving managers and executives addressing topics of leadership, teamwork, best practices, customer service, marketing and technology. Paula is also the author of Taming the Dragons- 50 Essays from the Business World. Contact Paula by e-mail: paula@ravenwerks.com and visit ravenwerks.com for more information.

Many more articles in Leading Change in The CEO Refresher Archives

   


Copyright 2002 by Paula Gamonal. All rights reserved.

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