How to avoid having to fire your best employees

Managers need managers.
Managers need managers.
Image: AP Photo/Jack Plunkett
We may earn a commission from links on this page.

In his recent New York Times musings about the struggles of small business ownership, suburban Philadelphia furniture manufacturer Paul Downs described his firing of an employee who had been with him for 20 years. That provoked a great deal of criticism from readers and fellow business owners, to which Downs responded in a new column (paywall). His staffing troubles are a reminder that, even in the smallest of businesses, new managers need to be well managed themselves.

Downs spent years running a tight ship with a only a handful of employees, but when he more than doubled his staff recently, he turned to “The Veteran” —a skilled, efficient and “utterly reliable” longtime employee—to help manage the growth spurt. But as it turned out, the Veteran wasn’t a natural manager. He was a craftsman who turned out to be an ineffective hirer, communicator ,and ideas generator. And when he failed in his new role, he bristled at returning to his old one and ultimately had to be let go. So where did Downs go wrong?

The move may have been justified, but was nonetheless poorly executed, as commenters have pointed out. By better defining his employee’s role, and giving more frequent feedback with a path to improvement, Downs may have salvaged his valuable employee.

Downs acknowledges this, but points out that building a management structure from scratch isn’t easy.

Those of you who have started a company from scratch share my experience: On the day you open your doors, you start with nothing. You make it up as you go. If you are lucky enough to start with previous experience as an employee or manager, you have a head start. If you have outside investors, or a board, you have a leg up. Many companies, including my own, are started with none of those resources.

Based on Downs’s experience, here are some tips for small business owners to avoid the obvious pitfalls:

Not all good workers make good managers. Indiscriminately promoting good individual workers to management positions is a rookie move that Justin Rosenstein, the CEO of productivity software company Asana, argues devalues great individual work and leads to poor management. What’s more, reversing course often alienates the worker.

Build a management structure early. For a small business or startup, just getting products to customers takes ample time and energy. In this context, performance reviews seemed time-consuming and draining to Downs and so ultimately fell by the wayside. As a result, the employee was left flailing.

Employees need more feedback than an annual review. By the time Downs discovered the worker’s dissatisfaction, it was too late. Without opportunities to improve, his work just got worse. Workers are more likely to improve with clear, frequent communication about expectations and goals.