Don’t Roll out the Red Carpet on the Way out the Door

Posted on Nov 16, 2009 | 65 comments


This is part of my Startup Advice series.

red carpetBefore I started my first company in 1999 I worked for Andersen Consulting (now Accenture).  One of the things I noticed was that when really talented people – The “A players” – wanted to quit, the firm would quickly scramble to try and keep that person from resigning.  Suddenly it was star treatment and all sorts of promises about the future.

In my observation this seldom worked.  When you’ve reached a boiling point where you feel mistreated or under-appreciated you tend to leave regardless of the newly created incentives.  You develop a cynicism that the future will be better.  So the efforts by Andersen Consulting amounted to “rolling out the red carpet when the employee was on the way out the door.”  Many employees feel that they aren’t listened too, aren’t challenged or aren’t recognized for their hard work.

I always wonder why Andersen didn’t try to do more to over compensate its best performers.  I think they were always afraid of upsetting the masses.  There was a saying at Accenture (that everybody knew), which was, “The A players go, the B players stay and the C players get asked to leave.”  If you’re still at Accenture, don’t worry, I’m sure you’re the exception to the rule ;-)

So I’ve always had this in mind with me at startups.  I’ve always tried to take the temperature of employees and get in front of what they’re thinking.  By doing this I hope to preempt the angst if they don’t feel validated for their work.  I’ll talk in a separate post about dealing with B or C players, the rest of this post focuses on your star performers.

One example was Ryan Lissack.  Ryan was the most talented technologist we had hired at BuildOnline.  Not only because he was sharp technically but also because he was good at getting shit done.  We hired Ryan at a really young age and without a tremendous amount of prior experience.  We had a strategy of hiring people really young because we couldn’t afford to hire too many senior people.  From early on I could tell that Ryan was going to succeed within our company.

We hit the first snag when the our then lead architect felt threatened by Ryan.  The lead architect was blocking new ideas.  Ryan was junior and didn’t want to tell me but I was able to pick up on it by listening.  I had to make a choice.  Ryan was much more talented but less experienced.  But I knew that paving over the problem with a few extra bucks wasn’t going to solve the problem.  We chose to move Ryan to be the peer of the lead architect.  Within a few months the lead architect left.  We were fine with it – I didn’t want to lose Ryan.

Every year our company progressed we tried to give Ryan the upper tier of our annual pay increases.  Admittedly annual pay increases weren’t as much as we would have wanted because these were the lean post dot com days but we at least tried to have Ryan top the range.  One year I gave Ryan our maximum percentage (which I think was 7%) but Ryan wasn’t happy.  He felt that he was performing at a higher level and deserved to be compensated based on his level rather than just getting an annual increase.  I spoke about it with my COO, Stuart Lander, and we agreed that improving the offer was the right thing to do.  Ryan was talented enough that we wanted to exceed his expectations – not meet them.

We decided to give Ryan more than he had even asked for as a show of goodwill.  It really only amounted to a few extra thousand a year but was hugely symbolic.  Soon after he was promoted to Senior Architect, our highest role without being CTO.  Ryan was in his mid twenties and like many people that age he wanted to see the world.  He told me he wanted to take a 1-year sabbatical and travel in the US.  I knew that meant he wouldn’t come back.

So we decided to sponsor Ryan to work out of the US in San Francisco.  We told him we’d file all the legal papers, pay for his move and normalize his salary with San Francisco.  Ryan was a very trusted resource so we knew he’d work hard and be responsible in spite of location.  Ryan accepted.  It was a very strange process for me to accept transferring our most senior technologist to the US where we only had a small presence.   But we did it and he stayed loyal to us for years and provided significant value despite his location.

When we started our next company, Koral, Ryan was a co-founder.  When we were acquried by Salesforce.com he went on to be the team technical lead and has steadily performed well there moving up in his role and responsibilities.

Ryan is now in his 30’s (old fart).  I think we started working together in 2003 when he was new in the UK from South Africa.  We continually tried to roll out the red carpet for him inside our company and I’d do it again if I ever get the chance to work with him again.

In life you only come across A++ players occasionally.  In every company I think 4-5 people really make most of the difference in your success.  Everybody employed at BuildOnline and Koral was important to me – don’t get me wrong – but 4-5 were the “core.”  Ryan was certainly one of them.

My lesson: don’t take your superstars for granted.  Find ways to Roll out the Red Carpet while they’re still in the castle.

  • http://bothsidesofthetable.com msuster

    100% agree. And no prizes for guessing how important we saw you when you joined! You can ask Ari my views when we discussed it.

  • http://bothsidesofthetable.com msuster

    Too true. Although I do have one situation where we talked a guy back from the ledge and went on to build a wonderful working relationship. But it's the exception rather than the rule. When you quit make it real – no head fakes!

  • http://bothsidesofthetable.com msuster

    And Ryan's current employer wrote me a private message after this post saying how well he's performing there. They realize they got a gem.

  • http://bothsidesofthetable.com msuster

    Ha ha ha. I was wondering whether you'd see this post! Run. You've got A inside you – I'm sure of it.

  • IR

    This is a really cool article. Based on the treatment Ryan got I think he was motivated by the way you recognized his talents and show him that you cared about his concerns. It takes a good employer to recognize the A players and take immediate action to nurture and mentor them. Thanks for the great insight in this article.
    IR.

  • brianli

    Mark, this post is screaming at me to comment! The red carpet is what I’m currently faced with. Most recently, I’ve been summoned by my lead to go meet in NY and “talk” based on what I shared as likes/dislikes regarding my time with the company. But, I’m 100% with you on this, “A players go”. ….i’m working on it!

    To further expand on “A players”, the really top-notch are those who also inspire, pull-up, transform and grow “B players”. They can find ways to bring out the best in people.

  • http://bothsidesofthetable.com msuster

    I very fine line, indeed

  • http://bothsidesofthetable.com msuster

    Agreed. But as LIAD said above, a fine line between over-compensating and being taken for a ride. The true skills of an entrepreneur is knowing who is worth bending for.

  • http://bothsidesofthetable.com msuster

    100% agree. And no prizes for guessing how important we saw you when you joined! You can ask Ari my views when we discussed it.

  • http://bothsidesofthetable.com msuster

    Too true. Although I do have one situation where we talked a guy back from the ledge and went on to build a wonderful working relationship. But it's the exception rather than the rule. When you quit make it real – no head fakes!

  • http://bothsidesofthetable.com msuster

    And Ryan's current employer wrote me a private message after this post saying how well he's performing there. They realize they got a gem.

  • http://bothsidesofthetable.com msuster

    Ha ha ha. I was wondering whether you'd see this post! Run. You've got A inside you – I'm sure of it.

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  • rhatta

    Mark, this might be old news to you, but check out the internal culture presentation from Netflix found at http://www.techcrunch.com/2009/08/05/other-comp….

    Relevant to this post, they assess compensation and termination in the following scenario: if an employee accepted another offer and you aren't willing to fight to keep them, you should let them go today; if you would pay them more to stay, give them the raise now. They go into deeper detail, but the point is the same. Throwing cash or incentives at people after they've decided to leave is too late.

  • Rhatta

    Mark, this might be old news to you, but check out the internal culture presentation from Netflix found at http://www.techcrunch.com/2009/08/05/other-comp….

    Relevant to this post, they assess compensation and termination in the following scenario: if an employee accepted another offer and you aren't willing to fight to keep them, you should let them go today; if you would pay them more to stay, give them the raise now. They go into deeper detail, but the point is the same. Throwing cash or incentives at people after they've decided to leave is too late.

  • Rhatta

    Mark, this might be old news to you, but check out the internal culture presentation from Netflix found at http://www.techcrunch.com/2009/08/05/other-comp….

    Relevant to this post, they assess compensation and termination in the following scenario: if an employee accepted another offer and you aren't willing to fight to keep them, you should let them go today; if you would pay them more to stay, give them the raise now. They go into deeper detail, but the point is the same. Throwing cash or incentives at people after they've decided to leave is too late.

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