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://www.linkedin.com/in/rajatsuri rajatsuri

    Great article Mark. This one really hit home.

    Totally agree that 4-5 people make or break a company.

  • http://twitter.com/justyn Justyn Howard

    Thanks for the great post Mark. When a company I was with for 8 years offered me the moon as I was leaving, but wouldn't make reasonable concessions until that point, it was offensive. If you're prepared to offer more, offer it before the tide turns. Especially when 80% of your revenue is coming from just a few. Success is not a democracy.

  • http://twitter.com/ravikannan Ravi Kannan

    Great article. You said it very nicely. I have been the “Ryan” in the past and have hired “Ryan” in my other startups. Cannot agree with you more. Core people have to be taken care of.

    It is unfortunate that when companies start doing well (most of them, exceptions are always there), they tend to forget the “Ryan” amongst them and only when they express their desire to quit, are all the largeese offered. When that happens, you only laugh at the immaturity of the person doing the offer. Also, they tend to come down a notch below on “Ryan's” trust scale. I think this kind of attitude on part of companies comes from the fact that they think by not being pro-active about it, they tend to save some money, which is very short sighted and hurts the company eventually.

  • marklanday

    Mark,
    Excellant post. As an executive recruiter, I agree 100%!

  • Mark's fabulous Wife

    But Mark, exception to every rule. I strongly recall you rolling out a red carpet for an 'A' player on his way out the door, and it actually worked! You got him back. Hint: Foi Gras in Paris

  • http://twitter.com/scyphers C. Scyphers

    Amen! Even in large companies, there is almost always a clear, small group of highly talented people who are key to the success (or failure) of the organization.

    I also agree about trying to keep people once they're leaving. If things get bad enough that the people who work for me are heading for the door and I *didn't* catch it in advance, then I'm better off helping them pack than trying to convince them to stay; if they were going to leave before, they're going to leave later.

    The only exception to that rule (in my mind) are key personnel on a very short term basis. If I have an engineer who is highly trusted by the client and crucial to the success of the project, I'll do what it takes to get them to stay for a few weeks while I'm spinning up the replacement.

  • http://bothsidesofthetable.com msuster

    Especially at your size company ;-)

  • http://bothsidesofthetable.com msuster

    For sure, “success is not a democracy”

  • http://bothsidesofthetable.com msuster

    I think most companies become geared around keeping the masses happy rather than the Ryan's, er, Ravi's ;-)

  • http://bothsidesofthetable.com msuster

    ha ha ha. Yes, I was thinking about that but it didn't conveniently fit my storyline. Doh! Cover blown. Who said you were allowed to read my blog!

  • http://bothsidesofthetable.com msuster

    Yes, you're right. It's true even at larger companies.

  • http://www.madmagz.com Youssef Rahoui

    Great peace of advice, thanks!

  • http://www.linkedin.com/in/rajatsuri rajatsuri

    Great article Mark. This one really hit home.

    Totally agree that 4-5 people make or break a company.

  • http://twitter.com/justyn Justyn Howard

    Haha – this is great!

  • http://twitter.com/Justyn Justyn Howard

    Thanks for the great post Mark. When a company I was with for 8 years offered me the moon as I was leaving, but wouldn't make reasonable concessions until that point, it was offensive. If you're prepared to offer more, offer it before the tide turns. Especially when 80% of your revenue is coming from just a few. Success is not a democracy.

  • http://twitter.com/ravikannan Ravi Kannan

    Great article. You said it very nicely. I have been the “Ryan” in the past and have hired “Ryan” in my other startups. Cannot agree with you more. Core people have to be taken care of.

    It is unfortunate that when companies start doing well (most of them, exceptions are always there), they tend to forget the “Ryan” amongst them and only when they express their desire to quit, are all the largeese offered. When that happens, you only laugh at the immaturity of the person doing the offer. Also, they tend to come down a notch below on “Ryan's” trust scale. I think this kind of attitude on part of companies comes from the fact that they think by not being pro-active about it, they tend to save some money, which is very short sighted and hurts the company eventually.

  • marklanday

    Mark,
    Excellant post. As an executive recruiter, I agree 100%!

  • Mark's fabulous Wife

    But Mark, exception to every rule. I strongly recall you rolling out a red carpet for an 'A' player on his way out the door, and it actually worked! You got him back. Hint: Foi Gras in Paris

  • http://www.cscyphers.com/blog scyphers

    Amen! Even in large companies, there is almost always a clear, small group of highly talented people who are key to the success (or failure) of the organization.

    I also agree about trying to keep people once they're leaving. If things get bad enough that the people who work for me are heading for the door and I *didn't* catch it in advance, then I'm better off helping them pack than trying to convince them to stay; if they were going to leave before, they're going to leave later.

    The only exception to that rule (in my mind) are key personnel on a very short term basis. If I have an engineer who is highly trusted by the client and crucial to the success of the project, I'll do what it takes to get them to stay for a few weeks while I'm spinning up the replacement.

  • http://bothsidesofthetable.com msuster

    Especially at your size company ;-)

  • http://bothsidesofthetable.com msuster

    For sure, “success is not a democracy”

  • http://bothsidesofthetable.com msuster

    I think most companies become geared around keeping the masses happy rather than the Ryan's, er, Ravi's ;-)

  • http://bothsidesofthetable.com msuster

    ha ha ha. Yes, I was thinking about that but it didn't conveniently fit my storyline. Doh! Cover blown. Who said you were allowed to read my blog!

  • http://bothsidesofthetable.com msuster

    Yes, you're right. It's true even at larger companies.

  • http://www.madmagz.com Youssef Rahoui

    Great peace of advice, thanks!

  • http://arnoldwaldstein.com awaldstein

    Mark, instructive, thnx.

    The norm for me, after a gaggle of startups, is that when someone is ready to leave, let them go. The love is already lost and as we all know, “You can't buy it” ;)

    That being said, in startups and in large companies, job one, is always to understand who drives the car and make certain that you don't have a free fall if anyone left. And even when I've gone for funding, if it was obvious that that glue was not one of the founders or well covered equity wise, smart VCs brought it to my attention.

    At the end of the day, people make the product and the company and the brand. Without those players, its a bad day.

  • http://twitter.com/Justyn Justyn Howard

    Haha – this is great!

  • http://bothsidesofthetable.com msuster

    Mostly agree – especially on the need to do succession planning, but …
    - I have talked a guy back from the edge and he made a huge impact on my company's success (as my wife pointed out in the comments above)
    - I still believe that even with succession planning a couple of key guys make all the difference and it's important to know who they are and treat them very well

  • http://arnoldwaldstein.com awaldstein

    Agree Mark and I'm still learning.

    That's why I'm part of your blog community. Adding my experience and thinking to new ways of building companies and doing business.

    Thnx for keeping this site going. Fills a needed gap for company builders.

  • http://twitter.com/L1AD LIAD

    Completely agree.
    I have foun exactly the same with young uber talented developers.

    There is a fine line between exceeding their expectations and bending over backwards to accommodate them, and being taken for a ride and exploited by them because they are aware of your reliance on them and their importance to the business

  • donrainey

    Great post! These people are hard too find and impossible to replace adequately. Why not do everything possible for them. They are the difference makers in the beginning, middle and end of start ups.

  • http://twitter.com/westling Mark Westling

    Great points and a great example. I think an underlying lesson of your example is that there are many ways to motivate people — as you put, much of what you did was “hugely symbolic”.

    This could be yet another topic for you: in what ways can a financially strapped start-up motivate key employees? (Title is an obvious choice but in my experience it's not as simple as it seems.)

  • http://twitter.com/juney Juney Ham

    Great comments here!

    While everyone is motivated by his/her own unique set of needs and wants, I think the symbolic aspect is really important, especially if the employer is as transparent as possible about the situation. Do what you can and be honest about it and it hits home.

    I can't tell you how many times I've seen situations (personally or otherwise) where a symbolic gesture, whether it's “the highest raise in the company”, etc. becomes meaningless when a hush-hush promotion in another department breaks cover. It undermines the value of the company's promise to you. This was at a larger organization, but can apply to any company regardless of size.

    At the end of the day, being honest and open resonates with people. At a start-up you're practically family! Treat 'em as such. ;)

    Awesome post, Mark.

  • http://www.facebook.com/johndelrio johndelrio

    Excellent post! Duly filed away for the future when the scenario arises for me.

    Thank you.

  • http://twitter.com/jasonlk Jason M. Lemkin

    Amen. On a related note, my advice to the A employee: never take the red carpet offer. It will look good on paper, but you will be forever tainted and remembered as someone who was willing to leave, but could be bribed to come back. You'll never be fully trusted. Once you tell your employer you are leaving, you better go. (But, feel free to use the parting offer as a way to get a slightly better offer from your employer to be ;)

  • http://arnoldwaldstein.com awaldstein

    Mark, instructive, thnx.

    The norm for me, after a gaggle of startups, is that when someone is ready to leave, let them go. The love is already lost and as we all know, “You can't buy it” ;)

    That being said, in startups and in large companies, job one, is always to understand who drives the car and make certain that you don't have a free fall if anyone left. And even when I've gone for funding, if it was obvious that that glue was not one of the founders or well covered equity wise, smart VCs brought it to my attention.

    At the end of the day, people make the product and the company and the brand. Without those players, its a bad day.

  • http://david-noel.com David Noël

    That is a great story & post, Mark! Thanks for sharing

  • http://bothsidesofthetable.com msuster

    Mostly agree – especially on the need to do succession planning, but …
    - I have talked a guy back from the edge and he made a huge impact on my company's success (as my wife pointed out in the comments above)
    - I still believe that even with succession planning a couple of key guys make all the difference and it's important to know who they are and treat them very well

  • http://arnoldwaldstein.com awaldstein

    Agree Mark and I'm still learning.

    That's why I'm part of your blog community. Adding my experience and thinking to new ways of building companies and doing business.

    Thnx for keeping this site going. Fills a needed gap for company builders.

  • http://twitter.com/L1AD LIAD

    Completely agree.
    I have found exactly the same with young uber talented developers.

    There is a fine line between exceeding their expectations and bending over backwards to accommodate them, and being taken for a ride and exploited by them because they are aware of your reliance on them and their importance to the business

  • donrainey

    Great post! These people are hard too find and impossible to replace adequately. Why not do everything possible for them. They are the difference makers in the beginning, middle and end of start ups.

  • http://twitter.com/westling Mark Westling

    Great points and a great example. I think an underlying lesson of your example is that there are many ways to motivate people — as you put, much of what you did was “hugely symbolic”.

    This could be yet another topic for you: in what ways can a financially strapped start-up motivate key employees? (Title is an obvious choice but in my experience it's not as simple as it seems.)

  • http://twitter.com/juney Juney Ham

    Great comments here!

    While everyone is motivated by his/her own unique set of needs and wants, I think the symbolic aspect is really important, especially if the employer is as transparent as possible about the situation. Do what you can and be honest about it and it hits home.

    I can't tell you how many times I've seen situations (personally or otherwise) where a symbolic gesture, whether it's “the highest raise in the company”, etc. becomes meaningless when a hush-hush promotion in another department breaks cover. It undermines the value of the company's promise to you. This was at a larger organization, but can apply to any company regardless of size.

    At the end of the day, being honest and open resonates with people. At a start-up you're practically family! Treat 'em as such. ;)

    Awesome post, Mark.

  • http://www.facebook.com/johndelrio johndelrio

    Excellent post! Duly filed away for the future when the scenario arises for me.

    Thank you.

  • 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.

  • http://twitter.com/jasonlk Jason M. Lemkin

    Amen. On a related note, my advice to the A employee: never take the red carpet offer. It will look good on paper, but you will be forever tainted and remembered as someone who was willing to leave, but could be bribed to come back. You'll never be fully trusted. Once you tell your employer you are leaving, you better go. (But, feel free to use the parting offer as a way to get a slightly better offer from your employer to be ;)

  • 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://david-noel.com David Noël

    That is a great story & post, Mark! Thanks for sharing

  • 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.