Nation of Beancounters

The three types of people you should fire immediately – and why you shouldn’t

Posted in Imperfect Information Problem, The World Is Complicated by Navin Kumar on February 21, 2012

Bloomberg Businessweek has an article about what type of people you should fire if you want your company to become more innovative: the victim, who complains incessantly about workloads etc, the non-believers who don’t think an idea will work (because of the boss or market or whatever) and the know-it-all who’s certain that an idea won’t work due to resistance from shareholders etc.

My first observation is that, in a narrow sense, they’re right: if you have a good, workable idea and a reasonable management style, these kind of people will weigh down the team. The success of an venture is (at least partly) based on whether employees put in the work needed. Whether I put in the work is based on whether I think the venture will succeed or not. I can’t be supervised all the time and supervision is useless when it comes to producing good ideas. If ideas get shot down or if someone keeps talking about the inevitable failure of the project I’m working on or if I think the others in my team aren’t putting in the effort needed to make the project successful, I’ll cut down on the effort I put in – what’s the point? It’ll fail anyway. Other employees, seeing this, do the same. Thus we have, at worst, a self-fulfilling prophesy.

The second is that in a broader sense, they’re wrong: you don’t know if your idea is good or management style is reasonable. If you are actually overworking your employees, you need to know before they start secretly sending out resumes. If there are regulatory hurdles etc to jump over, you need to know how much it’ll cost to jump over them before you sink half the re-invested annual profits into a project  – if they’re too large, you’re better off putting your money elsewhere. If customers will hate the idea, you need to cancel if before you lose face – and customers (Qwikster, anyone?) If your idea stinks, you simply need to know.

And how do you know? Your employees tell you! Or atleast they should. In theory, you should keep (and reward) anyone who gives you honest feedback but fire anyone who persistently whines about a normal workload or expresses pessimism unnecessarily. But, in practice, it’s very hard to tell which is which: how do you know what’s “normal” or “necessary”. The “type” of people that the authors talk about are caricatures. If you consistently fire everyone who does these things, you’ll breed a culture of yes-men. It seems better to lean away from this advice, unless you have superhuman judgement.

Imperfect information is everywhere. It’s a bigger problem than people realize.

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