When you find a jerk in your company, fire them, even if they're a customer

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Companies tend to fire employees who are jerks ahead of or before incompetents.  People who are jerks are just easier to fire because there is little opposition to firing them.  Incompetents might be nice enough, regardless of competence, to have supporters.  Human nature influences the manager to make popular decisions which puts jerks out the door ahead of incompetents.

Maybe that isn't the best approach, but certainly worse, than not firing at all related to workplace effectiveness.   That said, I have been continually impressed throughout my career at the positive impact on employee morale of the terminations of jerks or incompetents.   Letting people go makes the real contributors know that there is a conscious management.  Management that is aware and concerned about recognizing performance.  Or the lack there of.

So companies tend to fire the jerks in their employee bases.  But that isn't the only place companies encounter jerks.   There are customers who are jerks.  There I said it and its true.

But, why then, won't most companies fire jerks or anyone for that matter from their customer base.  Can a customer be incompetent?  Can a customer be really be a jerk?

Does it matter? Occasionally. I learned that a customer was, to be candid, a bit of a jerk.  In the early 90s I was running a software company.  In those days pre-bandwidth days software upgrades and improvements weren’t down-loadable.  (But I’m not old – I’m experienced.)  We developed a major upgrade to our product and improved major rather than minor functionality.  Yet we didn’t feel we should charge for these upgrades, especially since we had another upcoming major upgrade already in the works. 

Sensitive to creating the perception of nickel and diming customers for every modification, we made a strategic decision to provide this upgrade for free and charge for the next.  At the same time we weren’t running a charity.  We decided to provide the upgrade for free but to charge $4.99 for a CD; the cost covered disc production, packaging, and shipping, and also ensured only the customers who actually wanted the upgrade would order it.  (Why produce and ship discs customers didn’t want?) 

He didn’t think it was free.  “$4.99 is not free!” he shouted.  He didn’t want to spend $4.99 for something we said was free, and he pushed back hard. Keep in mind he had 700 users.  The original software sold for $3 per seat, so he was already a $2,100 customer.  He was a valuable customer.  The $4.99 was irrelevant; I told him we would ship the CD at no charge, and I apologized for any misunderstanding. I hung up the phone and sat back.  His stand, however “principled” it might have been (to him), seemed a little unreasonable.  I struggled to see why spending what amounted to less than $.10 per user for a major improvement was unreasonable.  So I did some research.  I tracked his path with us:  His calls, his messages, his correspondence, his relationships with our employees… and I found the trail of a person who wasn’t really satisfied with anyone or anything – ever. 

Those customers exist. Every business has customers that cannot and will not be satisfied.  And sometimes you’ll need to sum up the courage to fire them, just like you would an under-performing employee or any other jerk.  Some customers are simply too expensive and too problematic to service.  The key is to trust yourself and know when to stand on your convictions.  When you find people problems, and you will find them, even if you don’t take all the complaint calls, you must act on those problems. 

When I talk to CEOs – especially CEOs of startups – I often ask, “What are some of your major regrets in running the business?” Almost always the answer is, “You know… I had this guy, I was thinking about firing him, and I worried about it and struggled with it for a long time… and months later I finally fired him.  The day after I thought, ‘Jeez… why didn’t I do take care of that months ago? I wish I had fired him sooner."

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Their major regret was not acting on employee suspicions as quickly as they should.  They had nagging doubt, nagging questions, nagging indecision… and didn’t act.  Yet almost never did they feel their initial suspicions and inclinations were wrong.  Start ups and small businesses need every employee to work well together, work well within your company culture, and support your goals and vision. 

Start ups and small businesses don’t need jerks. To build that kind of company, you often must let people go – whether employee or customer -- sooner rather than later. 

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Comments

[james]

Good post. Do you think this also applies to possibly firing an investor (angel/VC)? Probably harder since you have taken their money and are bound together, but many entrepreneurs take investment capital prematurely without really knowing who the investor is and what they have gotten into.

[Jud]

Enjoyed the post... and it reminded me of our experience (at a software company) of firing a large but abusive customer. They were never satisfied and had churned hours of support and management time. Our support team loved the decision... it was a clear demonstration to them that senior management understood and appreciated their challenges. And, for the next critical situation for the next customer, they were that much more willing to do whatever it took to solve the problem.