Several years back, I read about Novell CEO, Ray Noorda’s approach to employee “spring cleaning.” He would say “It’s spring cleaning, whether we need it or not.” Every spring, Novell would lay off 15 percent of their employee base regardless of financial circumstances. I remember thinking this type of approach was too draconian to be effective long-term. How could systematically culling 15% of a team possibly be part of building a highly-effective organizational culture, especially in the context of smaller organizations?
I was reminded of Ray’s approach recently, and it gave me a chance to re-visit his approach. While I still don’t believe Ray’s exact approach is appropriate, I do believe aspects of it can engender a kick-ass, lean, efficient startup culture. In a startup, every member of the team should be expected to produce a positive ROI. Team member surplus should be viewed by all as an unwarranted luxury. In the early stages of any venture, resources are too scarce to accept anything less. However, even the most diligent of teams can find themselves having accumulated a redundant or bad hire. At any time you find your team has accumulated “driftwood” you should be prepared to address the situation, don’t wait for an annual event.[blockquote align=”right” cite=”Dharmesh Shah, Founder HubSpot”]Compromising on culture is mortgaging the future; the interest rate on culture debt is crushingly high[/blockquote]
“The culture of any organization is shaped by the worst behavior the leader is willing to tolerate” Gruenter and Whitaker. If the leaders of an organization are willing to allow less than fully contributing individuals remain part of the team, it will have a negative impact on the organization’s culture. I contend the long-term damage from allowing individuals to essentially camp-out and deteriorate the efficiency of an organization pails in comparison to the short-term pain that results from dealing with the situation. “Compromising on culture is mortgaging the future; the interest rate on culture debt is crushingly high” Dharmesh Shah, Founder HubSpot.
Caution should be taken to avoid overcorrection and short-sidedness. For example, if there is a belief additional workload is forthcoming for an individual in the near term, it may not make sense to make a change due to the recruiting and onboarding costs of bringing on a new individual at a later date. Repositioning of team members should also be evaluated.
These are some of the most difficult calls for leaders to make. The smaller the team, the more family-like and heart-twisting it is to make team changes. I urge a long-term perspective; the short-term pain is worth the long-term benefits to the effectiveness of your organization’s culture. When changes are made, open communication is critical to team acceptance and moving onward and upward.