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Sometimes You Have To Fire The Star Executive That Made Your Company A Success

Mar 5, 2013, 18:45 IST

Andreessen Horowitz partner Ben Horowitz is always coming out with useful blog posts about how to operate a company.

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(His bona fides: He was the CEO of Opsware when it sold to HP for $1.7 billion.)

His latest is about things a CEO can do to keep star executives performing like star executives.

The whole post is worth reading, but the surprise ending is great.

Horowitz says that sometimes, you have to let a star executives go – even if he or she was one of the key people who helped you grow your startup into a successful company.

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He explains:

When I used to review executives, I would tell them: “You are doing a great job at your current job, but the plan says that we will have twice as many employees next year as we have right now. Therefore, you will have a new and very different job and I will have to re-evaluate you on that job. If it makes you feel better, that rule goes for everyone on the team including me.”

In giving this kind of direction, it’s important to point out to the executive that when the company doubles in size, she has a new job. This means that doing things that made her successful in her old job will not necessarily translate to success in the new job. In fact, the No. 1 way that executives fail is by continuing to do their old job rather than moving on to their new job.

Finally, what about being loyal to the team that got you here? If your current executive team helped you 10X your company, how can you dismiss them when they fall behind in running the behemoth they created? The answer is that your loyalty must go to your employees—the people who report to your executives. Your engineers, marketing people, sales people, finance and HR people who are doing the work. You owe them a world-class management team. That’s the priority.

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