What is the best way to deal with an underperforming but very popular and 'culturally important' employee in a 50-person startup? originally appeared on Quora - the place to gain and share knowledge, empowering people to learn from others and better understand the world.
Answer by Terry Lambert, Former Google Sr. Software Engineer and Small Business Manager, on Quora:
50 people is right at one of a companies largest cultural pain points.
Other pain points occur at about 10 employees, and again at about 125 employees.
This all comes back to The Magical Number Seven, Plus or Minus Two.
This is the number at which the initial management can no longer micromanage everyone, and has to start delegating.
50 is where the people that were delegated to by the initial manager, now have to start delegating as well. It's where you grow from an organization with a leader and one layer of management, into a leader and two layers of management.
This is also the point where the venture capitalists in a technical company will start to want to bring in their own management team: so-called "adult supervision".
The problem is that the people necessary to management to take a company from nothing to 10 employees are often not the people necessary to take the company to 50 employees.
And the people necessary to take the company to 50 employees, are often not the people to take it to 125 (5 * 5 * 5)... or, if you are really lucky with your hires, 343 (7 * 7 * 7) employees... or, if god is on your side, 729 (9 * 9 * 9).
So you get your startup, it comes up to the point where the initial founder(s) -- and you can think of them as "one manager" -- can no longer manage everything themselves (max: 10) -- and you hire an office manager -- or other professional management.
And then you hit 50.
At each of these points, you have to do something to reduce organizational friction, and you absolutely cannot use the same techniques.
Nor will you be able to reduce this organization friction to zero.
Nor will you be able to hire 100% performers for every single position.
I think you are at the point where you might be able to afford to hire a person to do what this employee actually does for the organization.
If you aren't there yet -- you are right at the knee in the company's growth that you are going to hit it just about any time now.
I think the question is whether you can transition this person into this role, where you admit they are performing well, as a full time thing for them, instead of them doing both that (unassigned) job, and also doing their (currently assigned) official job very poorly.
Either way you lean, there's going to be risks.
You will be handing this person some substantial initial power.
Other people can see that the person is already in the role of some type of HR-related position, and are doing well there. Maybe you call it "CCO" or "Chief Cultural Officer".
You will also be substantially undermining the power they already have.
On the other hand ... you have to be able to strip them of their former role, and make sure that they know that they are not to put their hands in where they have indicated an inability to perform well. This must be crystal clear to them.
Minimally, you move their office (or cubicle, if they don't have an office): new role? New location.
If you can't afford to have this person in the role...
Well, you're going to have to put someone in the role.
Your company is sitting at right around 50 people.
Something is about to give with regard to your ability to directly, rather than indirectly, scale your management structure, if your company is to grow beyond this point.
Important postscript:
Google brought in "adult supervision", in the form of Eric Schmidt, in 2001. This was under the guidance of their venture capitalists, John Doerr and Michael Moritz.
At the time, they had a headcount of about 100 people.
Perhaps it's time your company had "adult supervision" as well.
As noted above -- when you go to two levels of management -- that's typically going to happen between 25 (5 * 5) and 81 (9 * 9) people: the point at where your managers find they have "too many irons in the fire".
Don't wait too long.
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