When valuable employees quit/resign

Hi DROdio, I wanted to get your take on how a CEO should handle the case where a valuable employee quits or resigns on good terms. I've been at a number of companies recently where the process has been poorly handled and just leads to uncertainty and stress all around.

As a CEO, how do you ensure that when a valuable employee leaves, they leave in a timely and respectful manner to both them and the team they had worked with?

Thanks for your thoughts!

DROdio:

Hey Jeremia,

This one of the hardest things to deal with as a CEO, which is why it's handled so poorly, so often.

The company -- especially in a startup -- is all the CEO thinks about, night and day. The company is a demanding mistress to the CEO in his or her personal relationships. In the shower, s/he is trying to solve some vexing, impossible problem that nobody's ever solved before. It's unbalanced and it's all-consuming, as I've written about in the past.

So when an employee doesn't share that same level of passion, or finds something else that's more interesting, it can be crushing. As a CEO it's really hard to understand why an employee doesn't have the same commitment. This is especially difficult when the startup is going through its "trough of sorrow" stage, where the rubber hits the road, as famously illustrated by Paul Graham:

And in fact, that's when many employees leave, because that part of the startup lifecycle is really tough.

So I tell you this to give you some background: You have to fully expect a CEO to react poorly, because the CEO takes the loss really personally.

As a startup founder, I've had to deal with this plenty of times, and I've watched other CEOs go through it as well. One thing that helps is practice. Over time you realize that everyone has different priorities. Just because you're living & breathing the startup as the CEO doesn't mean everyone else is. And when an employee leaves, it doesn't automatically mean they regret the time they spent at the startup (although it can mean that). There was a value exchange that took place -- the employee contributed value (especially great employees) and the startup benefited from that. In return, the employee was paid and hopefully learned along the way and made good friends.

So here are some pragmatic tips I'd recommend you try if you feel like you're ready to leave your job:

No surprises: Even worse than leaving is giving little or no notice. Then the company has to scramble to fill the immediate void. Although two weeks notice is standard, give more notice if you're willing to. Give four or even six weeks. The only caveat here is that if the CEO reacts poorly when you give notice, you might find yourself escorted out of the building that very moment. So you have to be ready for that. But hey, if you wanted to go anyways, then that might be OK with you.
Communicate early: Even better than giving ample notice is being communicative about what's making you unhappy in your job. I find that employees very often overestimate their importance to the company (we're all replaceable) but severely underestimate their ability to request change within the organization -- whether it's a change in job roles, or ways to make the job more enjoyable, etc. So communicate those things early. Don't wait until you're so fed up that you're looking around. Empower yourself mentally to create an environment you love and you can thrive in.
Be positive with the other employees: One of the biggest fears a CEO has when a valuable employee leaves is the signal that it sends to the other employees. Some of this is unavoidable. But to the extent you can stay upbeat and positive about the opportunity at the company, the easier the process will be on the CEO and the better s/he will react to it.
Manage the CEO: If your CEO is like most, s/he will take it very personally that you're leaving. Make sure you're clear that this isn't personal. You're not calling his/her baby ugly. This just wasn't the right fit for you moving forward, and you want to find something that excites you. If the company is good at managing employees, they will have an exit interview process with someone who isn't your manager. Be honest in your feedback about why you decided to leave. That feedback is invaluable to a company, and your fellow employees will thank you, because things might change for them.
Be careful what you sign: The company will often try to get you to sign a full release when you leave as a part of your resignation. Don't be in a rush to sign that. The company will probably be deathly afraid that you won't sign that, so use that to your advantage. Make sure you read it. Mention that you want to have your attorney look it over. Having a disgruntled employee is one of the biggest fears companies have. Just make sure you're comfortable with the rights you're giving up.
Keep in touch: Even if the split doesn't go smoothly, do what you can to rekindle the relationship. Breaking up is always hard to do! Just remind yourself that the CEO feels the weight of the world on his or her shoulders -- mouths to feed, employees having babies (more mouths to feed!), impossible problems to solve, dwindling cash positions to manage, investors to deal with (or find). Give it a month or two and say hello again. Chances are the CEO will feel bad about the way he or she acted and reach back out.

Good luck, and let me know how it goes!

Here's a bit more from the CEO's perspective and what the CEO can do:

Don't take it personally: The employee isn't calling your baby ugly.
Focus on knowledge transfer: The employee who's leaving has a lot of valuable institutional knowledge about the company that will be hard or impossible to capture later. Have the employee create a process doc that outlines his or her job duties and how they get done. Screencasts can be great for this.
Be cognizant of how it's affecting the other employees: Make sure they hear from you that the employee is leaving. Some of them will probably have heard it directly from the employee already anyway, but try to be the one who breaks the news. You may want to discuss it with them one-on-one to understand their reaction.
Be proactive about fixing what caused the employee to leave: This is especially important if you start to see a pattern of why the best people are leaving.
Decide if you want to try to keep the employee: Usually, by the time an employee tells you s/he is leaving, it's too late to try to keep him or her. You need to build the well before you have to drink from it: If you haven't established deep relationships with your employees early on, when you find out they're leaving is too late. Once in a while you'll be able to keep an employee who tells you s/he is leaving, but don't count on it -- and even if they tell you they'll stay, it can be awkward afterwards.
What goes around, comes around: The best thing you can do to ensure they go in a respectful manner to both them and the team is to take the long view: There's a very good chance you'll interact with that person again down the road. Send them off in style if you can manage it by having a dinner or drinks on their last day, and say something about how valued they have been, so the other employees can see that you're treating them with respect.