December 5, 2022

small business advice

No Employee Should Ever Be Considered Irreplaceable

Jerry Osteryoung | 5/25/2009
Occasionally, we deal with an entrepreneur whose story is so surreal that it is hard to believe it is true. This column is about one such case.

A very good entrepreneur had a small-equity partner who operated a portion of the business located in another city. Because the entrepreneur could not travel, this minority shareowner was not managed very much outside of his ability to make money, which he did on a continual basis. However, as the entrepreneur discovered, there were recurrent problems with how the partner managed the office, from unnecessarily low pay to ethical lapses.

This shareholder, who actually owned less than 5 percent of the company, thought of himself as a partner rather than as an employee who happened to own stock. I remember one conversation I had with him about this, and he had a hard time accepting the fact that he was not a partner, but only a small-equity owner and an employee.

Despite his giant ego, he had a skill set that the company needed. While he was a pain to deal with, he did bring some valuable things to the table, including a proficiency in generating business and revenue.

Despite these skills, several fundamental flaws kept creeping up. He had some personal financial needs that kept him asking for more and more money until he was — and I am not exaggerating here — being paid more than five times that of a comparable employee. He covered his sizable salary by paying his staff low and generating lots of revenue so that the office looked like it was doing well.

To find out exactly what was going on, the entrepreneur finally made a trip to this office. Upon arriving, he noticed that the office manager, who used two computer monitors, had rear view mirrors mounted to each one. Remember, this is a true story.

When asked about the rear view mirrors, she replied that she had them so the small-equity owner could not sneak up on her when he came in. When pressed further she said that he micromanaged everything and that the whole staff would find other jobs if they could.

Firing the minority partner was a tough decision for the entrepreneur because he knew he would have trouble finding another person with the necessary skills.

When I asked him how he tolerated this individual for so long, he shook his head and said, "I thought I no choice until I was pushed into a corner and left with no other option but to let him go."

No employee should ever be considered irreplaceable. Now go out and make sure that you do not allow a situation to develop where employees have to put rear view mirrors on their computers.

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