From: Patty McCord
Laura, our bookkeeper, was bright, hardworking, and creative. She’d been very important to our early growth, having devised a system for accurately tracking movie rentals so that we could pay the correct royalties.
But now, as a public company, we needed CPAs and other fully credentialed, deeply experienced accounting professionals—and Laura had only an associate’s degree from a community college.
Despite her work ethic, her track record, and the fact that we all really liked her, her skills were no longer adequate.
Laura reacted well: She was sad to be leaving but recognized that the generous severance package we were giving her would let her regroup, retrain, and find a new career path.
If we wanted only “A” players on our team, we had to be willing to let go of people whose skills no longer fit, no matter how valuable their contributions had once been.
Out of fairness to such people—and to help us overcome our discomfort with discharging them—we learned to offer rich severance packages.