I had to fire one of my best friends… |
It cost me a valuable employee, a great friend, millions in lost revenue, and worst of all… |
…it was all my fault. |
Today, I want to share what I learned and what I do now to avoid repeating this same mistake. |
Just for context, this friend started working with me in the early, early days of my business. |
I ran the company.
He helped with marketing and general "project stuff." |
So, I made myself CEO and made him CMO/COO. |
(Horrible mistake. Never do this.) |
As we scaled, we needed to add people to the team. Specifically, people with more experience than he had. |
The Problem: Experienced "A-Players" don't want to report to somebody who's clearly less experienced than they are, especially if that person has a "Chief" or "VP" in their title. |
They know they can't learn, and worse…they know they'll be capped. |
So we built a team of B and C players. |
Things bogged down, because my friend…very smart, very motivated…got overwhelmed managing C-player "helpers." |
And this wasn't just bad for the company, it was bad for my friend because it meant there wasn't any time for him to learn and grow anymore. |
Payroll increased.
Sales stalled.
Margins squeezed. |
But I couldn't afford to hire anyone else to support him, nor would he allow anyone to be hired "over" him. |
I sat on this problem for well over a year. |
I knew I'd made a mistake.
I knew he was in the wrong role.
But I was scared. |
Because I knew making this change would likely end the friendship. |
And that's what happened. |
Eventually, things reached a breaking point where I had no choice… |
I asked him to take a demotion.
He was angry.
There was a falling out.
We didn't talk for years. |
I'm happy to report that (a decade and a half later), the friendship was restored. |
He found a great role at another company where he could learn and grow. |
He was amazingly successful and eventually started his own businesses, where he made far more money than he would have earned as my CMO. |
But the damage was done, and it could have been avoided. |
So, here are three lessons you can take from my first big leadership failure that will help you whether you're hiring friends or total strangers: |
Lesson 1: Don't promote people to positions they haven't earned simply because they're "there." |
If you must give someone a title, make it "Head of" (not CXO or VP) because "Head of" is descriptive and temporary…not status-based and entitling. |
But it's far better to just give them a title for the actual role they're performing, not one based on the fact that they're currently reporting to you, the CEO. |
Lesson 2: When somebody is in the wrong role, have the conversation sooner…not later. |
If I'd had this conversation 12 - 15 months earlier, it would have gone smoother. It might not have saved the friendship, but it would have been better for all involved. |
Lesson 3: When you keep somebody in the wrong role because you're afraid to have a difficult conversation, it's not just bad for the company…it's bad for them. |
My misplaced "loyalty" to my friend held him back every bit as much as it held the company back. |
He was stuck in a job where he couldn't grow…where I was his "best option" because I was his only option…all because I was unwilling to have the tough conversation. |
To be clear… |
This wasn't a bad hire.
And it wasn't "mixing friends and business." |
It was a role-identity mistake, combined with a failure to fix the problem the moment I knew it was a problem. |
Titles don't create leaders.
Timing doesn't create leaders.
Experience, capability, and clear expectations are what allow leaders to develop. |
And when you avoid the hard conversation, you don't protect the relationship… |
…you just delay the inevitable damage. |
⚡️ Action Step: Write down your leadership team. No titles…just names. Then, ask one question for each person: "Is this the right role for their current skill level?" |
If the answer is "Not yet," don't wait a year like I did. |
Have the conversation now. You don't have to fire them or even demote them, but you do have to get on the same page with what success in their role/title should look like…before it's too late. |
Ryan Deiss
Co-Founder and CEO, The Scalable Company |
P.S. I'm looking for 5 business owners who want to work 1-on-1 with my team and me to install a custom "operating system" in 2026, so your business can scale and so you can exit the day-to-day. Click here for the details. |
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