January 31, 2022

Your best employee will quit. Here's how to make that a competitive advantage

Planning for the inevitable looks a bit different at very early-stage companies and slightly larger ones.

Your startup is chugging along, the team gels perfectly, the customer feedback is great. Then it hits. A founder’s worst nightmare: one of your earliest employees, an irreplaceably key team member, quits. 

That first resignation hits you hard professionally — and personally. Surely this cannot be the same dedicated marketing director you discussed strategy with yesterday! This can’t be the same head of sales who landed that six-figure account who you had drinks with last night? How can your trusted lieutenants abandon you after everything you’ve shared together?

Once you’ve felt all the emotions, you accept their resignation. But acceptance is not enough; you need to see that employee quitting as a competitive advantage that will actually make your company stronger. And if you’re a fast-growing company, you’ll need turnover if you want to have the right talent for the right stage of your business. 


Is succession planning necessary?

Should you have spent more time on succession planning for those inevitable departures?

If you are an early-stage startup, I’d say no, at least as far as focusing on who to hire. But you should have already set up a process of what to do and how to take advantage of the loss of a key member of staff. Succession planning in this type of company should be about knowing what to do the moment a vital cog in your corporate machine hands in their notice, not navel-gazing about who to target.

So often I’ve seen search consultants paid huge fees for talent-mapping projects, but I’m yet to see this policy pay off. The employment landscape is constantly changing, and plans formulated just a few months ago will most likely be useless come the time of need.

What is hugely beneficial, however, is how desirable your company is to potential employees. Part of being able to get the people you want is down to how well you have invested in your corporate image. If you have an inspiring story, a clearly defined purpose and a great culture, the top talent will be watching and waiting for an opportunity to join your team. 

Gaining a competitive advantage from the loss of a key person requires a mix of proactivity and reactivity

Gaining a competitive advantage from the loss of a key person requires a mix of proactivity and reactivity. Just like you have invested in your company’s attractiveness to talent, you must also already know which headhunter or talent manager you are going to retain when the inevitable happens.

When someone resigns, you don’t need to panic because you know exactly who to call to help you fill the vacancy. Not having this detail set in stone can add weeks or months to the process of finding the right replacement, and possibly lead to bad decision making due to the pressure to make a hire.

So, you’re in a prime position to improve your top team, your company is aspirational and you have a top gun headhunter on speed dial. You know the strengths of the person who has just walked out of the door and you know their vulnerabilities too. You also know how the demands of the role have changed since it was last filled. What you now possess is the blueprint of the ultimate new team member, the top recruiter to seek them out and a corporate reputation to entice them away from their current position.

This is the recipe for how to profit from your loss.

What if you already have great internal talent?

In a larger company, however, you might be privileged enough to have a great internal bench of talent waiting for the opportunity to make their top-flight debut. You should be assuring them — even before that key employee leaves — that they are a candidate for more senior positions. The promise of growth and more seniority keeps them motivated and potentially encourages them to stay with the company longer. And you get loyal, high-quality candidates that you are familiar with and who know your business from the inside out. 

[At large companies] the keys to turning the loss of a crucial staff member into a competitive advantage are to be found internally

A perfect example of this happened recently: when Twitter founder Jack Dorsey stepped down as CEO, the company had an exceptionally able, homegrown replacement in its then-CTO Parag Agrawal, waiting to take the centre stage.

So, while large companies might have more scope for internal nurturing and promotion, and even budgets and resources to indulge in speculative projects like talent mapping, the keys to turning the loss of a crucial staff member into a competitive advantage are to be found internally.

Be the best company to work for in your space, have the best headhunter on standby at all times and be brutally clear and critical in deciding what you’re looking for at this stage in your development, and your loss will be your gain!