What Is The Biggest Management Mistake You’ve Ever Made?

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I blew it. The voice in the back of my head was arguing with itself. On the one hand it was saying, “Don’t hire ‘Tom’. There’s something wrong with him.”

On the other hand, the voice was saying, “Brett, you need help in this area. You should hire Tom. He’s got a wealth of experience. The whole board has interviewed him and loves him. Two board members have worked with him previously. He’ll help close funding. Just do it, Brett! Hire Tom.”

The first voice said to the second voice, “Brett, he’s all of those things, but he’s just a little off. Are you really sure about this?”

The second voice in my head said, “Yes, I’m sure about this. I am going to make an offer to Tom.”

And then we hired him.

Months later, as we were in the process of closing funding, Tom told me he had consulted a few years ago for another venture-backed company. I didn’t remember seeing it on Tom’s CV.

The chairman of venture-backed company was a personal friend, so I called him and asked about Tom. Here’s what I heard:

  • Tom was an employee, not a consultant
  • Tom was fired after 6 months on the job

Tom clearly had lied to me. And just as importantly, Tom had withheld information on his CV.

Tom had to leave the company.

So what did I do? I didn’t immediately fire Tom. That was my big mistake.


You have to fire problem employees, especially senior executives quickly.


We were in the middle of fundraising, and I convinced myself that firing a senior executive that we just hired would cause us trouble. And Tom was failing at his job.

Tom wasn’t doing what I asked him to do. In fact, Tom seemed downright incompetent. But the board seemed to like Tom and our potential new investors kept asking about Tom, so I didn’t fire him.

I was afraid of the consequences of firing Tom. I hoped that he would do an adequate job. Then I would fire him after our funding closed.


Problem employees always create problems at the absolute worst time.


You can guess what happened next. Tom quit.

I called our existing investors to let them know that Tom was leaving. Our existing investors were so scared about Tom quitting that they told me to not tell our new investors.

I didn’t like this dynamic at all because I would be lying to our new investors. That’s not the way to build trust in a new relationship.

I called our new investors, and I let them know that Tom would be leaving the company. The responses went like this:

“Thanks for letting me know. Our diligence told us he might not work out. We appreciate your honesty.”


There are a few of lessons you can take from this experience:


A. Don’t hesitate to fix bad personnel decisions.


Time will only make these bad decisions worse, not better.


B. Ignoring the voice in your head, especially regarding personnel decisions, can be catastrophic.


Having a senior person leave during fund raising can potentially cost you the funds, so we could have lost everything. Fortunately, it didn’t.


C. Magnifying a mistake by hiding it, especially from your investors, can make things even worse.


Imagine what could have potentially happened if I hadn’t been honest with our new investors and they found out later? Never be afraid to tell the truth.

Obviously, I should have listened to the voice in my head. There are three other things I should have done to prevent the mistake of hiring Tom from happening in the first place:


A. Reference checks.


I figured I didn’t need to do reference checks because two board members were personally vouching for Tom. Hey, if they have worked with Tom before, and they say Tom is the best, and the other board members like Tom, well, what am I worrying about?

I already have the reference checks done, right? Wrong! Dumb, dumb, and dumber! You should always do reference checks.


B. Backdoor checks.


It is a connected world, and everyone knows everyone. I could have easily done backdoor checks on Tom. You have to take in context what you are hearing, but checking with mutual contacts about a candidate is essential.

Why are backdoor checks so important? You tend to get more candid answers than you do from the references the candidate suggests.


C. You should wait until the facts match your instincts.


You need to keep to your disciplines. I was under a lot of pressure to hire someone, and I let the pressure to hire make me move more quickly than I should have.

The Board really liking Tom didn’t match my gut that something is wrong. I should have kept digging until the facts and my instincts matched up. I didn’t, and it nearly cost us our funding.

I’m smarter than that. I suspect you are too. I should have been disciplined. When you’re hiring, you should too.

Oh, and those voices in my head? They’re still at it.


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