In this ongoing series, we ask executives, entrepreneurs and business leaders about mistakes that
have shaped their business philosophy.



Creator and CEO, TRX


Background:  

TRX Training designs and sells Suspension Training® and Rip® Training equipment as well as exercise programing and education. The TRX Suspension Trainer is a tool that builds total body stability and strength by leveraging the user’s bodyweight through hundreds of functional exercises. The product was invented by Randy Hetrick, who graduated from Navy SEAL training in 1989.

The Mistake:

One of the big mistakes that I learned from was around hiring.

I made a hire for a head of marketing position and didn’t do my homework enough. I was desperate to fill the position. We had been trying to find a person and someone became available to us.

I ended up going through the interview process [and was] not as detailed as I should’ve been. It was an initial interview process and we made the hire. That was not the mistake.

The mistake was that pretty quickly, within three months, we realized this person was not a good hire. There were problems around work ethic and skill set. Some of the early initiatives that the person was advocating were not as effective.

Here’s where the mistake came in. I allowed my HR director at the time to get us too focused on the potential liability risks associated with the termination of this person because there were protected class issues involved. They weren’t trivial issues—particularly in San Francisco, where the city is incredibly litigious around employment law.

What I allowed to happen was for a longer process to theoretically carry out in order to get all the documentation right. But that snowballed, because another protected class issue came to the fore.

I ended up subjecting the company to close to two years of a loss of the chief person who was supposed to be driving our marketing strategies, tactics and brand demand generation. The cost of that in terms of reduced lead generation and missed revenue goals vastly exceeded the worst-case potential liability, which would have been frivolous litigation that we potentially would have had to settle for six months to a year of severance.

 You have to make the right decision for the business, particularly when executive positions are in question.

The Lesson:

The big lesson was you have to make the right decision for the business, particularly when executive positions are in question. Because the broader ramifications to the organization will also exceed your worst-case liability concerns.

If someone is not working out because they’re not delivering, you have to let them go regardless of whether they’re under a protected class in employment law. It’s better off to make a generous settlement offer upfront to get that position filled or deal with the ligation if that’s the threat.

The role was gapped the entire time this was going on … and we couldn’t fill the position because we hadn’t terminated the person.

It was a big lesson. It would’ve been so easily avoided, just to say, “Sorry, this isn’t working. We need to move you on. Whatever you’re threatening to do, you’re going to have to do. We’re going to move on.”

I’ve talked to several of my buddies who are CEOs. They’ve also said, as long as you’re confident and the claims are baseless, you should make the decision. Let the chips fall where they are.

Follow Randy Hetrick at @RandyHetrick.

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