From the April 2001 issue of Startups

I happened to have the opportunity recently to talk with someone who was laid off from his job as director of e-business technology at a high-tech firm. It was a chance occurrence that I relished, because typically I deal with entrepreneurs, not with the people they employ-or, for that matter, the people they lay off.

The conversation with this former worker-let's call him Joe-called to mind something I think all entrepreneurs should know, regardless of what kind of company you own or what kind of money you're making or how many employees you have. It spoke to good old common sense-to the basic need to treat employees like humans.

Here's the scenario: Joe, a brilliant man whose knowledge of technology and the ways in which it can be applied to business could, in theory, have allowed him to single-handedly run the company he worked for (trust me, I caught a glimpse of his resume), had been with this company-let's call it Company X-for approximately two years. Within those two years, he watched the company founder become increasingly gung-ho (read: increasingly money-hungry) over a particular area of Web development.

It so happens that the founder got the most gung-ho just as everything dotcom was going belly up-companies, stocks, that cute little sock puppet, you name it. And although Joe "saw the writing on the wall," as he put it-meaning he knew there wasn't any business coming in and things weren't looking good for Company X-he also knew there were things he didn't know. That sounds a bit cryptic, but the point is, he didn't know whether there was perhaps some funding to back the technology they were developing-some other reason why a sales force was getting revved up to sell, sell, sell.

And why didn't he know? Because no one talked about the problems. In fact, on the surface, everything seemed to be fantastic. Sure, Joe had started sending his resume out and preparing for the worst, but that's only because Joe's a smart guy. It's certainly not because anyone explained why they weren't getting any business or even remotely hinted that there might be some problems with the company. As far as they were concerned, things were just business as usual. And there was Joe each day, contributing to that sense of "normalcy."

I'm not implying you need to sit down with every employee and expound each and every line of your financials. And I understand there are those times when you simply can't tell your employees about a certain something going on within your company. But when you have key players like Joe who are as integral to the process as you, the founder, you need to make them part of the process of highs and lows, ups and downs. If things are obviously bad, don't pretend they aren't and then one day spring out from behind a wall with a pink slip in hand. And if things are good, don't get so excited that you forget to notice, say, the beleaguered New Economy. In essence, you can never be too humble as an entrepreneur, because the moment you start creating distance between you and your employees is the moment when you become the weakest link.

As for Joe, I'm sure he'll have a new, better job (or, better yet, maybe he'll decide to start his own company) in about a nanosecond, so I'm not too worried about him. I'm sure he wouldn't mind sending you his resume.