After serving as Panera Bread's CEO for 26 years, co-founder Ronald Shaich resigned in January. Although he still remains the company's chairman, Shaich reflects on what he wishes he did differently as CEO in an article for Entrepreneur. "I wish I fired more people," he writes.
Shaich says that looking back, he was "too obsessed with being a caring leader" and he thought of his employees as family. The founder points to a senior executive who worked at the company for more than 20 years. His job eventually "outgrew" him and he was checked out, but he kept showing up to work.
"I pushed him and waited for him to step up. For years. But I didn't fire him," writes the founder. "What I should have done was let him go sooner, and many others like him."
As Panera grew bigger, other members of his team simply couldn't keep up. Still, Shaich refused to fire them because they helped build the company.
"Instead of confronting them, I'd find ways to cover for them," he writes. "I was willing to do their work. Time and time again, that hurt the organization."
Shaich admits that it took him so long to fire poor employees because he didn't fully "come into my own as a leader" until the last ten years of his CEO career. However, to be an effective leader, you must know when it's time to let go of an employee, says Neal Hartman, a senior lecturer in managerial communication at MIT Sloan School of Management.
Hartman tells CNBC Make It that company leaders must focus on two things when gauging an employee's work: attitude and performance. Performance is generally easier to measure, says Hartman, because you have a better sense of whether an employee's work is improving, slipping or remaining consistent.
Attitude deals with how the person acts at work. For example, is the employee enthusiastic about coming to work, is the person energized about projects that they're working on and does the individual have a positive approach to what they're doing and in their interactions with other employees and clients?