These are not just bad reasons; these are selfish excuses. Compassion is caring about others, but retaining the employee who should be fired is all about caring for ourselves--it is never about the employee. We want to protect our investment, our presumptuous feeling of parental responsibility, our time and energy, even our reputation for "being nice."

If employees quit, or were hit by the proverbial bus, we would find a way to address any real issues related to their sudden absence--we would have to, because their departure date would be out of our control.

The past is also out of our control; we can't go back and not make the hire, not spend on the training, or not create a "mission critical" job function. By firing we can at least make today the day we start investing in the future instead of continuing to waste resources and to delay the inevitable.

As the founder and head of a company, every aspect of the business and its operations reflects on you. You are responsible not only for yourself but for all of your employees and their actions on behalf of the company.

This is much more than making sure they do not make promises or sign contracts you do not approve of. It is making sure you are happy with the way your offices look, the way your phone is answered, the way your receivables are collected, and the way employees decorate their e-mail signatures.

I am not suggesting you micromanage every part of your company. I am suggesting that you do not consider any part of the company off-limits to micromanagement. By regularly reviewing and tweaking details throughout the business you keep yourself up-to-date on operations and ensure that your business reflects you.

Your business is your baby. You conceived it, gave birth to it, nurtured it, and protected it. You sacrificed to meet its needs, and you taught it how to live. Like any parent you can see beyond your baby's flaws to its fantastic future. And it's frustrating how your baby's potential isn't clear to everyone else.

You may have a great business. You may have a great product. You may provide a great service. But nobody is going to love your business, product, or service as much as you do. Nobody else can see things the way you see them. Nobody loves your baby like you do.

When I was a teenager I toured a factory and met its owner. Dreaming of having my own business I asked him for the best advice he could give me. His response was two words: "No partners."

We were approaching 100 employees. The majority had been hired without any involvement by me; the ones that I had hired had been hired quickly and with very little thought. Life in the office was one problem after another, and most of the problems involved the same employees again and again.

"Where did these people come from?" I whined at home.

"Well, you hired them," my wife said.

And she was right. The business was staffed with people we had offered jobs to. They had not inherited their jobs. They did not just mysteriously appear at their desks. They were not assigned to us by a government agency. We had actually entered into an agreement to pay these difficult and ineffective employees money to come into our office each day and waste our resources, agitate their coworkers, and grouse at the water cooler.

Why? Because I was willing to invest a week in researching a new technology but would not invest even ten minutes in hiring the right person for the job.

If there was a book of business poetry it would be full of odes to cash.

Cash is the only life and death issue for your business. There are lots of important things you can worry about--people, products, service--but they are important because they impact cash. Businesses with cash live. Businesses without cash die.

Profit is important, and it is the reason businesses exist, but it is not more important than cash. If you have the cash you can run an unprofitable company for years. Many companies in fields like bioscience have long research and development cycles and have yet to sell a product. There are a number of dot-com companies still in business today that have never earned a profit. They are all in business because they have cash in the bank.

The result was fewer customers--but better customers. The customers we retained were the serious users of our software, not the people who picked it up off a discount rack. And they were profitable. We were able to offer them better support even while reducing our support costs. We were able to invest in building higher-quality software instead of churning out lots of cheap new packages. Our spinning company stopped spinning and started moving in one direction. We returned from breaking even to being profitable again.

You should be optimistic about your business. Your salespeople should be optimistic about your business. Your parents, your children, your vendors, and your employees should be optimistic about your business. You do not want any negative, pessimistic, whining, cry-baby Chicken Littles on your team. Except for your accountant.

Your accountant, controller, bookkeeper, CFO--whoever it is that counts your money--should be a pessimist. Your accountant should not be the kind of person who thinks things are always going to get better. Your accountant should be the kind of person who thinks things are always going to get worse. Your accountant should be the kind of person who, when you say, "Good morning," responds, "We'll see."

I have talked with lots of small business people who also live right on the edge. Their business is in a perpetual cash crunch because their expenses always seem to be right behind (if not a bit ahead of) their income. Five percent is often the difference between losing money and making money.

Now I understand that lots of individuals and businesses have financial difficulties that make 5% look like pigeon feed. That is a whole other chapter: Chapter 11. I am talking about the businesses that are basically doing all right, but seem to be perpetually treading water to stay at the break-even point. For these businesses 5% is the difference between profit and loss--and that is a big difference.

The good news is that you can always find 5%.

Maybe because it sounds greedy, small businesses in particular do not generally talk about profit. Instead they focus on their secondary purposes: to help individuals find the best life insurance at the lowest rates; to provide a worry-free roofing future; to bring the authentic taste of Chicago deep-dish pizza to Podunk, Wisconsin.

Unfortunately, many people get so wrapped up in the secondary purposes of their business that they lose sight of the primary purpose. I was one of them.

A business is like a hot-air balloon: it is going up or it is going down. It is never standing still. The change in altitude may be slow, even imperceptible, but if the air in the balloon is not being heated up then it is cooling down. Cooling down is the natural tendency--you have to actively do something to keep heating up the air. If you do, the passengers are headed for the sky. If you don't, they are headed for the dirt.

You can never know when an employee is going to step in front of, or on, a bus. One minute you have the perfect employee who is taking care of everything for you, and the next minute he is gone, and you have no idea how the software works, who to call to reorder the raw materials, or where the key to the file cabinet is.

No amount of loyalty, good health, or compensation can save you from the buses. . .

When there is a disagreement in a relationship, however, or a difference of opinion on the interpretation of the agreement, the contract becomes something quite different. The dusty old text takes on all the characteristics of a sacred manuscript. It's inspected with a magnifying glass; definitions are looked up; phrases are parsed and reparsed to extract new meanings. Worst of all, you may discover that the text plainly commands something you wish it didn't.

The person least likely to be surprised by the detailed reading of a contract is the person who wrote it. That is reason enough to write it. There are other advantages as well:

You can learn everything you need to know in order to make your business a success by reading. . .

I think of academic journals as my secret weapon. Some of the best and most unique features in our product were inspired by things I found in academic journals. In some cases ours was one of the first commercial uses of an algorithm or idea that had been widely published and discussed in journals for years. So much of the academic world does such a good job of insulating itself from the business world that the commercial value of what the academics develop can remain hidden for years. There are huge rewards for the businesspeople who invest the time in reading the literature, deciphering the academic-speak, and slogging through all the useless byproduct of the "publish or perish" mandate.

A Profit & Loss statement is not a dashboard. A monthly report is not a dashboard. These financial statements tell you what happened in the past; a dashboard tells you what is happening now. A dashboard can even tell you what is going to happen next.

Knowing your customers is an idea that gets a lot more lip service than shoe leather. It is easy to think we are in touch with our customers if we are sending them surveys, taking their calls, and answering their questions. We do not really understand them, though, until we visit them where they live. And until we meet them in person we are just another anonymous and interchangeable supplier to them.

Even the most objective presentation of facts can be spun in many ways, and a reporter may have a different and completely legitimate interpretation of your story. One person's economy-building trade with a foreign tribe is another's exploitation of the less sophisticated. One person's strong leadership is another's unreasonable intransigence.

I've seen lots of brutal business stories in which a reporter made a compelling case for the subject's villainy or idiocy in words wrapped right around a smiling pose by the unwitting victim. Those interviewees were smiling at the thought of free advertising; they didn't see the hit that was coming.

Businesses are abysses. Businesses are bottomless pits of darkness that can not be fully illuminated. No one understands everything about a business. The only people who come close to fully understanding a business are the people trying to sell it, and they have no reason to explore all its dark crevasses with you even if they could.

Sometimes a business buyer gets lucky and finds a hidden gem deep inside a business. However, the buyer more often finds fool's gold and time bombs:

Every business meal is its own little world. The tone, the goals, and the strategies are different each time. The message of a meal has a lot more to do with the specific participants and the state of their business relationship than it does with a bunch of unwritten rules.

Unwritten rules, of course, are a lot more interesting. . .

There is a lot of inspirational stuff out there about giving 110%. That is great, though possibly exhausting, when it comes to effort. But success in business is not about how hard you work. Breaking rocks with a hammer is very hard work that will never put your name on a skyscraper.

Success in business comes from winning more than you lose.

Most employees are interchangeable parts in your corporate machine.

Your employees may be great people. They may be smart, talented, and attractive. They may be volunteer firefighters, soccer coaches, and great parents. They may never be sick, never be late, and never fail to deliver on time. It doesn't matter. They are still a dime-a-dozen.

There are thousands, if not millions, of people who can do a good job in almost every position in your organization. It doesn't matter how specialized or how technical the position is. Lots of people can do it well enough. There is no shortage of good employees.

There is a terrible shortage of exceptional employees.

I remember the first time I felt the responsibility of my job. I was starting to see the early signs of trouble in the business. I stood up on a picnic table to say a few words at the company picnic and looked out at more than 100 people--employees and their family members. Our business had been a great game to me, but it was a livelihood to these employees, and it supported their families. It was not a game to them.

Within a year, I was laying off some of those employees. Our growth had slowed, and my mistakes had caught up with me. The business sunk lower and lower and with it my confidence and my enthusiasm for the great game of business.