Jensen Huang rarely fires employees for mistakes, viewing the error as an expensive but valuable lesson the company has already paid for. Firing them would be discarding that investment, as the employee who made the mistake is now the least likely person to repeat it.

Related Insights

Jensen views pain and suffering not as obstacles but as essential ingredients for building character and resilience, which he considers superpowers more valuable than intelligence. He believes greatness is formed from people who have suffered and learned to handle setbacks.

Capital allocation isn't just about multi-million dollar acquisitions. Hiring a single employee is also a major investment; a $100k salary represents a discounted million-dollar commitment over time. Applying the same rigor to hiring decisions as you would to CapEx ensures you're investing your human capital wisely.

Jensen Huang rejects "praise publicly, criticize privately." He criticizes publicly so the entire organization can learn from one person's mistake, optimizing for company-wide learning over individual comfort and avoiding political infighting.

Terminating an employee shouldn't be viewed solely as a negative outcome. Often, a lack of success is due to a mismatch in chemistry, timing, or culture. Parting ways can be a necessary catalyst that enables the individual to find a different environment where their skills allow them to thrive, benefiting both parties in the long run.

Huang eschews traditional hierarchy, engaging directly with employees at all levels and delivering feedback publicly. This "parallel processing" management style ensures rapid, simultaneous learning across the organization, mirroring the architecture of the GPUs his company builds and creating a uniquely flat structure for a company of its size.

When an experimental campaign failed, Edelman's CEO Richard Edelman protected the mid-level employee responsible. He framed the mistake as a necessary cost of innovation in a new field, explicitly telling the team to "keep pushing boundaries." This response fosters a culture where calculated risks are encouraged rather than punished.

Jensen Huang maintains an extremely flat organization with around 60 direct reports and no one-on-one meetings. This unconventional structure is designed to accelerate information travel, empower senior leaders, and weed out those who can't operate without direct guidance.

Firing someone feels adversarial until you reframe it as a win-win. The employee wants to be successful and valued; if your team isn't the right place for that, helping them move on is a service to their career, not a disservice. This mindset changes the entire dynamic.

When transitioning leadership, you must allow your successors to make mistakes. True learning comes from fixing failures, not just replicating successes. As the founder, your instinct is to prevent errors, but you must permit 'fuck ups' for the next generation to truly develop their own capabilities and own the business.

Don't be paralyzed by the fear of making a bad hire. View hiring as an educated guess. The real knowledge comes after they've started working. Firing isn't a failure, but the confirmation of a mismatched hypothesis. This reframes hiring from a high-stakes decision to an iterative process of finding the right fit.

NVIDIA Views Employee Mistakes as Sunk Costs for Education, Making Firing Counterproductive | RiffOn