What is “at-will employment”?

Since I write a lot about the sociology and HR game theory of software engineering, I get a lot of hits to my blog for queries related to employment and, in particular, its endgame, such “should you sign a PIP” (answer: no) and “can they fire you for <X>”. I’m going to answer the second category of question. Can a company fire employees for any reason? Isn’t that what at-will employment means?

Well, no. Companies like to claim that at-will employment means that an employee can be terminated for any reason and has no recourse. They like to argue that people never win termination lawsuits except when discrimination is obviously provable. They say this because they don’t want to deal with the lawsuits, and they believe they can get away with low or nonexistent severance payments if the employee actually believes this. However, that’s not true. If it were, companies would not write severance packages at all.

Before I go any further, I am not an attorney and this material is provided for informational purposes only. This is no substitute for legal advice, and if you are at risk of, or in the process of, a messy termination, you should be consulting a lawyer. Preferably, find an attorney in your state, because these laws differ depending on where you are. What I’m providing here is for the purpose of explaining the HR game theory involved, with the goal of shining some light on how companies work.

What is “at-will employment”?

Legally, it means that the employment contract is of indefinite duration and can be ended by either party on a same-day basis. An employee is not in breach if he quits at any time, nor is the firm required to provide notice or a severance package. It exists to protect 3 classes of termination:

  1. Layoffs for business reasons. Companies that choose to end employment for a business reason, such as the closing of a factory or a need to reduce payroll, have the right to end jobs. In some cases, they are required to provide notice or severance (see: WARN Act) but not in all.
  2. Objective, published performance or conduct standards. Companies have the right to set performance standards as they wish, as long as they are uniformly enforced, and to fire people who fail to meet them. (Uneven enforcement is another matter. If it can be proven, the employee might have recourse.) It is not for the law to decide that a standard is “unreasonably high”. If a business decides that it needs to set productivity standards at a level that only 5 percent of the population can meet, that’s their prerogative.
  3. No-fault “breakups” in small companies. In small firms where the failure of a single working relationship can make employment completely untenable (because there’s no possibility for “transfer” in a 8-person company) the employer maintains the right to say, “We’re just not that into you”. This does not apply to large companies, where an employee who fails to get along with one manager could be transferred to another.

I don’t think any of these provisions are unreasonable. Companies should be allowed to lay people off for valid business reasons, set uniformly-enforced performance standards as high or low as the business demands, and terminate people whose failed relationships make employment untenable.

What doesn’t it cover?

A surprisingly large set of terminations are not covered under the above. I’m going to pick on one, resume lies. Clearly, this is fireable under any circumstances, right? Well, no.

Job fraud, defined as procuring a job that would not normally be available using misleading information that claims competencies the individual does not have, is a breach of professional ethics in any line of work, and in life-critical professions or law, it’s illegal. (If you say you’re a doctor and don’t have a medical degree, you’re likely to end up in prison.) People can be terminated for that, no question. So what is job fraud? If someone claims to have a PhD and didn’t even finish college, that would be considered job fraud, if the job requires a higher education. If someone is hired as an Enterprise Salesman based on his claimed 5 years of Goldman Sachs (and the contacts that would imply) but did not work there at all, that’s job fraud. What about someone who covers up an embarrassing, 4-month-long, gap in employment? That’s a much grayer topic. Let’s say that the applicant actually had 37 months of experience in that field, and with the inflation, 41 months. Well, that’s like rounding up a 3.651 GPA to 3.7: not exactly fraudulent. To establish just cause for termination, the company must prove that it would not have hired that same person with only 37 months of experience: that a pre-existing cutoff for that position was between 37 and 41 months of employment. (It could set a policy of not hiring people with 4-month gaps in their history, but juries will not look kindly on a company with such a policy.)

Broadly speaking, resume lies fall into two categories: job fraud, and status inflation. If job fraud occurred– the person would have been ineligible for the role were truthful information provided– the company will have no problem firing that person. Severance or notice are not required. The company is not required to prove that the standard is reasonable, but only that one exists and is uniformly applied. On the other hand, most resume lies are inflations of social status and political success: upgraded titles, tweaked dates, improved performance-based compensation, and peers representing themselves as managers to fix reference problems. It’s much harder for a company to prove that the person would not have been hired were truthful information provided. There’s a spectrum:

  • Overt job fraud, at one extreme, is deception claiming competencies a person does not have, such as a person who never attended medical school claiming to be a doctor. This person can be fired immediately, and often prosecuted.
  • Cosmetic falsification is generally not grounds for termination. Let’s say that a person claims to have ancestors who came over on the Mayflower. In “white-shoe” law or management consulting, this could easily sway an interviewer. It’s a signal that the person is more likely than average to have the pedigree that clients prefer. However, since it’s not an explicit requirement for the job, and the company would have a hard time proving that it swayed their decision, few companies would be able to justify terminating an employee on that alone.

This is also why it’s much more dangerous (and far less useful) to fake a college degree than to upgrade a job title, self-assigning a promotion when one was actually passed over. The first is considered fireable job fraud almost always, and it lacks plausible deniability (you cannot claim to have forgot how you spent 4 years of your life). The second has two advantages. First, unless that title were an explicit job requirement (“we only hire SVPs, not VPs”) it doesn’t consist of grounds for termination on its own. Second, there’s plausible deniability: “I was promoted during my last week there, and they must have forgot to put it in the system. Since I was no longer working there, I wasn’t aware of this discrepancy.”

Why does HR exist?

The purpose of the above discussion was to show that companies don’t have as much freedom to “fire at will” as they might want. They can’t just can people who annoy them. However, most company executives would like to be able to fire as they wish, and preferably cheaply. That’s where HR comes in.

For blue-collar, commodity work, companies have the unambiguous right to set performance standards and fire people who don’t meet them. However, the standard must be uniformly enforced. If a company decides that 150 widgets per hour is the productivity standard and fires Mark for achieving 149, it’s within its rights to do so. However, if Mark can establish that Tom, the boss’s son, was regularly pulling 145 and retained, then Mark can justify that his termination was wrongful.

In most states, uneven enforcement of policies is not enough to justify a lawsuit. Rather, wrongful termination requires a specific protected context (discrimination, retaliation, harassment, union-busting) before a case will even be heard, and “he just didn’t like me and was unfair” does not qualify. It is, however, not that hard to create such a context. Here’s one way to do it: in response to managerial adversity, put in for a transfer. Now, a negative performance review (if that review reduces transfer opportunities, or would be visible to the manager of one’s target team at all) constitutes tortious interference with an attempt to establish a mutually beneficial working relationship elsewhere in the company. Since part of the worker’s job is to remain aware of internal mobility opportunities, this is direct interference with work performance, and that is, of course, a form of harassment. It’s retaliation against legitimate use of internal processes.

This approach doesn’t work if the company can establish a uniformly enforced, objective performance standard. No employee at 149 widgets per hour was ever retained or afforded transfer. However, the nature of white-collar “knowledge work” is that it’s almost impossible to define standards for it, much less enforce fairness policies that can apply uniformly across a job description. Consider software. A first scratch at a standard might be “20 lines of code, per day”. For engineers on new development, this is easy to meet. For maintainers whose time is spent mostly reading code, it’s very hard. Also, it provides dangerous incentives, because it’s relatively easy (and in the long term, costly) for an engineer to add 20 lines of useless code.

This, of course, is what’s behind the “calibration score” nonsense and global stack-ranking in which companies regularly engage. The original intention behind these systems was to enable quick layoffs without discussion. Actually cutting projects that made no sense (which is what the company needed to do, possibly in addition to reducing personnel) required a discovery process, and that involved a lot of discussions and input, and word would get out that something was going on. The purpose of the global stack-ranking is to provide a ready-made layoff for any cutoff percentage. It’s a simple database query. What percentage are we cutting? 7.5? Here’s your list. This is actually a terrible way to do layoffs, however, because it means people are cut without eliminating projects. So (a) fewer people are left to do the same amount of work, and (b) the excessive complexity– what likely caused the company to underperform in the first place– never goes away. That said, it remains a popular way of doing layoffs because it’s quick and relatively easy. It also generates a slew of bad data.

One of the dangers of bad data is the temptation to use it as if it were valid. “Calibration scores” are subjective, politically motivated, and often bear virtually no correlation to an individual’s ability to add value to the firm. However, in the context of at-will employment, they have an additional use. The books can be cooked in order to justify “performance-based” firing of any employee for any reason. Instead of “150 widgets per hour”, the standard becomes “3 points out of 5″. Of course, the numbers are bullshit made up to justify personnel decisions that were already made, but they create the appearance of a uniform policy: no employee below 3.0 was retained.

This also explains the phenomenon of transfer blocks. Employees who meet too much documented political adversity find themselves immobile in the company. Either that person’s personnel file is damaged (often by falsehoods the employee will never be allowed to see, because she would have a serious harassment claim if she knew what was in it) so severely that no manager will want her, or she is prohibited from moving at all as per HR policy, even if there’s another manager who’d gladly hire her. At first glance, this makes no sense. Why would HR care enough to interfere with internal mobility? The answer is that it can break the uniformity that’s needed to justify termination. Let’s say that this employee was particularly politically unsuccessful and received a damning 2.6 (where 3.0 is passing) on her performance review. If she’s allowed to transfer to another team, then another employee who received a 2.7 and was not allowed to transfer has recourse. Of course, the likelihood that an ex-employee will compile this sort of information in enough volume to build a case is very low, because the data are hard to get without initiating a lawsuit, but this should explain why companies are insistent on keeping those “calibration scores” secret.

The HR transfer block is a nasty thing to encounter. It doesn’t occur unless a manager is so hell-bent on firing an employee that he must be kept in place. It also means that, even if the new manager desperately wants to hire a person, she often can’t. There are only two ways to beat an HR transfer block. One is to escalate, but that rarely works, because managers at a high enough level to do this are generally too busy to hear petitions from peasants they don’t know. The second is to offer a bribe to someone in HR who can change the review. This practice is a lot more common than people think, but that’s not a good position to be in, and I’d say it’s not the recommended course of action in most cases. (Just get another job.) HR bribes don’t always work, and they typically cost 3 to 10 percent of a year’s salary. When you’re at the point of having to pay for your own job, you’re better off just finding another one. Keep in mind, also, that if you’re in this position you’ll often be paying two to three times the bribe you offer, because what you’re doing is immediately fireable. (The first rule of extortion: when offered an illegal bribe, triple it.)

There’s one more thing to talk about. What is it that companies really fear? When they write these “performance improvement plans” (PIPs) and create elaborate machinery to justify terminations that are actually political, what are they trying to defend themselves against? First, they don’t want to be sued– that much is clearly true. However, they also know that the vast majority of employees won’t sue them. It’s extremely time-consuming, it can be dangerous to one’s professional reputation, and employers win most of the time. The economic cost of losing a lawsuit, multiplied by the low probability that one occurs, is not something a large firm fears. Secondly, they’re afraid of public disparagement, which is what severance packages are really about. People who can move on to another job without financial worry or loss of career status are unlikely to spend months to years of their lives suing an ex-employer. They move on. However, there’s a third fear that is often not discussed, but it’s important to understand it when negotiating severance (in which, by the way, you must involve a lawyer because you do not want an extortion rap). Companies aren’t afraid of the financial costs of a lawsuit, and they can’t do much about disparagement, but there’s something else that terrifies them. Discovery. Even if the employer wins a termination lawsuit– and, fair warning, they win about 80 percent of the time– they’re going to have to prove that the termination occurred in the context of a uniformly enforced, fair performance standard. Everyone knows that white-collar work is subjective and often impossible to measure, so there are a lot of angles that can be exploited. All sorts of personnel data, HR intrigue, and possibly even historical compensation tables, can be brought into the open. That’s a terrifying thought from an employer’s perspective: much scarier than losing a termination lawsuit. So even winning a termination lawsuit is a pyrrhic victory for the employer. However, that’s unfortunately also true for the employee: winning is pyrrhic, and losing can be disastrous. There’s a delicate “mutually assured destruction” (M.A.D.) at play. Companies will often pay severance just to make the dance not happen.

This also leads to the one bit of advice that I’m going to give. This is not legal advice, but I’ve seen enough good people (and a few bad ones) get fired that I think it’s valid. Unless you are in financial need, you probably don’t want to push for more cash severance than is offered. If they offer 3 months, and you’re likely to have a job in two, then take it. Don’t try to push your go-away fee up. However, never walk away for free, and always make sure your reputation is protected. You can take a zero for cash, but if you do, mandate a positive reference (written, agreed-upon, contractually obligated) and the right to represent yourself as employed until you find your next job. One major advantage of pushing for a non-financial package is that you’re less likely to inadvertently do something illegal. Companies know that disparagement is a more credible threat, in the age of the Internet, than a termination lawsuit, but you can’t legally say it. If you say, “Give me $50,000 in severance or I’ll write a blog post about this”, you’re breaking the law and, while you probably won’t go to jail, you’ve lost all leverage with the employer. With only a reference being asked-for, you can frame it as, “Hey, we need to come up with a straight story so we don’t hurt each other in the public. I intend to represent my time at your company well, but here’s what I need from you.” Still, work with an attorney to present the deal because this is a very weird territory. (I know too much about extortion law for one lifetime, having been illegally extorted by a (now ex-) employer in the spring of 2012.)

That, in a nutshell, is an incomplete summary– but a scratch at the topic– of at-will employment. I hope that none of my readers ever need this information, and certainly that I will never have to use it, but statistically, many will. Good luck to those who must fight.

“Fail fast” is not an excuse for being a moron, a flake, or a scumbag.

I wrote before on technology’s ethical crisis, a behavioral devolution that’s left me rather disgusted with the society and culture of venture-funded technology startups, also known as “VC-istan”. There are a lot of problems with the venture-funded technology industry, and I only covered a few of them in that post. Barely addressed was that so much of what we do is socially worthless bubble bullshit, like Zynga– which, in my mind, only proves that a company can be taken seriously even when its name sounds like 4th-grade anatomical slang. Most of us in venture-funded technology are merely bankers, except for the distinction that we buy and sell internet ads instead of securities. This world of crappy imitations and bad ideas exists because there’s a class of entrepreneurs (who are well-liked by venture capitalists) who’ve become convinced that “the idea doesn’t matter”. That’s ridiculous! It’s good to pivot, and sometimes one has to change or abandon an idea to survive, but ideas and purposes do matter. When this fast-and-loose attitude is taken toward ideas, the result is that stupid ideas get lots of funding. That’s unpleasant to look at, but it doesn’t have the moral weight of some of VC-istan’s deeper problems, which I’ve already addressed. To pore into those, I think we have to look at a two-word good idea taken too far, and in horribly wrong directions: fail fast.

As a systems engineering term, “fail-fast” is the principle that a failing component should report failure, and stop operation, immediately, rather than attempting to continue in spite of its malfunction. The diametric opposite of this is “silent failure”, which is almost always undesirable. In software engineering, it’s generally understood that an average runtime bug is 10 times as costly as one found in the compilation process, and that a “do-the-wrong-thing” silent bug can be 10 to 1000 times more costly than one that throws a visible error at runtime. In software engineering, redundant systems are usually preferable because components can fail (and they will, for causes ranging from programming errors to hardware defects to data corruption caused by cosmic rays) without bringing the whole system down and, in these, for dysfunctional components to halt fast is usually a desirable behavior.

In the systems case, it’s important to look at what “fail” and “fast” mean. Fail means to stop operation once there is a detected possibility of erroneous behavior. Fast means to report the failure as soon as possible. Whether it’s a bug in software or a defect in a manufacturing process, it’s always astronomically cheaper to fix it earlier rather than later. The idea isn’t to glorify failure. It’s an acknowledgment that failure happens, and it’s a strategy for addressing it. Fail fast doesn’t mean “make things unreliable”. It means “be prepared for unexpected wrongness, and ready to fix it immediately”.

In VC-istan, “fail fast” is an attitude taken toward business, in which failure becomes almost a badge of honor. I believe this is intended as an antidote for the far more typical and pernicious attitude toward business failure, which is to personalize and stigmatize it, as seen in “middle America” and most of Europe. I’ll agree that I prefer the fail-fast attitude over the paralyzing risk aversion of most of the world. The reason Silicon Valley is able to generate technological innovation at a rate faster than any other place is this lack of stigma against good-faith failure. On the other hand, I find the cavalier attitude toward failure to often veer into frank irresponsibility, and that’s what I want to address.

The typical VC startup founder is rich. Without inherited connections, it takes about twelve months worth of work without a salary to produce something that VCs will even look at. (With such connections, VC mentoring comes immediately and a fundable product can be built within about half that time.) Even for the rich and well-connected, it’s dicey. VC acceptance rates are typically below 1 percent, so a lot of good ideas are being rejected, even coming from well-positioned people. Raising money is always hard, but for people who aren’t wealthy, the risk is generally intolerable: twelve months without salary and a high likelihood that it will amount to zilch. Why’s this relevant? Because rich people can afford a cavalier attitude toward failure. Losing a job just means moving vacations around. If one company dies, another can be built.

In an ideal world, everyone would be rich, by which I mean that material limits wouldn’t dominate peoples’ lives and their work in the way they do now. This would be a world of such abundance as to implicitly provide the safety associated with socialism, without the drawbacks, and in which poverty would be eliminated as thoroughly as smallpox. I believe humanity will reach a state like this, but probably not until the end of my lifetime, if not some time after I’m dead. In this “post-scarcity” world, libertarian capitalism would actually be a great system (and so it’s easy to see why out-of-touch rich people like it so much). Business failure would just be the impersonal death of bad ideas, resources would quickly be allocated to the good ones, and people would rise into and fall out of leadership positions as appropriate but could gracefully decline when not needed, rather than having to fire their help, pull their kids out of college, or move halfway across the country when this happens. If everyone were rich, libertarian capitalism would be a wonderful economic system. However, we don’t live in an ideal world. We have to make do with what we have.

In the real world, failure hurts people, and most of those people aren’t 23-year-olds with $5-million trust funds. Investors (not all of whom are rich) lose large amounts of money, and employees get fired, often without notice or severance. Careers of innocent people can be damaged. This doesn’t mean that failure is morally unacceptable. Good-faith failure must be accepted, because if failure leads to broad-based social rejection, you end up with a society where no one takes real risk and no advancement occurs. This isn’t an abstract danger. It’s something that most people see every single fucking day in the typical corporate workplace: a bland, risk-intolerant environment where people are so afraid of social rejection that people torture themselves in order to seem busy and important, but no one is taking creative risks, and real work isn’t getting done. So my attitude toward those who take risk and fail in good faith is one of empathy and, sometimes, admiration. I’ve been there. It happens to almost everyone who wants to accomplish something in this world.

My issue with “fail fast”, and the more general cavalier attitude toward business failure observed in VC-istan, is that people who espouse this mantra generally step outside the bounds of good-faith failure, responsible risk-taking, and ethical behavior. When you take millions of dollars of someone else’s money, you should try really fucking hard not to fail. It’s a basic ethical responsibility not to let others depend on you unless you will do your best not to let them down. You should put your all into the fight. If you give it your best and don’t make it, you’ve learned a lot on someone else’s dime. That’s fine. The problem with “fail fast” is that it sounds to me a lot like “give up early, when shit gets hard”. People with that attitude will never achieve anything.

Usually, the worst “fail fast” ethical transgressions are against employees rather than investors. Investors have rights. Dilute their equity in an unfair way, and a lawsuit ensues. Throw the business away recklessly, and end up in court– possibly in jail. One can’t easily fire an investor either; at the least, one has to give the money back. On the other hand, a remnant of the flat-out elitist, aristocratic mindset that we have to kill the shit out of every couple hundred years (cf. French Revolution) is the concept that investors, socially speaking, deserve to outrank employees. This is absurd and disgusting because employees are the most important actual investors, by far, in a technology company. Money investors are just putting in funds (and, in the case of VC, money that belongs to other people). They deserve basic respect of their interests for this, but it shouldn’t qualify them (as it does) to make most of the important decisions. Employees, for contrast, are investing their time, careers, creative energy, and raw effort, often for pay that is a small fraction of the value they add. Morally speaking, it means they’re putting a lot more into the venture.

I’ve seen too many sociopaths using “fail fast” rhetoric to justify their irresponsible risk-taking. One example of a fail-fast acolyte is someone in his mid-20s whom I once saw manage the technical organization of an important company. I won’t get into too many details, but it’s an ongoing and catastrophic failure, and although it’s evident to me at least (because I’ve seen this shit before) that he is personally headed toward disaster, it’s not clear whether the company will follow him down the drain. (That company is in serious danger of failing an important deliverable because of decisions he made.) I hope it doesn’t. First, he took a scorched earth policy toward the existing code, which was written under tight deadline pressure. (Despite this twerp’s claims to the contrary about the “old team”, the engineers who wrote it were excellent, and the code quality problems were a direct result of the deadline pressure.) I don’t consider that decision an unusual moral failure on his part. Give a 25-year-old programmer the authority to burn a bunch of difficult legacy code and he usually will. At that age, I probably would have done so as well. That’s one very good reason not to give snot-nosed kids the reins to important companies without close supervision. I remember being 18 and thinking I knew everything. A decade later… turns out I really didn’t. Taken too far, the “fail fast” mentality appeals to impulsive young males who enjoy waving a gun around and shooting at things they can’t see and don’t understand.

My second encounter with this person’s “fail fast” sociopathy was in a discussion of hiring strategy, in which he discussed building “30/60/90 plans” for new hires, which would entail milestones that new employees would be expected to meet. As a way of setting guidelines, this is not a bad idea. Technology workplaces are a bit too dynamic for people to actually know what a person’s priorities should be three months in advance, but it’s always good to have a default plan and baseline expectations. New hires typically come on board, in a chaotic environment, not knowing what’s expected or how to “on-board”, and a bit of structure is a useful. This little sociopath wanted to take things a bit further. He thought it would be a good idea to fire people immediately if they missed the targets. New hire takes 35 days to meet the 30-day goal? Gone, after one month. No chance to move to another part of the organization, no opportunity to improve, no notice, no severance, and it’s all made “fair” by putting all new hires on a PIP from the outset. I’m pretty sure, I’ll note, that this young twerp has never been fired himself– and my money’s on him being three to 12 months away from his first experience with it, depending on how fast he can learn that primary executive skill of shifting blame, and how long he can run it. These sorts of terrible ideas emerge when people are permitted to take irresponsible risks with others’ careers. Most of the damaging HR “innovations” companies invent (which become tomorrow’s morale-damaging bureaucratic cruft) occur not because they’re good ideas for the company, but because people within these companies want to propose wacky ideas that affect other people, in the hope that some “greater fool” in upper-management will see the half-baked concept as “visionary” and promote the person who invented it, regardless of the idea’s lack of merit. That’s how Google’s douche-tsunami (douchenami?) system of stack-ranking and “calibration scores”, for just one example, was born.

I don’t like people who are cavalier about failure when they haven’t been on the other side of it, either as an investor who lost a large sum of money, or as a laid-off or unjustly-fired employee. To put it plainly and simply: “failing fast” with other peoples’ risk is not courage. I say this as someone who has taken a lot of risks and failed a few times, who has always accepted the consequences of what he has started, and who has always done everything possible to make sure that anyone taking a risk with me knows what he or she is getting into.

I’m going to advise something altogether different from “fail fast”, because the term “fast” has chronological implications that I don’t find useful. Protracted failures driven by denial are bad, sure. I agree with that aspect of “fast”, but people should try to avoid failure if they can, rather than jumping immediately to declare defeat and move on to a sexier prospect. Fail safely or, at least, smartly. Know what the risks are, disclose them to those who are taking them, and be prepared to address failures that occur. There are cases where chronologically fast failure are appropriate, and there are times when it is not. Largely, the ethics of this come down to what risks the involved parties have agreed to take. People who invest in a startup accept the risk of losing the entire investment in a good-faith business failure, but they don’t accept the risk that the founder will just give up or do something overtly unethical with the money (bad-faith failure). Employees in startups accept the risk of losing their jobs immediately, without severance, if the company goes out of business; but if they’re misled about how much runway the company has, they’ve been wronged.

The ethics of “fail fast” depend largely on the explicit and implicit contracts surrounding failure: how failure is defined, and how it is to be handled. These are conversations people don’t like having, but they’re extremely important. Failures happen. Often these contracts are left implicit. For example, a person who joins a five-person company accepts that if he doesn’t fit well with the project (because a startup of that size only has one project) his employment must end. More on that, being a founder means that one will be (and should be) fired immediately if one doesn’t work well with the rest of the team, just as being a elected official means one accepts the risk of being fired for being unpopular. On the other hand, a person who joins a more stable, large company, does so with the expectation of risk mitigation. Specifically, people join large companies with the understanding that being a poor fit for one’s initial project doesn’t mean leaving the company. The additional robustness of career is a primary incentive for people to join huge companies. Therefore, large companies that impede internal mobility, usually under pretenses of false objectivity in the performance review process, are deeply unethical and their reputations should be tarnished gleefully and often, in order to prevent others in the future from being blown up by undisclosed risks.

The “fail fast” mantra implies that failure is hard, and that it takes a certain fortitude to look failure in the eye and accept the risk. Alone, that’s not hard. Lying down is easy. Quitting on someone else’s risk and dime is not hard. Letting people down is not hard. The hard part is communicating risks as they actually are to people before they get involved, finding people willing to take those risks, working as hard as possible not to let people down, and working even harder to help everyone recover from the loss should failure occur.