A Letter from Valerie
When the Fish Stinks from the Head
Once in a while I get these sheepish, confidential calls from VP's of HR working for a CEO who has, well, gone bad. Yes, in the same manner as week-old cod filet or a poorly corked wine. You know the type. A leader who blames his staff for his own failings. Who belittles employees in front of their peers. Who always seems to have at least one member of his executive staff on his rhymes-with-snit list. Who sets his crosshairs on underlings and picks them off one by one, leaving HR to handle the paperwork.
Usually, by the time things get this bad, the CEO is virtually paralyzed. Unable to punch through his selected objectives and take the company to the next level, he is as miserable as everyone else and is really freaking out. In these situations, the HR exec is usually calling me for a number of related reasons: to discuss potential ways of prying open the CEO's brain and inserting some enlightenment; to plot out football-style end runs around him, like going to the board and telling all; and to ask my opinion as to whether or not it's too soon to be looking for a new job.
There's plenty to analyze in these situations from an academic point of view, but it's incredibly painful and scary to be in this situation yourself. Think about it. You're enjoying your new, high-profile SVPHR job at the next Facebook or Twitter, and at first, you're flattered that the charming, open, charismatic CEO has taken you into his inner circle and exposed his vulnerabilities by asking you to clean up a messy executive termination that just happened to go down on your first morning in the office. You leaped right in and made it all go away and, in the process, felt you had showed what a team player you are and how hands-on you can be. But then, it happens again. The CEO randomly and unfairly targets another member of his executive team who, by all accounts, is a nice, hard-working, high-performing individual who just wants the company to succeed. And you not only have to fire him but beg the boss for a decent severance package.
Then, you find that executives are complaining that the CEO refuses to respond to their e-mails and won't talk to them at meetings. You notice that he only hangs out with a select few employees with whom he plays basketball at lunch and realize that, back in the office, he only seems to listen to these stuffed shirts and skins. No one can get anything done because he won't make any decisions and won't delegate authority to anyone. And the company is missing milestone after self-imposed milestone.
This sort of dilemma comes my way just about every month, from HR execs at companies of all stripes. Each time I start by thanking God that the CEO in question is not the father of my children, and then I begin dissecting the issues and helping to plan interventions. Can you reason with the CEO and give him honest feedback? Should you take your concerns to the board? Should you bail now? Here's some real-world advice, from every angle, should you find yourself stuck in the bouillabaisse under le poisson pourri.
For the Employees:
If there's anything you can do to help the rank-and-file—from arranging fair severance packages to pushing through overdue promotions and raises to advocating for an employee going through personal hardship—now's the time to do it. Staying true to your personal values will make the whole unfortunate situation seem a lot less unpleasant and, if you end up having to move on, you'll want to leave the best legacy possible.
For the Company:
Sadly, the best thing you can do is nothing. Any notion that the board will appreciate your tattling on the CEO, step in as concerned custodians, and save the day is the stuff of fairy tales. It's not their job to interfere with the daily running of the business any more than it is yours to narc on the CEO. Until they decide that he's costing them market share or getting into so much legal trouble that his vices outweigh his virtues, nothing you say will make a whit of difference.
For the CEO:
If things have really gotten this bad, there's a decent chance that the guy's in a lot of pain himself, so perhaps there is a way to get through to him. Can you figure out how to package the criticism in a palatable way? Can you do a 360 “on his team” and then coach him to manage “them” better? Guys like this are often anxious and insecure so feedback that's given in a calm and soothing manner using a sandwich-style typically works best. Try to predict their next move and offer constructive advice in advance: “John, I don't want to see you just picking a new person in engineering to fire because we've been missing our deadlines. That won't fix the underlying problem. I want to see you stand in support of the team and partner with them. That's the kind of leadership we need now and I know you can do it!” Believe it or not, that sort of approach can make a difference. But it also, of course, can backfire so go into it with realistic expectations and steel yourself for the sort of chilly reception that could mean the beginning of the end.
- Act with complete confidence. Projecting yourself in this manner can make the CEO take you more seriously and, if it doesn't work, you can be secure in the knowledge that plenty of people will be happy to hire you even if you get fired and the CEO badmouths you at parties and conferences. The old ad-agency adage "You'll never work in this town again" just doesn't hold anymore, not even in a relatively small place like Silicon Valley.
- Decide where you will draw the line and what price you are prepared to pay. One of the HR executives I respect the most refused to pull the trigger on an unfair termination and got himself fired as a result. This was at the beginning of the downturn so he ended up forgoing well over a million dollars in compensation since it took him two years to get another comparably high-paying job. And yet he says he'd do it again.
- Think about severance and start lining up documentation to support an executive-level agreement. Focus on protecting your stock options so they don't get Zynga'd. Yes, you can consult or take a new job right away but you might as well take a few bucks with you on your way out the door.
This reminds me of one of the best how-to-quit stories I've heard in a while. An SVPHR I know was working for a notoriously unethical CEO and decided to quit by going to a board member and explaining the reasons behind her decision. The board member—well aware of the CEO's character flaws—asked her to consider staying on for a month. She politely refused, informed the CEO about all that had transpired, and negotiated her severance with him. He was known as an unrepentant cheapskate but since she'd already told the board member what she'd be asking for (the same terms as a change-of-control event), he didn't dare try to push back. I view this as an ideal way to handle the situation because she didn't approach it as if she were tattling to the board and trying to get them to fire the CEO. She simply informed them of the situation and of her intentions, thereby forcing their hand as prudent fiscal custodians to help her get her severance negotiated without things getting too messy. It's an approach that takes some stones but if you've got 'em, it's a way to get yourself out of the soup with your dignity intact.
What have you done that has worked with a CEO gone bad? Let me know and I'll feature the best responses—anonymously, of course—in an upcoming edition of the newsletter.
QIs Skype discriminatory? I'm over 40 and feel that recruiters want to Skype me so they can see how I look or how old I am.
Stop being so sensitive! Skype just saves people money and is a more personal way to interview than holding a phone to your ear while staring at a wall. Your potential employer is going to meet you at some point so just deal with it up front. It's competitive out there and you've got to be your best at any age. Think about the typical perceptions people have of older workers (slow, low tech, stuck in their ways, weak) and fight those head-on. Your resume and LinkedIn profile should show energy, competition and accomplishments. Talk about the sports and philanthropic activities you do. Be in the best shape of your life. Get a new haircut. Practice short, disciplined answers. And another angle is this: older people can be perceived as clever, vibrant, and with a sense of humor. I find that these traits, layered on top of all the ones listed above, make all candidates attractive to everyone they meet.
QMy company recently went public so I'm thinking about quitting and becoming a consultant for a couple of years. How will that look on my resume?
It all depends. If you take off one year to ski, sail and “consult,” I'll be envious but I'll present you for searches. Take two years and my clients would laugh me out of the meeting. If you really will be doing some consulting, try to imagine what your resume will look like three years out. How will you get work? What kinds of projects will you have successfully completed? What kinds of clients will you have impacted? Realistically, how much expertise will you have gained when it comes to laws, technologies and trends? If you answer honestly and fear that your resume-of-the-future will not look better, tread lightly.
QBetween you and me, I'm overpaid. My base salary is almost 50% above what most employers would pay and my bonus (which pays out) is obscene almost to the point of immorality. The problem is that I hate where I work and it's killing me. I don't need your sympathy but please tell me how on earth I can get potential employers to take me seriously and know that I am sincere about leaving my current job? I try to get interviews but they all get cancelled when people see my compensation. I'd gladly accept less just to not have to work here but no one ever believes me.
The best way to show your sincerity would be to quit. That will bring your current compensation down to about zero-point-bupkis, which will easily convince employers that you're serious about needing a job.
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