- Posted by Gavin Pommernelle
- On August 1, 2012
“Passed Over for CEO Role, Ross Levinsohn Exits Yahoo” (adage.com)
“Yahoo! number two exec quits after passed over” (Times LIVE)
How many times have you seen this happen, especially in senior appointments? What is the real cost to a business, apart from the often extremely high severance? Is it inevitable or is there another way?
I will not comment on this specific Yahoo situation, as the circumstances would be pure speculation. It did make me think about situations that I had experienced and been a part of as a senior HR executive of many years what that experience has taught me.
There are normally a myriad of factors influencing the decision for the unsuccessful executive to decide to leave or not. The same applies to the new leader in deciding what role the executive should or should not have as they take business forward.
The unsuccessful executive
It is often assumed that their decision to leave is purely ego based. That may be so on occasion, however, my experience is that it is by far more related to their conclusion that there is no future career growth available in the company.
I’ve heard common phrases such as: “If I didn’t get the job now, why would I be good enough in the future”; “The new leader wants their own people around, I’ll simply be an uncomfortable presence for them”; “I don’t have time to wait years until the new leader moves on”; etc.
The new leader
From this perspective, it is assumed that they will see the unsuccessful executive as unhappy and demotivated by the decision and that they will disruptive or resistant to change. They often do not know the person, as they are new to the business, and so rely on other people’s perspectives and assumptions about what they are looking for in their leadership team.
What is common in these perspectives is that they are all assumptions. They are seldom based on open, clear, and honest dialogue. This dialogue starts right at the point of the executive becoming a candidate or being appointed into an interim role – with the search committee.
I have seen very costly mistakes from letting an executive go when their skills and experience were very important to the business. I have seen the same when the decision to hold on to them “at all costs” was based on internal dynamics rather than sound business sense.
Use these points before deciding of there is or is not a future within the business for the unsuccessful executive:
- Be clear about the interim role – what are the priorities; why is the executive right for it; how does it differ from the permanent role; how does it fit in with the executive’s career development plan?
- Be open about the appointment decision – why was the executive not successful; what does that mean for their future career opportunities; is it feasible to address capability gaps and how?
- The new leader to do their own due diligence on the executive – get to learn to know them personally; look at factual information about their capability and performance; decide in the context of the business strategy and leadership team required.