Should the CEO Be Fired? That Depends

In the wake of multiple problems splashed across headlines worldwide, speculation has run rampant that Uber co-founder and CEO Travis Kalanick may be on his way out. Issues include claims of sexual harassment at the company, massive loss of users and even a widely circulated video of the billionaire getting in a fight with a driver over fares for black cars.

In an article on Mashable, 5 Ways to Save Uber From Itself, the number one suggestion to save the global company is to fire Kalanick. “If you cut off the head, the body can function … at least temporarily,” the writer claims. Other business analysts claim that while he was once the ride-sharing company’s biggest asset, he is now their biggest liability.

But is firing the CEO the best solution? I advise companies that the decision to fire a CEO is never a simple one and should not be done in haste. There are several factors to take into consideration. And firing a CEO can often set the company back, especially in a time of difficulty.

A recent article in Fast Company, “Why Uber Shouldn’t Fire Its Bad Boy CEO,” made the case that Uber may actually benefit from keeping Kalanick in the CEO’s chair.

The article references this article on the Harvard Business Review, “Holes at the Top: Why CEOs Firings Backfire,” which explains why CEOs are often swiftly shown the door when times are bad.

“When companies do well, their CEOs are showered with money, perks, and adulation. When they do poorly, they’re given the blame—and the boot.”

The writer, Margaret Wiersema, is a leader in corporate strategy and CEO replacement and succession. She studied all instances of CEO turnover for a period of two years and found most CEOs were replaced not by the board after careful thought and deliberation, but at the insistence of investors upset over returns.

She compared performance of the companies from two years before a dismissal to two years after, compared performance with industry averages and then compared the performance of companies whose CEOs had retired as opposed to those whose had been fired.

Wiersema came to the same conclusion that I have after decades of working with companies in turmoil. “Most companies perform no better – in terms of earnings or stock-price performance – after they dismiss their CEOs than they did in the years leading up to the dismissals. Worse, the organizational disruption created by rushed firings – particularly the bypassing of normal succession processes – can leave companies with deep and lasting scars. Far from being a silver bullet, the replacement of a CEO often amounts to little more than a self-inflicted wound.”

I’ve seen companies where CEOs were fired for far fewer infractions. For example, perhaps the CEO didn’t make the numbers for a year or two. The business was still profitable, but it was below expectations and not as profitable as projected. Those CEOs often get fired within 3-6 months, rarely leading to the increase in profits that was hoped for. As for Kalanick, while Uber may be in a public relations crisis, and thousands of users have protested conditions at the company by following the instructions on the social media hashtag #deleteuber, the company is still growing. The head of North American operations claimed growth during the first 10 weeks of 2017 was better than the first 10 weeks of 2016. So maybe he is here to stay. At least for now.

Firing a CEO is not an easy or simple decision and shouldn’t be rushed, especially if big changes are being made to turn a company around. Those changes can take time.

Ultimately, it’s up to the board of directors. They have to make the decision based on a number of factors. But more often than not, it pays to keep the CEO because he can be a part of the solution, even if he was originally perceived as part of the problem.

My book “How Not to Hire a Guy Like Me: Lessons Learned from CEOs’ Mistakes,” is now available as an ebook.

4 Ways to Attract Millennials to Your Company

 

Today I am happy to introduce a guest blogger. Chris Butsch is a Millennial Happiness Expert, speaker and the author of the upcoming book The Millennials Guide to Making Happiness.

Millennials now outnumber Gen Xers and Boomers in the workplace, and with the improving economy, they have unprecedented choosiness in who they’d like to work for. And make no mistake, Millennials like to shop around. The average job tenure in 2014 was around 4.5 years, the lowest since the 1970s. For Millennials, it’s less than half that. And as the Boomers and Xers retire, a company’s survival will depend on its ability to attract America’s next working generation.

While interviewing dozens of young professionals for my upcoming book The Millennial’s Guide to Making Happiness, I took the time to understand why they love their current employers, or what they’re looking for in their next venture. What’s the #1 most-desired perk? What are the red flags? Around 65 percent of employers report struggling to hire and retain Millennial talent, so here are 4 ways to join the 35 percent.

1)   Have a Clear Purpose and Mission Statement

As children of the digital age, we Millennials are obsessed with Impression Management. Our jobs become part of our identity, so we’re naturally attracted to companies with missions we can get behind. Ninety-five percent of us say a company’s reputation matters strongly to us, so it’s unlikely we’ll work for a company whose Google search reveals images of Communism on the first page, like Comcast.

Having a clear, concise mission statement not only helps Millennials understand your company’s goals, it gets us excited to help you. Ensure your mission statement is broadcasted everywhere, not just your website. Which brings us to tip #2.

2)   Know Where Millennials Are Looking Online, and Be There

While Millennials spend less time researching each employer (12.4 hours compared to the 25.9 older generations spend), we tend to look in more places and for different things. Most companies have online information ready for the scrutinizing Boomer (i.e. health plan and 401k), but few are truly prepared for the investigative Millennial.

We’ll go to Facebook, Twitter, and Instagram to see if you’re there, and if you are, what kind of content you post. These platforms are a way for companies to show off their work culture, and companies who post a couple of times a week content like updates, employee praise, or helpful articles, win Millennials. For good accounts to model after, visit the Facebook pages of The Nashville Entrepreneur Center and Carvana.

Millennials will also see what former employees are saying about you, and our forum of choice is Glassdoor. We make up just over a third of the workforce, yet account for nearly half of Glassdoor’s traffic. We’re reading and writing thousands of reviews for each other, and Millennials considering one company as an employer are sure to come across this one:

Good reviews on Glassdoor are crucial to recruiting Millennials.

Good reviews on Glassdoor are crucial to recruiting Millennials.

When I interviewed for my first job at Epic Health Systems as a Project Manager, I felt nervous about the alarming number of Glassdoor reviews citing poor work-life balance. I actually printed some off and showed them to my interviewers to ask their honest opinions, which they graciously offered. I got the job, but had Epic scored lower than a 2.5 on Glassdoor, I honestly wouldn’t have flown up for the interview.

If your company has no Glassdoor reviews, consider reaching out to former employers who are likely to leave you positive words.

3)   Update Your Technology

Millennials live on the cutting edge, constantly optimizing our lives with apps, trackers and gadgets. We’re the most likely to order an Uber on a SmartWatch and get excited when a wall socket has a USB outlet.

“Millennials don’t think of technology as an extra,” writes Art Papas in Forbes. “They expect to be able to use it in all aspects of their lives.” As such, we love employers who also keep up. Productivity software, the latest Microsoft Office, and fast internet beckon tech-savvy Millennials, while aging beige monitors and fax machines make us question the company’s forward momentum. But above all, Millennials love laptops at work because they often come paired with another item on our workplace wish-list: flexibility.

4)   Pay in Dollars and Freedom

On average, Millennials get married seven years later than our parents did in the ‘70s. We place huge value on international travel, and are the least likely to own a car or a house. Surely part of our changing mindset is due to our tepid economic predicament, but mostly we wait to “settle down” because we value our freedom.

According to Fast Company, Millennials place more emphasis on work-life balance than other working generations, and Bentley University found that 77 percent of Millennials believe flexible work schedules boost our productivity. We’re not asking to work less; rather, we just want to get more done in the same time or the same done in less time.

And according to Ellen Ernst Kossek, author of CEO of Me: Creating a Life that Works in the Flexible Job Age, we might be right. “Research shows that employees are healthier, experience less stress, and are more productive and engaged when they effectively make choices about how, where and when they work.” Which explains why more Millennials look at the 9-to-5 and ask: why?

As for vacation, my friend from Switzerland once asked me, “How much vacation do you have?” When I told her 10 days, she balked. “Only 10 days left? Wow, where all have you been traveling this year?” Thanks to globalization, more and more Millennials are picking up on our country’s deplorable standards for time off. And since we highly value freedom and travel, we’ll work hard for companies with forward-thinking strategies.

Virgin, Best Buy, and Netflix offer unlimited vacation time, while startup powerhouse Evernote offers a bonus to employees who take at least an entire week off. While these policies sacrifice in-office time, they boost retention and employee happiness, creating a clear return on investment.  Research shows that prolonged work-a-thons atrophy our productivity and ability to cope with stress, so Millennials especially are more likely to burn out of jobs that don’t provide adequate time off.

Plus, affording your employees more vacation time and flexible work hours creates a quieter office, so you’ll kill two birds with one stone.

2014: A Look Back at Some Intriguing Stories

We live in interesting times. Here are some entertaining stories from 2014. Not all of them involved big money. In fact, a lawsuit was threatened over $4, while a billionaire declared money to be a great pain.

It was the year that a Chinese man nicknamed Crazy Jack Ma became one of the richest people in the world, an amazing innovation in plane design was introduced, a car service becomes indispensable in many cities but is banned in several countries    and a few funny food fights made the news. We even found out about a secret Internet.

Although he couldn’t even get a job with KFC in his hometown of Hangzhou, China and instead made $15 a month teaching English at a local college, Jack Ma is now one of the world’s richest men.

The founder of Alibaba, a business-to-business online platform, he saw an opportunity with the rise of the Internet in China. When Alibaba went public in September, raising $21.8 billion, it was the largest global IPO in history. Ma’s net worth is estimated at $23.2 billion, although he’s not basking in his wealth, calling it a great pain.

This was the year Uber, the car service, became available in more than 50 countries and 250 world cities. The company recently raised $1.2 billion with investors valuing the company at $40 billion, one of the most valuable private companies on the planet. Five years ago it was just an app.

Its success has come with controversy, however. It’s been banned in Germany, France and some cities in India, while taxi drivers have protested its presence in London. Thailand, Spain and the Netherlands have ruled it illegal and protests have been filed in other cities. Some users have deleted the app after expressing concerns over privacy.

A windowless plane, which could be flying our skies in a decade. Photograph: Tomasz Wyszo/mirski/ww.dabarti/CPI

A windowless plane, which could be flying our skies in a decade. Photograph: Tomasz Wyszo/mirski/ww.dabarti/CPI

Speaking of transportation, we won’t need a window seat for a view when a new kind of aircraft is introduced — one without windows. The Centre for Process Innovation, a U.K.-based cutting edge technology association, has plans to create an aircraft where the windows will be replaced by full-length screens with full views of the exterior. The new design will significantly reduce the weight of airplanes, which will reduce operating costs. Maybe they’ll be able to afford to bring blankets back to coach.

And speaking of planes, this recent story of taking customer service standards too far really amused me. Cho Hyun-ah was incensed when a senior flight attendant for Korean Air Lines served her macadamia nuts in a bag rather than on a plate.

The daughter of the chairman of the airline and also head of in-flight services, Cho ordered the plane to return to the gate and threw the senior flight attendant off. She was forced to resign her position and I don’t think Daddy was any too pleased with her when the story went viral. He apologized for her foolish behavior and asked for the public’s forgiveness.

Then there was the story of the associate professor of the Harvard Business School. Seems Ben Edelman was enjoying take-out from a nearby Chinese restaurant when he discovered something horrifying. Something he had to threaten legal action over. Was it a rodent part in his food that caused such anguish?

No, it seems his despair was over his bill. He had been overcharged $4. That led to an increasingly aggressive and ridiculous series of emails where the owner of the small family restaurant explained that the prices had not been updated from their website. Citing a Massachusetts statute, Ben demanded “triple damages for certain intentional violations.”

He wanted $12 back. And threatened to hire an attorney.

The kicker? He teaches in the Negotiation, Organizations & Markets unit at Harvard. Seems to me his negotiating skills are a bit lacking. But he did admit the food was delicious.

I was certainly in the dark myself about the “Darknet,” the dark markets on the Internet. Seems you can buy drugs, weapons and even hire a hit man, all from the comfort of your home. European law enforcement officials, the FBI and Department of Homeland Security announced a crackdown in November, shutting down more than 410 hidden services.

Here’s to a wonderful 2015 for you and your loved ones. And may we all look forward to many more entertaining stories in the coming year.

And some of these things actually keep me in business.