- The sacking of a CEO usually isn’t the big crisis it first seems to be.
- Most organisations can do without a leader for short periods of time.
- A new boss will arrive soon enough.
Michelle Guthrie’s sudden removal as managing director of the ABC follows a pattern of high profile departures over the past few months, including Board Chairs and CEOs of major corporations — and a Prime Minister. Typically, these weren’t planned separations, even if the writing was on the wall in large, bold font.
What do you do when this happens? Or when some other unexpected crisis such as the financial services royal commission throws your organisation into crisis?
In normal operating conditions, qualities such as inclusiveness, listening and empowerment are at the top of the list. But if there’s a genuine crisis, the priority is to act: to take charge and provide very clear direction. Don’t sit around and hold a listening circle. Be like a war-time commander.
Some people are ideally suited to crises and are perfect to install at such times. Winston Churchill, Britain’s leader in WW II, is a classic example.
The problem sometimes is that such leaders see how effective they are in that situation and believe that it is the ideal style for all situations. It isn’t. Once the crisis is over, the style needs to revert to a more constructive and sustainable approach. If you can’t or don’t change, you may find yourself, like Churchill himself, as the next involuntary departure.
However, is the sacking of a CEO or senior leader a crisis? Typically, no. It might seem like a big deal, but it’s generally not a crisis in the way that, say, the Queensland floods or Telstra’s network going down might be. It’s probably not as significant as a royal commission either.
Why is this? Because most organisations are set up in ways that make the long-term role of the CEO pivotal, but the short-term role much less important. If they didn’t, they wouldn’t be able to cope with CEOs taking annual leave, getting sick or taking significant overseas travel for work.
If you are the ABC, for example, you are perfectly capable of meeting all of your delivery commitments for news and entertainment whether or not you have a CEO.
Therefore, if you are the acting leader in such a situation, crisis management is not required. You just need to make it clear that, for the present time, business-as-usual remains business-as-usual. That is not, of course, to take away from the significant role of the CEO. It’s simply to recognise that, in most cases, their departure is not a crisis and shouldn’t be responded to like a crisis.
The biggest issue will be that, even if operational activities are unaffected, the organisation may now be plagued with doubt, fear and suspicion.
People may wonder what it means for the survival and direction of the organisation, or for their own role — especially if their job was closely tied to strategic priority that was a pet project of the sacked boss.
Factional camps may be emerging, related to either relationships with the former leader and/or ambitions for the roles in the new regime.
If you’re a leader in this situation, you need to recognise that lingering uncertainty and negative emotions such as fear, anger and cynicism are poison for productivity and business performance.
Every hour that two people spend gossiping about the situation is two lost hours of activity focused on delivering customer value or some other business outcome. Every hour that someone feels paralysed by uncertainty is an hour that they are working far below their potential. Every day that good people start thinking about updating their CV and looking elsewhere is a reduction in your total business capacity.
If the organisation has been placed in a caretaker role (if a search for a new CEO has been announced), you can’t over-stretch your authority but you do need to provide leadership.
What all of this means is that, if you’re an acting/replacement leader, in addition to maintaining calm and keeping the ship on course from an operational point of view, you need to replace the fear, anger and cynicism with urgency, focus and optimism.
You can do this by: being visible around the organisation; quickly and accurately clarifying the answers to the questions that may be causing greatest uncertainty or anxiety; reinforcing the external priorities (e.g. delighting customers, outperforming competitors, innovating to meet changing markets); communicating wins and progress, even if relatively minor; recognising and rewarding those demonstrating the right behaviours; and providing a predictable, disciplined operating rhythm.
This doesn’t mean pretending that the boss hasn’t been sacked; it just means keeping the event in proportion to its actual impact on the business. This leadership is important not just for the acting/replacement leader, but for anyone with a leadership role in the organisation. In this kind of situation, you will make dozens of decisions each day that can either put the organisation back on track or stoke the fears and doubts. Choose wisely.
And if you’re one of hundreds or thousands of frontline employees in an organisation that’s going through all this? If it’s a genuine crisis, then respond accordingly. But in the majority of cases where it’s not, just get on with your job. You’ll have a new boss soon, and you’ll probably find that the organisation is still intact.
(Anthony Mitchell is the co-founder and Chief Potential Officer of Bendelta, focusing on designing organisations and leaders for the cyber-physical age. He is also Chairman of the Aurora Education Foundation, providing accelerated development opportunities for Australia’s most promising Indigenous scholars, and a member of the Amnesty International 2020 Council.)
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