Lemon #45. How to an executive (2nd part)
While reading ‘The hard thing about hard things’ from Ben Horowitz, we learned about how to fire an executive:
- Step 2: Informing the board
Keep in mind that your choices are: a) alarm the board or b) enable an ineffective executive to remain in her position. While choice a) is not great, it’s a heck of a lot better than choice b). Leaving a failing leader in place will cause an entire department in your company to slowly rot.
You should have three goals with the board:
- Get their support and understanding for the difficult task that you will execute. Make sure they understand the root cause and your plan to remedy the situation.
- Get their input and approval for the separation package. It takes about ten times longer for an executive to find a new job than it does for an individual contributor.
- Preserve the reputation of the fired executive: You don’t make yourself look good by trashing someone who worked for you. A mature approach to this issue will help keep the board confident in your ability to be CEO. It’s also the fair and decent thing to do.
- Step 3: Preparing for the conversation
After you know what went wrong and have informed the board, you should tell the executive as quickly as possible. I recommend scripting or rehearsing what you plan to say so that you don’t misspeak. The executive will remember the conversation for a very long time, so you need to say it right.
Three keys to getting it right:
- Be clear on the reasons.
- Use decisive language: do not leave the discussion open. It’s a firing. Use words and phrases like «I’ve decided» rather than «I think».
- Have the severance package approved and ready. Once the executive hears the news, she will stop caring about the company and its issues; she will highly focused on herself and her family.
Finally, the executive will be keenly interested in how the news will be communicated to the company and to the outside world. It’s best to let her decide.
Ben Horowitz @ The hard thing about hard things.