Editor's Note: I recently met with two separate CEO's about the outcome of not managing expectations which led to mismanaged communications. Enjoy. As always, you can find all my blog posts from 2013 to the present on my website at http://stevemarshallassociates.com/steves-blog/
I had lunch with a CEO last week, (whom I will call Tom,) who announced, as he sat down at the table, that he had been walked out the door of his company the day before by the Board Chairman. Prior to this lunch, I had neither known Tom very well, nor his situation, so I queried him about the circumstances. He then proceeded to lay out the succession of steps, from his perspective, that led to his downfall. From his viewpoint, he felt that he had spent the previous 2 years of his short tenure at the company, laying out and executing a very comprehensive and complete strategy for this company to avoid acquisition and to thrive independently. (Coincidentally, he was originally hired to help them avoid a takeover.)
As I listened, he spoke about the management theories he had applied, including the use of outside industry expert consultants, teambuilding strategies for the employees, and the application of his extensive and relevant education in his M.B.A program some 10 years before.
All of this still left me without the answer to the outcome of the previous day's events, so I finally asked him, "Why did they let you go?" He is convinced that the eight board members/shareholders were led astray by the senior person on the board and within the company that was able to browbeat the remaining seven members into believing that they were headed down the wrong path and that they should be seeking an offer from the highest bidder. As a result they certainly didn't need Tom to do that, so why lessen their cash flow with his expense?
I mostly listened during the recounting of his story; congratulated him on even showing up for our lunch considering the shock of the previous day's events, and advised him to take some time before jumping back into another position. I inquired whether he had a good support network of family and friends - he does - and gave him a preview of what was coming after the adrenaline of being fired wore off; i.e., the feeling of rejection, lowered self worth, etc. The offset to this, I advised, was to look for and do positive things that contributed to self-affirmation and hopefully self-enlightenment before he became active in the job search again.
Afterward, with some further thought, I came to the following conclusion as to what I think really happened that led to Tom's departure. While Tom had communicated what he believed was the correct path for this company with perfect clarity to his board, I am convinced that they were never really committed to it as Tom did it all for them; the planning, the numbers, and the execution, to the point, insofar, that, when they saw they were at a pivotal change point going forward, they got scared and retreated to what was familiar and comfortable. I think Tom missed a cue (or two) during this 2 year period where he was so focused on doing everything right, that he missed doing the right thing. That right thing was slowing down the process and making sure everyone was with him during a major shift in the business model. In other words, his expectation was that, while 50 mph wasn't fast enough, theirs was that even 1 mph was too fast. During periods of major change in any business, there are four items that must be adhered to (from 'The Advantage' by Patrick Lencioni):
- Build a cohesive leadership team;
- Create clarity;
- Reinforce clarity; and,
- Over communicate clarity.
I believe Tom was so focused on the destination that he neglected to bring everyone on the board along with him during the process. He had also never forged any relationships beyond the professional realm with his board members, which made it easier for them to chuck him out when he was no longer perceived to be needed. Thus, both expectations and communications had diverged at #1 above, so the opportunity to create and reinforce clarity was never there. Read on to #2 where there is a better ending.
This CEO is a client who took over the reins of the largest independent medical group in the state 6 months ago, following a fellow who had been there for 25 years. Being new to his position and the city, I advised him to set out to meet as many people within the company and the community as possible to get their viewpoint on his new place of employment. I also suggested that he meet with competitors as well as current customers to explore potential collaborations and new directions for new products and services.
His meeting with the CEO of one of the hospitals in his area produced the beginnings of both a mismanaged communication and expectation. When my client (I will call him Nate) suggested that he was going to reclaim some space that had been rented to that hospital in his medical offices, the hospital CEO took affront and immediately after that meeting called one of the medical group's board members (one of my client's bosses) to complain about Nate's abrupt manner. The board member kept this to himself until I happened to meet with him to discuss strategic planning and he unloaded this story on me. I asked him whether he had called Nate to discuss the matter and he replied, "No, but I have shared this situation with my fellow board members." I urged him to have a conversation with Nate as soon as possible and left the meeting stating that I would pass along this communication if he didn't. He did, but it created such a big flap with his peers on the board, that by the time Nate heard about it, board members were even wondering if they had made the right decision in hiring him!
When I met with Nate, he was furious at the board member for not calling him about the matter until I asked him, "Why do you think that is?" He said he didn't know, but I countered with, "How well do you know him?" (I'll call him Matt.) I suggested that a critical part of his new role, in his new position, in his new community, was to get to know his bosses on a social level to build trust, affiliation, and unity for the future when really difficult decisions presented themselves.
Nate embarked on a round of individual dinners with his seven board members and their significant others, and he met with the hospital CEO to create clarity around his earlier remarks and plans. Nate is doing well in his now not-so-new position and looking forward to taking his board along with him as they face the same future as Tom's company did, but with a happier ending for Nate.
Next Week: The Schism in US Health Care