7 Ways to Get Your CEO Fired

Rob Enderle April 15, 2013
7 Ways to Get Your CEO Fired
It's hard to train good CEOs. It's much easier to set them up for failure. Follow these seven steps and your chief executive officer is bound to be out of a job sooner or later.

Last week, I covered the seven habits of highly successful CEOs. With this week's firing of J.C. Penney CEO Rob Johnson-the man credited with creating the massively successful Apple stores-I figured it's time to talk about what gets CEOs fired. 
Over the last decade the folks at Hewlett-Packard seemingly got this down to a science, so I'll be referencing HP's recent history a great deal. But we can also pull material from recent examples, ranging from Yahoo to the situation at JCP, which is how Johnson unsuccessfully rebranded J.C. Penney.

The CEO Job: It's Yours, You Can Have It

Let's start with what makes a CEO different than any other employee in a large company. Unlike every other employee, CEOs doesn't have a manager. Rather, they have three power groups to keep happy: Investors, who are represented by the board; customers, who control revenue, and employees, who control production. Even politicians may not have to deal with such a diverse group that can materially impact their success.

Interview: How Effective Leaders Can Make Principled Decisions When It Matters Most

These days, CEOs command salaries that can be several times that of the next employee down the line. They're generally protected by contracts and have their salaries set by the board's compensation committee, which isn't measured by this decision and can use this number to raise its own executive salaries.

CEOs can delegate most work to others. Hours spent on the job can range from massive commitments by some to several hours a month for others. There is little formal CEO training, and the skills needed to do this job successfully are different than anything else a CEO has ever done. While some are mentored into the job, this practice is more of the exception than the rule, which really stacks the deck against the new CEO.

It doesn't help that CEOs are often surrounded by god-like expectations, where folks expect them to wave their hands and accomplish amazing things, but they are human, bound by physical and organizational limitations that would make even a god unable to do much of what stakeholders expect. It's not unusual to see CEOs go through several marriages, have issues with children and experience unhappiness in retirement as a result of losing the power and status that come with the job. Bill Gates is one of the few CEOs to escape what's often a horrible end to a successful stint as a CEO.

I know a lot of CEOs. There are very few whom I envy-and none I'd ever want to replace. Sometimes the firms they work for make their jobs impossible. Sometimes, though, they are their own worst enemy. Here are the seven things that most often get a CEO fired.

1: Allowing, Promoting Micromanagement

Micromanagers should never be CEOs of large companies. This is because they are simply too complex to micromanage. Steve Jobs is the perfect example of what can happen when a micromanager stays too long. Yes, he executed masterfully but the level of stress and commitment he put upon himself for an extended period of time clearly shortened his life; even when he found he had cancer, he couldn't extract himself from the job to focus on his health.

How-to: Leadership Lessons from Apple CEO Steve Jobs

If you want to destroy a CEO, then engage him at all levels of the company, make him worry about the little things and defer all decisions to him. The resulting stress should burn him out and force him to leave for health reasons.

2. Making CEOs Executive Chairman

You'd think CEOs would know better by now that this can lead to a lot of bad things. Take a job that has few controls and little day-to-day oversight and add to it the authority of that job's one boss and you have a recipe for career suicide.

It's bad enough when a CEO battles his chairman. Remove the chairman, though, and the risk of a CEO acting badly goes up exponentially because he, in effect, becomes his own boss. Often an experienced chairman can mentor a CEO and keep him from making avoidable mistakes.

CEOs love to take over the chairman job because they feel it gives them power, but instead it generally gives them the rope they appear to gleefully want to use to hang themselves. Of HP's four dismissed CEOs, two made themselves executive chairman first. Mark Hurd was likely poster child for this, choosing an unfortunate hire as his "hostess"-a woman he'd seen in adult-themed movies. Executive oversight from someone who wasn't thinking with his hormones might have prevented this.

3. Letting CEOs Run Wild

Even if a CEO isn't chairman, the job can still lead CEOs to believe that rules simply don't apply. Even Jobs was guilty of this; early in his career, and without proper authorization, had his stock options backdated; this nearly cost him his job. Meanwhile, HP's Carly Fiorina and Mark Hurd both lost their jobs largely because they felt they were different, a belief fostered through the use of company jet, exclusive perks and a lack of board oversight.

Tips: How to Spot a Toxic Boss
Blog: How Horrible Bosses Drive Their Best Workers Out the Door

Speaking of hormones, affairs are all too common among CEOs who think they're invincible. I've seen CEOs get fired for having sex with employees on fire escapes or hiring a perspective mistress.

Generally a CEO who feels that rules don't apply to him will learn this the hard way, with devastating results. CEOs rarely come back from such a catastrophic end.

Source: CIO.com