Should you fire your CEO as part of the company’s next RIF?
Blog: Brian's Blog - Enterprise Strategy, Architecture and Management
It’s the next corporate off-site, the stock price is down, revenue is down, and margins are shrinking. The new CEO has had approximately one to two years in tenure. His recommendation to the board to “save the company and boost stock price” is to rebalance the workforce aka Reduction in Force (RIF). After several years of building up the workforce, capabilities, knowledge, and skills this seems the logical thing to do from his perspective. Lay off workers and get newer, cheaper employees. This is after stating its employees are its most important asset.
But is it? A decade or so ago several Blue-Chip corporations did such. Stock market reacted, as it does quickly with a momentary boost. However, as the years went on, the corporation’s product quality, customer service, and eventually its competitiveness dropped.
Solution? Hire back seasoned professions they laid off. Only problem, those employees when on to competitors, became competition, or now will cost the corporation more to hire back and will likely not have the same loyalty they once had (i.e., it’s now just a job not a career; they’ve learned from millennials all too well).
Given this state of affairs, should stockholders and the board consider laying off the CEO as part of that RIF also? Consider the statement: “Employees are our most important asset”. If so should the CEO be judged rather harshly for losing a large percentage of the corporation’s assets and value? If intellectual property is really of value as inferred tens of thousands or possibly millions of dollars have walked out the door. Would an executive at any company still be in place if they allowed a factory to be sold off for pennies less than what could be sold on the open market?
In the declining age of Superstar CEOs maybe a rating/tracking system is needed similar to those in professional sports leagues to see if those CEOs really do add value? Just a thought to ponder as I consider where to invest my retirement funds…
Filed under: Strategy, Systems Thinking 
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