By Corey Ferengul
Firing a senior executive is one of the toughest decisions a CEO will ever have to make. It's not just about performance metrics—it's about people, culture, and how the decision affects the entire organization. Unlike other employees, senior executives are key players in the company’s leadership, and when it’s not working out, the fallout can be significant.
In this article, I’ll walk through the steps I’ve taken when faced with this decision and share some insights from my co-host Mike Shannon, who has also navigated this difficult process.
1. Recognize the Signs Early
The first step is recognizing when it's time to make a change. This is often one of the most difficult parts because executives have resumes packed with accomplishments, and it can be hard to admit when someone isn’t the right fit. But as Mike mentioned in the episode, "It's really hard to identify the problem early enough". Often, by the time you realize it’s not working, you’re already behind.
The signs can come from different areas:
Cultural mismatch: If the executive doesn’t fit with the company culture, you’ll hear it from their team.
Performance issues: Results matter. If the executive isn’t delivering on key metrics, the financials will reflect it.
Leadership style: Sometimes, they’re either too much of a “doer” and not enough of a leader, or they’ve become so removed from the team that they’re out of touch.
Once you’ve identified the issue, it’s time to act. As I mentioned in the episode, “If you really think it may not be the right person, start thinking about the plan”.
2. The Plan: How to Approach It
Once you’ve decided to make a change, having a plan in place is critical. Firing a senior executive isn’t like firing other employees. There’s a much larger organizational impact, and the process needs to be carefully managed.
Decide the replacement strategy: Are you going to promote from within, restructure the executive team, or search externally? In some cases, firing an executive is an opportunity to reorg the team entirely.
Communicate with the board: Before making the decision public, start by informing the board. “One of the first questions they’ll ask is how you plan to handle it and what it means for the financial model”.
Timing: Whenever possible, have the new hire lined up before making the change. However, if the executive is doing harm or causing other leaders to leave, you might not have the luxury of time.
Mike raised an important point about the optics: “When you bring in a senior hire, there’s often a big celebratory announcement internally and even externally. If it doesn’t work out, it can feel like all of that credibility comes crashing down on you”. But it’s better to address the problem head-on than to let the damage spread.
3. The Conversation: Doing It Right
Firing anyone is hard, but firing an executive requires tact and professionalism. Here’s my advice for handling the conversation:
Don’t outsource it: You, as the CEO, should handle this conversation directly. It’s not something you delegate to HR.
Be clear and concise: Provide the executive with the reasons for the decision, but don’t turn the conversation into a long performance review. They deserve the respect of a straightforward explanation.
Treat them well: Even though it’s a tough conversation, treating the executive with dignity will pay off in the long run. Mike and I both agreed that how you treat people on their way out can impact your reputation as a leader.
4. Managing the Fallout
After the executive is gone, the rest of the organization will want to know what’s happening. A key part of the process is controlling the narrative and keeping morale intact.
Announce the change internally: Be transparent, but keep the messaging professional. “We’ve outgrown the executive’s skill set” is a better way to frame it than pointing to personal failings.
Communicate the next steps: Whether you’re promoting internally or bringing in someone new, the organization needs to know what’s next. You don’t want people feeling uncertain for weeks or months. As I said in the episode, “You want it to be 48-72 hours of ‘what just happened’ followed by ‘what are we doing now?’”.
Final Thoughts
Firing a senior executive is never easy, but sometimes it’s necessary to move the company forward. The key is to act decisively, communicate clearly, and have a plan in place. As a CEO, you’re not just responsible for making the hard decisions—you’re responsible for leading the organization through them.
-Corey Ferengul
Co-Host of Opening the C-Suite
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