While I could write the equivalent of 50 Ways to Leave Your Lover when it comes to variations on how to get fired as CEO, the purpose of this post is simply to discuss three things CEOs can say to their boards that will perk their ears and get them to start asking questions that could lead to the CEO’s termination.
Here are those three things:
- “I’m getting tired of running the company.”
- “I’m running out of ideas for how to fix our core problems.”
- “I think we need to sell the company.” [1]
First, let’s note that it is much harder, sometimes actually impossible, for a founder/CEO to get fired than a hired (aka, “professional”) CEO. The former have a powerful combination of moral authority, share ownership, and/or contractual protections. The latter — even if they joined very early and built much of the company themselves — will never be seen as founders, but simply employees who, in the end, are replaceable much as anyone else.
While it’d be stretch to call hired CEOs “goldfish” — as one of my old CFOs used to refer to SDRs [2] — in the end, you’re either a founder or you’re not. So this post is largely for hired CEOs, but it should nevertheless be of interest to founders as well.
While it’s probably somewhat self-evident, what’s so scary about the three above statements?
- They each say the CEO is effectively giving up on solving the company’s challenges
- They are not easily fixable by the board — a stock grant, a pat on the back, or a bonus program isn’t likely to fix anything
- To the extent you define the CEO’s job as “to get what matters right,” they each signal that the CEO is no longer interested in doing it
And scariest of all, each statement is a bell that is impossible to unring. Think: Oh, just kidding, I have tons of ideas. Or, oh, I was just messing around, I don’t think we should sell the company. It was just a modest proposal, in the Jonathan Swift sense. Sure.
It’s like saying to your spouse, “hey honey, I think we should start dating other people.” It’s very difficult to roll that back.
This means the CEOs should think very carefully before making statements like these. Because once they’re said, they may be stuck somewhere in the board’s mind forever:
- We keep missing quarters because Mary’s tired and not pushing the company.
- We’re only shooting for moderate growth because Bob’s out of ideas for how to grow more quickly.
- James isn’t investing for growth because he wants to sell soon and is trying to juice up profit.
Why? Because the CEO told us so. If I were a bell, I’d go ding, dong, ding, dong, ding.
Now, it’s certainly possible to try and walk these statements back: “oh, I was just tired that day because I had some personal stuff going on and I was sick.” But they’ll always be there in the back of the board’s mind. Think: Maybe Joe said that because Joe meant it.
So the best thing to do is never say these things in the first place. Not unless you’re very sure how they’ll land and ideally have socialized them 1-1 in advance with key board members. Or, if you decide to say them anyway, at least understand the potential downstream effects. Otherwise, you may find that a simple, off-the-cuff comment may haunt you for some time.
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Notes
[1] The notable exception here is a PE-backed firm where the company has achieved its target financial profile and ergo hopefully its target valuation, and it really is time to sell. In VC-backed firms, where the general goal (and belief that underlies the VC’s investment thesis) is to “shoot the moon,” saying you want to sell can be seen as betraying the mission — especially if the company is performing well — and/or if the VCs still believe in the company’s bright future. Saying you want to sell before there is consensus that hope is dead can be seen as a premature admission of defeat.
[2] On the theory that they often perish, and if you find one floating in the bowl, you just get a new one.