IMA Analysis

Tuesday October 22, 2019

Time to let go

Author: Adit Jain, Editorial Director, IMA India

Letting go of a high performer is a hard call to take and more so by the board of a company for its chief executive or for a top performer in a senior leadership role. But when circumstances are compelling, then allowing matters to linger is the worst option on offer. Still, boards often hum and haw, hesitant to risk the severe step, in fear of customer and market reactions and perhaps the threat of a slide in the stock value. Equally, getting rid of high performing business managers is arduous and consequently avoided. A decision to fire a senior member of the company’s leadership team, research suggests, should be based on the following considerations: First, there is an unfixable fit between the manager’s skill sets and the needs of the company; second, the manager disrespects the company’s core values; third, there are good replacement options.

A key issue to look at is whether the CEO/Manager delegates responsibility and has built a durable team that provides complementary skills. Centralised and authoritarian control cannot constitute a sustainable proposition. The principal role of top management is to construct teams that function efficiently and can remain motivated. This involves creating a sense of ownership, an emotional issue more than a financial one. Whilst salaries and compensation remains important, it is emotional ownership that ensures a longer-term commitment to the common cause. If interpersonal relationships amongst the senior leadership of an organisation are broken, business processes will turn dysfunctional. Finally, above all, is the aspect of trust. A business leader must be trusted to do the right thing and this involves speaking the truth, where there is no hesitation to offer compliments just as reprimands. Employees are able to accept and live with disappointments, as long as the actions that cause them are based on fairness and facts. If they can’t, it’s just as well that they leave.

Core values generally concern respect for shareholders, customers and employees. If this goes missing then harsh decisions become inevitable. In any event if a bad leader is not replaced, companies run the risk of losing lots of good second line ones, undermining the very props that support the business. Occasionally, CEOs are completely self-focused with limited concern about performance, staff wellbeing or shareholders. That undermines the very purpose of a business enterprise.

Getting rid of high performers comes with a certain amount of risk. But frequently the perception of its quantum is much worse than the reality.  The common dilemma is ‘what will happen, how will we carry on’? These are the wrong questions to ask. The right ones should address the company’s longer-term credibility and prospects. What will it take to construct a team that functions effectively in the interest of the common good? Leaders should build organisations, not themselves, and if they can’t do it then it’s worth the while to take the punt and look for those who will.

At the end of the day, no one is indispensable. That is just the way nature works and things are meant to be. If someone really is, then the organisation is built on what would constitute a shaky proposition and consequently exposed to serious risk that will eventually play out. There are several examples of highly successful businesses where the original founder has vacated the top spot for more capable replacements, based on the company’s cycle of evolution. The ability to attract fine talent can only be possible when younger managers have more to look forward to. In the ultimate analysis, it all boils down to the sustenance of growth. If that comes into question, then it seems a good time to pass on the baton.


Adit Jain’s articles and opinions can be found on his blog at This content is the intellectual property of IMA India and is copyright protected and legally privileged. Unauthorised copying, reproduction or distribution of this information would amount to an infringement of law and would invite applicable penalties.