Valuetainment - November 29, 2019


Episode 395： 8 Reasons CEO’s Get Fired


Episode Stats


Length

16 minutes

Words per minute

213.56956

Word count

3,536

Sentence count

358

Harmful content

Misogyny

3

sentences flagged

Hate speech

3

sentences flagged


Summary

Summaries generated with gmurro/bart-large-finetuned-filtered-spotify-podcast-summ .

You hear about CEOs getting fired all the time, but why is it that they get fired? We re going to talk about 8 reasons why CEOs get fired and why it s so common. 1. They mismanage change 2. They don t have a good relationship with their management team 3. They have a poor relationship with the board 4. They lack a key skill set 5. They ve a low opinion of their own employees 6. They re not good with other people 7. They are not good at delegating 8. They make poor decisions

Transcript

Transcript generated with Whisper (turbo).
Misogyny classifications generated with MilaNLProc/bert-base-uncased-ear-misogyny .
Hate speech classifications generated with facebook/roberta-hate-speech-dynabench-r4-target .
00:00:00.000 30 seconds. One time for the underdog. Ignition sequence start. Let me see you put them up. Reach the sky, touch the stars up above. Cause it's one time for the underdog. One time for the underdog.
00:00:17.200 I'm Patrick, my debut host of ITIM. And today I want to talk to you about eight reasons why CEOs get fired. You hear a lot of people getting fired. WeWork, Papa John's, many of them. Why is it? We're going to talk about eight reasons why they do.
00:00:28.600 So let's get right into it. The first thing I want to look at is the following. There's a study done by LinkedIn. They looked at 12,000 CEOs who have 50 plus employees from 20 different countries to see what they did before they became CEOs. And this is what they gathered. Number one, most common first jobs of these CEOs is they were first consultants. Then the other one is software engineer, then analyst, sales manager, project manager, account manager, manager, founder, associate software developer. These are top 10.
00:00:56.000 Then the second one was most common first job functions. What they were doing with that function, their first job before they became CEOs. Number one was biz dev. Going around shaking hands, getting to know people. Very interesting and insightful to know that people who are good with people eventually become CEOs. Number two was sales. Think about it. Number one is biz dev. Number two is sales. Then it's engineering, technical. Then info tech. Then consulting, finance, entrepreneurship, operations, marketing. That's what they had.
00:01:26.000 Right before they became CEOs. What did they do before and what percentage of them were directors. Directors of a department. Directors of this before they became CEOs. 72% before becoming a CEO, they were a director. 72% of them went director. Then they became CEOs with the company. And outside of that, this is very interesting, is how many of the CEOs were recruited externally from another company?
00:01:50.000 How many of the CEOs were promoted internally? Very, very interesting here. 20% were promoted internally. 80% came from the outside. You know, some people would have thought maybe more came from inside than external, but 80% came from outside. Meaning they hired a headhunter. They hired a corn fairy, a recruiting company. 0.95
00:02:08.780 We're looking for a company. We're looking for a CEO. Somebody went out there and found them. They spent their $200,000 on the CEO. And then that person came in and only 20% was promoted internally. This is just something to look at on how folks end up becoming CEOs. Having said that, now let's look at why CEOs get fired.
00:02:25.640 The first one I want to look at is a study that I saw from CNN where the actual CEOs that were fired. I think it's 73 of them that were fired. What was the leading reason for it? Number one reason was poor business performance. That was 30% of it. Number two was relationship issues with the board. 26%. Number three was a lack of key skill set, which is 22%. And last but not least was alienating the management team, which is 12%. That's tough to do.
00:02:55.640 But it's very common because some people don't want to talk to their management team because the management team is typically the one that's most critical of the CEO they're working on. So they'll kind of create a certain distance between them. And then there is no relationship. And then sometimes it's too late and you no longer have influence. We'll get deeper into that. Now here's the next one. This is from Forbes. And this is very insightful because it's the actual board members, 1,087 of them, who decide, I think we've got to fire the CEO.
00:03:22.280 How they came to their decision and why they said, I don't think this person's qualified to be a CEO anymore. Very interesting. Look what they said. Five reasons. Number one reason. 31%. Would they mismanage change?
00:03:36.760 So we're going through a different season. We're going through change. They mismanage change. They didn't know how to, they either hurt the culture on how it was with the company and then it was a new thing or going into a new thing. They didn't know what new ideas to come up with. But the whole thing is they mismanage change.
00:03:51.820 Second one, ignoring customers was 28%. Number three was tolerating low performance. Interesting that 27% just visualize the board. You got seven people sitting there, five people sitting there, nine people sitting there saying, this CEO, I like him. I like her. They seem like a nice guy. They seem like a nice, you know, this is somebody that we feel good about.
00:04:13.500 But why are they tolerating low performance? Why are they not pushing their team? The investors, the board is saying, you know, we've got to have somebody that's going to come in here and really be able to drive. That was number three reason. Number four, denying reality.
00:04:26.040 Yeah, I don't really think that's what we're going through. They're denying. Listen, if we go like this, we could potentially go out of business the next two years. Yeah, I don't really think it's as bad as people think it is.
00:04:34.560 Denying reality is 23%. And the last one is too much talk, not enough action. You look at this, this isn't just somebody saying it without experience. It's 73 CEOs that were fired and it's 1,087 board members that gave feedback on why they decided to vote on firing a CEO makes you think.
00:04:55.000 So it prompted me to make a list here on why CEOs get fired. Number one is obvious, you lose the board. Once you lose the board and the board doesn't feel good about you, you know what happens here.
00:05:04.100 Number two, is in the middle of a scandal. Let's talk about this because this is what many of you send me messages on, both on YouTube and on Instagram, to say, Pat, can you talk about some of this stuff?
00:05:14.680 Let me give you some of the scandals that you've been hearing about. Number one is Papa John's. Racial slur. He said that, boom, he had to step down.
00:05:20.580 Number two, Travis Kalanick. Sexism and frat culture. That video came out with him talking to one of his drivers and the driver was recording it.
00:05:28.680 They got several million views and then in Uber, they were talking about that there was too much partying and the culture wasn't that fair for men and women, all this stuff.
00:05:37.620 Boom, he had to step down. Number three is Tony Hayward, which is a very interesting story.
00:05:41.460 Because Tony Hayward was the CEO of British Petroleum, I want to say in 2010, and they had this massive spill.
00:05:51.800 They had this massive issue that took place, explosion. It was very problematic. Spill, all this stuff that happened, and they lost 11 employees.
00:06:01.520 Eleven employees died, okay? So now, he's going through this whole thing. There is this very epic scene, interview that they do, that you've got to watch.
00:06:10.840 It's like six seconds, you've got to watch it, where they're asking him questions after he lost 11 employees.
00:06:16.960 The families of the 11 employees are contacting this guy, and here's what Tony Hayward says in an interview.
00:06:22.140 He says, look, nobody wants this thing to be done than me.
00:06:25.720 Nobody wants it to be done more than me. I want my life back. It's the line of what he said.
00:06:32.980 You just lost 11 employees who lost their life. They're never going to get a life.
00:06:37.620 He says on an interview, I want my life back. Three months later, he resigned. It was done.
00:06:44.100 It's not mismanagement of money or things like that. It's more the humane aspect of you dealing with your people.
00:06:49.800 What do you mean you want your life back? 11 people. The way you handled crisis wasn't good. Gone.
00:06:54.040 And then Carlos Ghosn, who is the chairman of Nissan, Renault, and I believe Mitsubishi,
00:07:00.300 he had a scandal that took place with him with Mitsubishi Company Assets and misleading investors.
00:07:04.620 November 2018, I think he got arrested in Japan when his issue was taking place.
00:07:09.240 And this was a person that was CEO and chairman of three different companies, not small companies.
00:07:14.660 Renault, Nissan, Mitsubishi, and all of a sudden all this stuff came about.
00:07:18.460 There's a video you can watch about his wife and kind of study what happened here, but he had to step down.
00:07:22.280 And last but not least, the recent one with Adam Neumann.
00:07:24.700 Hey, really, WeWork is worth $48 billion.
00:07:27.540 And then after a little bit of research they're doing, well, you do sign 15-year leases,
00:07:32.440 and you do get it at a discount, and you're kind of selling a little bit upsell.
00:07:36.200 But what if those 15-year leases, some people cut their contracts with you because the economy's bad.
00:07:40.820 I don't really know if you're worth $48 billion.
00:07:42.660 I think you're really only worth $15 billion.
00:07:44.800 His net worth dropped from $4.2 for $2.1.
00:07:47.920 And then he was using companies' resources for his own personal lifestyle.
00:07:53.520 And at the same time, you know, doing a little bit of drugs while at work.
00:07:57.060 So let's just say those are true. 0.93
00:07:58.500 I don't know.
00:07:58.960 Remember, I'm reading these articles of what the media is telling us and what we're reading about.
00:08:03.000 But if a decision was made to fire somebody, we better believe some of this stuff is true, right?
00:08:07.600 This scandal, a mistake, hurts anybody.
00:08:11.540 Everybody's in that place.
00:08:12.780 That's me.
00:08:13.340 That's any of you that are CEOs.
00:08:15.100 You have to know that one of the reasons why CEOs get fired is in the middle of a scandal.
00:08:18.800 It can happen to anybody.
00:08:20.140 So you kind of control some of your decisions that you're making.
00:08:22.700 Next on top of this three was not meeting expectations.
00:08:26.080 Very simple.
00:08:26.940 Number four, majority control is a technical one.
00:08:31.360 If you control most of the board and the board wants to fire you, you can't fire you.
00:08:35.920 I have a guy that we were talking about possibly working with this guy, and he was kind of asking me for counsel.
00:08:43.840 And he said he wants to bring an investor in, but he doesn't want to lose control because what if the board decides to fire him?
00:08:49.020 Well, if he doesn't bring the investor in, he needs the resources to get bigger so he doesn't want to take the money
00:08:55.300 because he loses too many board seats.
00:08:57.040 Well, they'll get three.
00:08:58.180 He'll have two, and the three can vote against him to fire him.
00:09:01.040 He doesn't want that kind of risk because he's worried about it.
00:09:03.360 So he doesn't want to get the money.
00:09:04.360 So to him, it's more important to control.
00:09:05.820 So again, that's very basic and technical.
00:09:07.980 New buyer, somebody comes in.
00:09:10.820 You were the old CEO.
00:09:12.120 We bought 100% of it.
00:09:13.320 Guess what?
00:09:15.180 Yeah, you know what?
00:09:15.860 We want to bring our own CEO.
00:09:17.120 I mean, we like you.
00:09:17.780 It's cool.
00:09:18.080 But do you mind sitting here as a consultant, and maybe when we need you, we'll pay you $1,000 an hour, $500 an hour, whatever it is.
00:09:24.180 And we'll give you a return of $50,000 right now that it's needed.
00:09:27.380 But we want to bring our own CEO.
00:09:29.160 And so you're fired.
00:09:29.860 Thank you.
00:09:30.240 You can publicly resign because it's better if you resign rather than us firing you.
00:09:34.240 But I think that's the direction we want to go.
00:09:35.780 No problem.
00:09:36.600 Indirect way of getting fired.
00:09:37.720 It's a new buyer coming in.
00:09:38.620 It happens all the time.
00:09:40.200 Sometimes the CEO fires themselves.
00:09:41.920 I just don't think I'm the guy for this job.
00:09:43.780 And I'm not a number one guy.
00:09:44.920 I thought I was, but I'm not.
00:09:46.300 I'm better being a number two guy, and I'll step down.
00:09:48.900 I'll go back to my position.
00:09:50.000 No problem.
00:09:50.840 You fire yourself, and you step away.
00:09:52.820 Then the next one is a lost influence over the team.
00:09:55.660 Very basic.
00:09:56.360 We talked about this a little bit.
00:09:57.740 This happens all the time when one loses influence.
00:10:01.620 Either they're golfing too much.
00:10:03.500 They're away too much.
00:10:04.440 They're not in and out of the office regularly.
00:10:06.280 They're kind of big shotting it a little bit.
00:10:07.880 And the people are like, wait a minute.
00:10:09.360 You come here.
00:10:09.980 You're demanding people to get to work.
00:10:11.440 And then you're going to your golf game that you have.
00:10:14.200 And you're not really working that hard.
00:10:17.020 I don't know if the board really knows about it.
00:10:18.440 We're doing all the work.
00:10:19.280 You're only here 10 hours a week.
00:10:20.420 What the hell is going on over here?
00:10:22.000 You lose your team that eventually leaks and board finds out about it.
00:10:25.380 And a company has outgrown the CEO's ability.
00:10:27.960 Sometimes a company, you may have been a CEO of a company doing 50 million a year.
00:10:32.640 You're doing good.
00:10:33.740 Maybe you were a CEO of a company now doing 100 million a year.
00:10:36.080 You're still doing okay.
00:10:37.340 But the company gets to doing a billion dollars a year.
00:10:39.580 You're no longer somebody that should be the CEO of the company at a billion dollars a year.
00:10:42.760 Company outgrows the CEO.
00:10:44.440 We need a different kind of a CEO to manage a billion dollar company and a $10 billion company,
00:10:48.780 et cetera, et cetera.
00:10:49.560 Sometimes people stay.
00:10:51.200 Sometimes people outgrown.
00:10:52.260 They bring the CEO from the outside.
00:10:54.140 And that's some of the reasons why CEOs get fired.
00:10:56.040 Now, how to prevent?
00:10:56.960 How to prevent?
00:10:58.940 Number one, know that you can get fired.
00:11:02.140 Every time I have a meeting with my staff, I say, guys, do you know who gets fired here
00:11:06.560 the most?
00:11:07.780 They said, who?
00:11:08.680 I said, I guarantee you, none of you guys get fired more than the CEO does.
00:11:12.460 I get fired every day.
00:11:13.420 What do you mean?
00:11:13.840 Every time a client cancels, I get fired.
00:11:16.440 It's their way of saying, I'd rather do business with somebody else than you.
00:11:20.220 Every time an agent leaves, every time an employee leaves, every time any negative happens, it's
00:11:25.700 a form of getting fired.
00:11:27.080 And by the way, if I don't do a good job, you fire me.
00:11:30.260 I can't fire you.
00:11:31.080 Of course you can fire me.
00:11:32.160 How do I fire you?
00:11:33.420 I simply say, I want to go work somewhere else.
00:11:35.460 It's a form of you firing me to go work for another CEO, another company.
00:11:40.380 That's a form of getting fired.
00:11:42.140 Never thought about it that way.
00:11:44.100 So if you're a CEO running a company, keep that in mind.
00:11:46.080 It doesn't matter that you're a CEO.
00:11:48.100 All the pressure's on you.
00:11:49.560 You shared a position with a different department, but it's very important to know that you can
00:11:52.860 get fired. 0.72
00:11:53.400 Don't get arrogant to the point that, I'm so important, I'm so needed, they will never
00:11:57.460 fire me. 0.96
00:11:58.480 Yes, you, number one, need to know you can get fired. 0.99
00:12:01.060 Number two, growth in sales is not looking good.
00:12:03.840 If sales is not up, everything else is irrelevant.
00:12:06.580 Sales, a lot of times, forgives you.
00:12:08.100 Look at today's election time.
00:12:09.980 What is the one reason why a lot of people are not paying attention to anything else when it
00:12:13.880 comes down to Trump's re-election?
00:12:15.460 Economy is doing good.
00:12:16.780 Look at economy as sales.
00:12:18.520 When sales is good, people can sometimes overlook some of the other areas because sales is good.
00:12:24.220 So you've got to grow your sales.
00:12:26.700 Three is, you don't pour into your team anymore, so you've got to start pouring into your team.
00:12:30.520 You've got to start kind of believing in them and encouraging them and having plans for them
00:12:34.100 long-term, talking about business planning with them, developing new leaders.
00:12:37.620 When you're developing new leaders, people say, well, when this guy's in my life, I become
00:12:41.000 a better human being.
00:12:41.900 Well, this is good.
00:12:42.540 I like working with him because I'm becoming a better leader.
00:12:44.640 Well, then you're needed because you are a leader that's developing leaders.
00:12:47.880 Next one, bringing in new customers.
00:12:50.020 Sometimes when a CEO goes to a company and a company does very good and he brings three
00:12:53.860 customers that have a relationship with him from a prior company, that's like clout.
00:12:58.220 Hey, this is good.
00:12:59.520 We need this guy because those three big customers that are with us now is because of the CEO.
00:13:03.720 Wow, we like this guy.
00:13:04.840 He's got some contacts.
00:13:05.960 Let's keep him.
00:13:07.200 Six, bring new partners in.
00:13:08.900 You come into the company.
00:13:09.840 You're a CEO.
00:13:10.920 Hey, I think we've got to bring this technology person.
00:13:12.960 Hey, we've got to bring this PR company here.
00:13:14.500 We've got to bring this product over here.
00:13:15.760 We've got to bring this thing over here.
00:13:17.320 All these partners that are being brought up, they're being brought here because of
00:13:20.380 you, the new CEO.
00:13:21.440 So you're now deep relationship within the company of all these people that are there
00:13:26.300 doing business with the company because of you.
00:13:28.580 Not just customers, but partners and technology now.
00:13:32.000 Next, you create new alliances.
00:13:34.020 You're now good with the CMO.
00:13:35.840 You're now good with the CFO.
00:13:37.520 You're not good with the CEO.
00:13:39.000 You're not good with the president.
00:13:40.340 You're not good with the director of this, VP of this.
00:13:43.380 You now have alliances.
00:13:44.580 People are liking your voice.
00:13:45.860 They're liking your philosophy of leading.
00:13:47.900 You're winning votes.
00:13:48.720 And last but not least, there's mismatching culture.
00:13:50.540 Let me talk about mismatching culture.
00:13:51.980 So, sometimes a CEO comes to a culture and the culture clashes.
00:13:55.800 For example, say we've got five different types of CEOs.
00:13:58.560 Somebody's extremely driven.
00:14:00.400 We're going to go out there and do this.
00:14:01.620 Hey, we're competitive.
00:14:02.400 We're going to be number one.
00:14:03.700 And we're going to be number one one day.
00:14:04.820 And we're going to do this very, very, very, very competitive, right?
00:14:08.520 You know, or somebody that's very, you know, this is very idealistic.
00:14:12.320 It's about learning.
00:14:13.180 It's about improving.
00:14:13.960 It's about getting better.
00:14:14.820 We're going to be okay.
00:14:15.700 We're going to get better.
00:14:16.480 We're going to read this thing.
00:14:17.300 We're going to study this thing.
00:14:18.140 It's idealistic.
00:14:19.000 So, three, steward, safe.
00:14:21.540 You're loyal.
00:14:22.140 You're dependable.
00:14:22.940 You're helpful.
00:14:24.100 You're reliable, right?
00:14:25.120 It's a very good guy to have.
00:14:26.200 He's a steward to the company.
00:14:27.400 A different kind of a CEO.
00:14:28.540 I'm here to help you guys out.
00:14:29.940 I'm here to work together.
00:14:30.960 I'm here to do this.
00:14:32.420 Diplomat.
00:14:32.880 Diplomat is somebody that does well with everybody.
00:14:35.340 You know, he's good with customers.
00:14:36.540 Diplomat is good with compliance.
00:14:37.860 Diplomat knows how to talk to sales.
00:14:39.520 Diplomat knows how to talk to board.
00:14:40.860 Diplomat knows how to talk to media.
00:14:42.220 Diplomat knows how to talk to a lot of different people.
00:14:44.380 Maybe not the best driver, but it's good at bringing people together and synergizing.
00:14:48.240 So, it's a good culture.
00:14:49.140 And last but not least, it's the technical guy.
00:14:51.300 Or the gal.
00:14:51.900 Knows a lot about the products.
00:14:53.020 Knows a lot about the industry.
00:14:54.060 Knows a lot about everything.
00:14:55.380 I just had a conference call this morning.
00:14:58.240 I was getting an update on some of these insurance companies, you know, the changing of CEOs.
00:15:02.900 One of these companies, that's a $200 billion company.
00:15:05.040 They were giving me some insight on what's going on with this company.
00:15:09.400 They went from a CEO that was extremely technical.
00:15:13.900 When he's the CEO, the company started going down.
00:15:16.360 He knew more about products than anybody else.
00:15:18.880 But he's all technical and he was always afraid because he knew so much.
00:15:23.160 So, because he knew so much, he never moved.
00:15:25.160 Then they went and brought somebody else that was more of a driver and he's a younger guy
00:15:29.680 because they want to grow the company.
00:15:31.400 See, this guy was safe, but it mismatched the culture because the company wanted to grow.
00:15:37.120 Now they're bringing somebody else.
00:15:38.460 So, if the board is trying to hire and replace and get a new CEO, if the CEO doesn't match
00:15:44.860 the culture, it's not going to work.
00:15:46.720 If he's way too competitive, that culture is not competitive, it's not going to work.
00:15:51.380 If he's very relaxed, chill, technical, and the culture is very competitive,
00:15:55.940 there's got to be something that there's a mismatch with the culture where it works
00:15:59.760 to help continuously grow the company.
00:16:01.720 So, these are some of the things when it comes down to you, thinking about why CEOs get fired
00:16:06.140 and why some CEOs are able to stick around. 0.79
00:16:08.780 Thanks, everybody, for listening.
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00:16:30.700 With that being said, have a great day today.
00:16:32.440 Take care, everybody.
00:16:33.160 Bye-bye.