According to the Harvard Business Review (HBR), CEO transitions fall into three categories:
- Planned successions
- Those resulting from mergers or acquisitions
- Forced successions — when the existing CEO leaves abruptly.
While planned successions are apparently the most common (about two-thirds of transitions, according to the HBR), communications around forced successions are clearly the most fraught.
Some research suggests that a third to half of all CEOs are fired within 18 to 24 months of being appointed, and their departures are unexpected (at least, to the public —knowledgeable insiders likely know it’s coming.)
Occasionally, executives at privately held companies are fired after being involved in something criminal or scandalous, or after failing to properly respond acceptably to something criminal or scandalous involving the company or its employees. But in announcing such transitions, organizations (and the executives themselves) typically avoid coming clean about the reasons for the firing — or even acknowledging that the individual was pushed out. Rather, some leaders are said to have “resigned voluntarily” or “left to pursue other interests” or “wanted to spend more time with family.” Crisis communications consultants have believed for many years that most people reading such phrases understand them to mean the exec would have been fired had she or he had not agreed to go quietly. Put it another way: they jumped before being pushed.
Now there appears to be some empirical support for that notion. Not long ago, a researcher concerned with such issues scrutinized hundreds of CEO transition statements and “decoded” them based on content, tone and source. Paired with some demographic and financial data about the company and the departing exec, the researcher crafted a rubric for determining when statements that seem to say one thing (the departure was voluntary) actually meant another (the executive was booted.) The Simplified Push-out Algorithm, developed by Exechange.com, was intended for academic researchers, but it’s clear that most readers of such news are discerning observers, and discerning observers can use the system to determine whether the CEO departure was voluntary, forced or something in between.
On rare occasions, the company may admit the executive is being “terminated for cause” or forced out for documented bad behavior. In the absence of that admission, Exechange.com’s algorithm suggests certain markers mean the transition was probably forced:
- The executive is younger than 60.
- The executive held the position for fewer than three years or will depart in fewer than two months.
- The executive takes a lesser job elsewhere within three months.
- The company recently reported bad news or it’s known to be in critical condition.
- The company gives no reason for the departure, or it’s vague, opaque or unintelligible.
- The successor is unavailable, a board member fills the position or the position is eliminated.
Transitions not flagged by these factors, probably are voluntary, Exechange.com found, as when:
- The executive reached mandatory retirement age or had been in poor health or died.
- The executive moves to a comparable or better job elsewhere within three months.
- The company (or press reports) convincingly characterizes the departure as due to personal or business reasons unrelated to the company.
The work of crafting statements that characterize executive transitions is typically that of in-house communications staff, who are not as sensitive to such issues — which is one reason their statements are so similar, so obvious and so often dismissed as baloney.
It is understandable that the board would prefer to tamp down concerns about an executive departure with a phrase like “to spend more time with family,” but, just as there are many ways to say, “No Comment” without using those words, it is possible to craft a nuanced departure statement that achieves the goal while supporting the company’s legal department and whatever agreement it has made with the soon-to-be-former executive.
For example, if the board wants to ease things for the departing executive, the statement might include a quote from the board chair wishing her well and a few sentences about her accomplishments while in the position. That’s often all it takes to counterbalance the notion that the executive was kicked out. If the board wants to be less generous or communicate that the decision for the executive to depart wasn’t mutual, those same accomplishments can be couched as “company achievements” that just happened to occur during the departing executive’s tenure.
That said, Exechange.com’s findings confirm what many in the crisis communications world have known all along: if you want the public to accept your statements about an executive’s departure, lean on factors the public views as verifiable and authentic, such as the executive’s age, health or move to an equivalent (or better) position elsewhere, among other possibilities. Such statements are often taken at face value and are less likely to be disbelieved or derided.
Of course, none of this will fool the executive’s direct reports and other insiders in the know. And those individuals, if so motivated, can make sure the “truth” is shared widely, undermining the board’s efforts to narrowly walk the line. Nevertheless, if the company is likely to experience push back or unwanted scrutiny about the departure of a top executive, being sensitive to the impact of public-facing statements about a fraught executive departure can help to protect your brand, the company’s reputation and the reputation of its board as well.