Hire Slow, Fire Fast

It’s the role of the board of directors to discern the difference between a good CEO who made a mistake and a CEO who is incapable of leading a company toward profitable growth. A long, long time ago (even before I was born) in 42 B.C., philosopher Publius Cyrus wrote, “Anyone can steer the ship when the sea is calm.” The long-term success of the company and its shareholders’ interests are dependent upon the corporate directors to determine whether the CEO is capable of captaining the ship when rough seas are encountered.

Directors must understand their CEO’s strengths and weaknesses as they monitor and assess his or her performance. They should know what the CEO is doing to strengthen his or her weaknesses, and leverage his or her strengths. Over time, a level of trust is built between the CEO and the board where these issues can be discussed openly without resentment or recrimination.

If the directors are doing their jobs properly, it will become apparent when the company’s troubles are due to the CEO’s poor leadership, subpar judgment, or questionable character. If this happens, don’t fool yourselves into thinking these characteristics will change. It’s time to fire quickly and stop wasting time. Don’t make any excuses or care about disrupting the work force. (Besides, employees already intuited the firing months ago, and rumors are flying about the inadequate boss and the board’s indecisiveness for a long time.) It’s like pulling a decayed tooth—do it quickly to minimize the long-term pain.

So, directors, remember that you didn’t win a beauty contest to sit in that chair in the board room. You have a duty to make tough decisions for the long-term good of the company and the shareholders you represent. Be slow to hire and fast to fire, and you will succeed in having the right executive occupying the corner office. Rather than taking a risky bet, it’s the best way to avoid headlines about the cost of your poor choices or indecisiveness.