Everyone knows when an executive departure isn’t truly voluntary
According to the Harvard Business Review, CEO transitions fall into three categories: 1) planned successions, 2) those resulting from mergers or acquisitions, and 3) 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 18-24 months of being appointed, and their departures are unexpected (at least, to the public… knowledgeable insiders likely know it’s coming.)
Occasionally, executives 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 organizations (and the executives themselves) typically dodge coming clean about the firing in their announcements and other communications. Rather, some leaders are said to have resigned “voluntarily,” or “leave to pursue other interests” or “to spend more time with family.” When most people read such phrases, they understand them to mean the exec would have been fired had s/he not agreed to go quietly. Put it another way: they jumped before being pushed.
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 the seemed to mean 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 the discerning observer 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:
- executive is younger than 60.
- executive held the position for less than three years or will depart in less than two months.
- executive takes a lesser job elsewhere within three months
- company recently reported bad news, it’s in critical condition or its share price drops badly
- 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 (duh!)
- 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 the 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 so similar, so obvious, and so often dismissed as baloney.
While we occasionally relent when the client insists on phrases like “to spend more time with family,” and we will always craft departure statements that support the parties’ legal agreement, our approach is to be more nuanced.
For example, if the client wants to ease things for the departing executive, we’ll identify ways to say nice things about the individual without having readers of the statement say, “If he’s so good, why’d they give the guy the boot?” For example, we’ll include a sentence or two about the executive’s accomplishments while in the position. If the client wants to be less generous, we might couch those same accomplishments as “company achievements” that just happened to occur during the departing executive’s tenure.
That said, exechange.com’s findings confirm what Kessler PR Group has known all along: if you want the public to accept your statements about an executive’s departure, lean on factors they’ll see as verifiable and authentic: the executive’s age, health, move to an equivalent (or better) position elsewhere, etc. Such statements 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. But being sensitive to the true impact of your public-facing statement about the departure can help to protect your brand and your company’s reputation.
