Do We Expect the CEO to Resign During Crisis

You will hear it again soon: CEO resigns after something critical surfaces. It happens all the time. Volkswagen chief executive Martin Winterkorn resigned less than a week after the 2015 diesel emissions scandal. Gregg Steinhafel resigned as CEO of Target in 2014, following a highly publicized data breach. Chicago police superintendent Garry McCarthy was asked to resign after video release of the shooting death of 17 year-old Laquan McDonald.

Heading an organization comes with hefty privileges and liabilities. A resignation makes me wonder if we expect leaders to resign during times of trouble. Are they supposed to quit when we need them most? Do they contribute more by working to resolve the situation or by stepping down? Are we losing out on critical learning opportunities?

To investigate, I asked for the opinions and insight of two leaders, Meg Bear and Dara Blumenthal [bios at end]. Collectively, they have impressive experience in corporate leadership, organizational design, and social science.

Starting with frequency, I asked Meg if leadership resignation was increasing. “I don’t actually feel this is happening more often, but 24×7 news cycles and globalization gives us much more information than we ever had before. The information exchange cycle makes them much easier to see,” she wrote.

Meg’s opinion is that the leader is ultimately responsible for the organization’s shortcomings. “Problems that happen on your watch are complex, but ultimately the accountability rests with the leader. ‘The buck stops here’ is an important leadership concept.” But if we trusted these people enough to hire/elect them, why don’t we trust them to stay and fix the problems? She responded, “One of the realities of leadership is that perception is an important part of the reality in which you lead. If the belief in your leadership ability is tarnished, than your ability to lead is diminished. While the problem might be outside of the control of the leader, for example, an economic downturn or natural disasters, it becomes clear that what you need in the new reality might be a new set of skills. The organization might need to adjust strategy and focus and get to a resolution more quickly. New leaders can bring expertise to help bring resolution more quickly.”

Dara pointed me to an article she published with Nathan Snyder. “Due to leftover conceptions from 20th century organizations, we now face a huge disparity between the capability of employees and the complexity faced in organizational environments. Time and time again, people find themselves in leadership positions or being led by those who lack the requisite competencies to productively deal with 21st century challenges. This isn’t entirely those leaders’ faults; in some cases, their career progress has itself lacked the development necessary for tackling complex, abstract, or critical awareness challenges.”

Dara went on to write, “Ours is not traditionally a society that teaches us to intentionally reflect on experiences, such that they become the fertile ground for deepening self-understanding, broadening learning, and growing beyond. Rather, ours is a society of stark comparison and rational progression.”

Meg brought my inquiry back to its root. “The key is what is needed to ‘fix’ a problem. If the problem is tactical, then it’s likely more useful to stay and help fix it, but if the problem is structural or reputational, you are likely to be more helpful if you allow for a new person to come in and accelerate the correction. In the end, I think the key factor lies in the event horizon to resolution. How much time do you have? What is the impact to the company during the time you are trying to correct the problem? Experienced leaders recognize that oftentimes the right thing is to allow a leadership change to take place so that the crisis can have visible evidence of ‘changes being made.’”

She added, “Of course, all the above is with the assumption that you are not the actual problem – if you, as a leader, are the source or contributor to a problem, either through malice or incompetence, then that is a different situation entirely.”


meg-bear

Meg Bear

Meg Bear is an industry leader and speaker in technology field. She is Senior Vice President, Cloud Services for cyber security firm, Imperva, and spent nearly 14 years in leadership roles at Oracle. Twitter: @megbear

dara-blumenthal

Dara Blumenthal, PhD

Dara Blumenthal, PhD, is a social scientist and cultural theorist. She launched Nature of Work with Nathan Snyder after the untimely end of organizational design firm Undercurrent. Fun fact: she is the author of Little Vast Rooms of Undoing: Exploring Identity and Embodiment through Public Toilet Spaces. Twitter: @thisisdara

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