The Harder They Fall

Think you’re safe in that corner office? Executives are being ejected from corporate headquarters more frequently than ever. And it takes more than a hefty severance to bounce back from being fired

by Anthony A. Davis

When Armani or Hugo Boss design modern suits for executive types, they ought to start sewing pillows into the backsides. After all, in these tumultuous corporate times, it’s almost inevitable that even C-suite nobility will eventually get a boardroom boot straight out HQ doors.

In a recent Booz and Company study of CEO succession, researchers found that in 2007 the global rate of dismissals due to poor performance climbed to 4.2%, more than doubling 1990s rates. Median tenure was a mere six years – a far cry from the 1950s and ’60s when a CEO was a quarter-century man hoping for a golden watch rather than a golden parachute. In other words, these days, enjoying the power and prosperity of a long career in corporate leadership is often a matter of knowing how to bounce back from termination.

Harvey Mackay, bestselling author of business books including Swim With the Sharks Without Being Eaten Alive and We Got Fired!…And It’s The Best Thing That Ever Happened to Us, has known and interviewed some of the corporate world’s biggest senior executive flops and comeback kids. In his opinion, there are three main reasons CEOs get fired. “Number 1 is arrogance. Number 2 is arrogance. And number 3 is arrogance,” says the Minneapolis-based author in the homespun style that has garnered sales of more than 10 million books in 80 countries. “Then you can start naming all the others.”

There’s good reason for his focus on executive attitude. With the Booz study suggesting that firing is becoming just another part of the CEO’s career, or that of anyone else for that matter, Mackay would advise against taking it personally, as hard as that may be. “It’s just someone’s judgment. But when we get to the CEO level,” he says, “that’s different.”

Financially speaking, a CEO is able to survive firing more easily than Joe Lunchbucket. But emotionally, psychologically, says Mackay, an executive termination packs more of a wallop. “I think, quite frankly, it’s harder for CEOs to rebound. You’d think just the opposite. They’re so confident, they’re so cocky, but they probably take the fall harder than the average person.” The reason, he says, is the public exposure. A CEO termination, especially at the bigger companies, Mackay notes, usually makes the newspapers, business magazines and blogs. “That’s total humiliation.”

So much humiliation, in fact, that finding someone willing to discuss being fired – even those who have bounced back to success – is like trying to get a cat to bark. Numerous former and current CEOs contacted for this story declined interviews. As one put it, despite having long since recovered from a termination to become president and CEO of a major oil and gas concern, “I don’t really want to look back at the past. I’m going to move ahead in life by looking forward.”

Sitting across from me in a downtown Calgary food court is the only ex-CEO who was willing to take that look back, a 49-year-old man in a blue suit. But there were conditions: no names and a promise not to specify his field. “Call it ‘energy,’” he says, explaining his need for anonymity because of possible pending litigation over his 2003 termination. We’ll call him Josh.

Josh founded his company in 1999 with a couple of colleagues, going without pay for seven months to set it up. He remortgaged his house to sink his own money into the business, initially capitalized with $5 million. “I didn’t have much money. I’d been an employee all my life,” Josh recounts. “Three hundred and fifty thousand dollars doesn’t sound like a lot, but it was everything I had, and more.” Among the major investors was a well-known Calgary finance and investment firm, which had a place on the board.

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