CEO Hunting Season: Boss Firings On The Rise
While much of the CEO focus this week has been on Steve Jobs of Apple and his health-related leave of absence, some of us C-level execs have noticed that CEO firings are on the increase as the economic downturn gains momentum.
At least six CEOs of publicly traded companies have been fired since the start of the New Year and we're only halfway through January.
Experts say CEO firings double during bad times. And talk about bad times.
Google is laying off recruiters and rumor has it that tech giant Microsoft will announce a RIF next week. Just this week, Nortel filed for Chapter 11, Motorola is cutting 4000 jobs as cell-phone sales plummet, Seagate is slashing salaries and Gannett is putting all non-union employees on one week's unpaid furlough. In this kind of environment, scrutiny of CEO performance by investors is bound to intensify.
In other words, it's hunting time and CEOs are in season.
Not that there's anything wrong with that. As a CEO myself, I fully understand where the buck stops and how business works. When times are good and the economy is frothy, mediocre CEOs can have the Midas touch. And when times are bad, even the best CEOs can look helpless and lost. Investors reward performance – in good times with bonuses and perks, and in bad times with the ax. And by extension, all this holds true for everyone in the C-suite.
The current situation for the person in the corner office, with rapidly falling revenues in almost all industries, reminds me of that scene from the Indiana Jones movie: Harrison Ford is deep in some cave labyrinth and a giant boulder is rolling down the tunnel behind him. He is running and running, darting glances over his shoulder but the boulder keeps coming. In the end, after much suspense, he escapes – and so can you.
So what's an executive to do to secure her position and get back into the "bonus" column?
1. Roll up your sleeves and dig in – this is a time to be very hands on, very humble
2. Move quickly – there is no time to waste so everything has to speed up
3. Conduct top-down analysis of all revenue engines – take nothing for granted including "sacred cows"; look for revenue model changes that reflect the times
4. Communicate with investors – it's critical to be up front and out front
5. Manage your cash, cut costs appropriately
6. Exploit competitor weakness – paradoxically, this is a time of great opportunity when you will build the platform and strategy for your post-downturn success
Look, there are no guarantees. Some very fine execs are going to get canned this year, just as some lousy ones got big bonuses a year ago. The corner office is a Darwinian place and not always "fair." You knew that when you accepted your current position.
We all "serve at the pleasure" - and this is a better time than usual to remember it.
Erik Sorenson is chief executive officer of Vault.com, Inc. Mr. Sorenson, 52, oversees the strategic direction of the global, New York-based media company. He is widely regarded as an expert on media strategy and industry trends, with experience spanning radio, local and network broadcast television, cable and syndicated TV, and the Internet. From 1998 through 2004, Mr. Sorenson served as president of the MSNBC cable news channel. He has won more than twenty Emmy awards as a writer, producer, and television executive.
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