How to manage senior executive terminations.

• Author: Chagnon, Richard J.

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TERMINATING a senior executive is an expensive proposition, often in ways more costly than just the separation package. The impact on the organization should be measured in relationships, productivity, strategic integrity, and investor confidence, as well as dollars. Complicating matters is the fact that, in dealing with changes at the top, many of yesterday's solutions no longer work. Added to poor or ineffective communication, they are capable of wreaking havoc on a company.

Although it may seem an oversimplification to say that many executive terminations occur largely because of a breakdown in communications, in numerous situations that is exactly the case. For instance, if the firm fails to examine its reasons for hiring a senior-level professional and then does not communicate adequately the need that person is expected to fill, he or she can not be successful. As a consequence, it should not be surprising that, at the time of termination, there are accusations and counter-accusations regarding what did or did not take place.

When viewed in retrospect, a vast number of separations may follow significant changes at the top. Many of these may be considered to be necessary to deal with the demands of a situation that led to revamping of management in the first place. Many others, though, are the result of a failure to communicate clearly. Because of the subsequent change in work expectations, employees often feel devalued and may misinterpret the behaviors of their new leaders. When hiring a senior executive, it is important to give careful consideration to the impact on the current workforce and what needs to be done to facilitate the transition.

In today's rapidly accelerated pace of product development and short-term market viability in kaleidoscopically shifting global markets, there is an understandable increase in poor and failed performance of senior executives. They must maintain a strong bottom line while boldly investing in the future. They have to enhance product quality while re-engineering their businesses, production processes, and, sometimes, the workforce. They must raise employee involvement while demands multiply from increasingly sophisticated customers. Decisions to hire and fire often are made very quickly--perhaps too quickly--in order to adjust to the "nanosecond" changes required of modern organizations.

A few recent examples from the thousands of suits filed each year point to the dangers surrounding executive terminations:

* A former president of a health care group claimed that he was wrongfully let go and sued the...