Are you a new CEO? Here’s how to handle managerial dismissals

Then the new CEO is fraught with whether to incur the wrath of staff and dismiss incapable long serving managers or to gamble and try to keep them around and coach them into greater competence.

Not every organisation can operate like Netflix whereby they famously hire and dismiss human resources talent swiftly to specifically meet changing task and skill needs.

New CEOs especially may face organisaitonal culture and values, relationships, and firm history that blocks them from acting how they know they need to do.

New widely read research by Nadine Kammerlander, Matthias Waldkirch, and Reimar Belschner delves into the minds of new CEOs when the time finally comes for them to weigh whether or not to dismiss a deeply entrenched manager.

Interestingly, the researchers shift away from what many of us would think upon first thought and make firing decisions based on a straightforward cost versus benefits analysis. But the study found that pulling the proverbial termination trigger actually emotionally hurts the new CEO.

The pain occurs particularly among new CEOs in family-oriented firms that do not merely hold financial goals and targets but rather also value their firm identity, loyalty, and interpersonal relational bonds.

In particular, managers often stay for decades in such kind of firms and dismissing them feels personal. Even when a new CEO notices that a mismatch exists between a manager and an organisation’s future direction, the whole progression of making a decision rarely unfolds in a quick manner. The research shows two separate but parallel sensemaking processes begin.

First, CEOs go through dyadic sensemaking that means he or she reflects on the personal relationship they have with the particular manager centered on shared history and gratitude. The results of this reflection grows moral discomfort and can yield hesitation in making the termination decision.

Second, prospective sensemaking occurs psychologically in the mind of the new CEO who imagines how the dismissal may or may not ripple across the organisation and make any waves. He or she would ponder whether employees would feel betrayed, hurt, or scared.

Further, would the firing affect or strengthen the organisation’s values of loyalty and togetherness that make them seem shallow or fake. In value-based entities, dismissals often carry heavy symbolic weight far beyond any performance metrics.

Read: You’re fired! How top CEOs hire and sack in their companies

Surprisingly, every single CEO in the study at first leaned toward restraint and not terminate the ill-suited manager. Unless outright misconduct took place, they avoided immediate swift dismissal.

Hesitancy dominated. Over time though, some of the new leaders did proceed and revise their internal narrative about termination while others did not.

The researchers identify five different mechanisms through which CEOs gradually overcome their initial reluctance to act on managerial dismissals.

Some executives psychologically inflate what internal stakes might occur with the termination. They remind themselves that it is better to protect the broader workforce rather than protect only one individual.

Others are able to separate personal feelings from professional responsibilities whereby friendship does not equal the right fit for a job position. While still other CEOs reinterpret the situation by reframing the mismatch as matter of accountability rather than betrayal.

Then the last two mechanisms revolve around an organisational lens whereby leaders redefine the employment relationship as reciprocal rather than unconditional.

They also rationalise decisions through structured processes, documentation, and transparent communication. When all of the mechanisms operate together, new CEOs can move from the initial emotional paralysis toward what the study terms reasoned dismissals. When only some of the mechanisms take place psychologically, managerial dismissals stall and delay.

In conclusion, firms rarely suffer because leaders care too much but instead organisations falter when CEOs cannot reinterpret what care means in dynamic environments.

Dismissing a manager will never feel comfortable. But when such decisions are handled with reflection, transparency, and alignment filled with organisational purpose, even painful decisions can turn out strengthening rather than fracture the enterprise.

Follow ourWhatsApp channel for the latest business and markets updates.