Exiting an Ineffective Leader

Episode #29: Exiting an Ineffective Leader

We’ve been talking about the powerful leadership dyad – what if yours isn’t working? What if your executive leader is ineffective? Or worse yet, berating staff or being inappropriate with patients and creating risk for the practice?

We’ve been called into many practices over the years where a leadership transition is taking place, or it is painfully obvious that one is needed, but no one knows where to begin. This is fairly common. In many cases, the group has a leader who started off just fine, and over a course of several months or even years, evolved into being ineffective. They usually contact us when they’re at a point of crisis.

Annual performance reviews are a good way to avoid a bumpy departure. If things aren’t going well, you have a heartbeat of these regularly scheduled conversations to discuss what’s working and what’s not. I’m convinced that if groups conducted annual reviews with their top business leaders, there would be far fewer unpleasant surprises where executive performance is concerned.

The first question to consider: is the leader aware or oblivious of their ineffectiveness? Many times people have evolved into a place where the position is no longer working for them, they know it, but they don’t see a way out. They cannot envision a graceful exit.

The second question to consider: will they want to hang onto the position for political or ego reasons? You’ll have a good sense of this – will they be willing to work with you on a transition or will they be shocked, and dig in their heels, insisting everything is okay?

Third, can you talk with them about their shortcomings, and what the group needs now for leadership? Can they hear that kind of feedback from you or one of your partners?

Lastly, will they be okay financially if they are exited from the position or do they need their income? Are they living paycheck to paycheck? This won’t change your eventual course of action, but it may inform decisions if you have some insight about this.

Our next episode will be focused on the successful use of severance agreements, which can be a powerful tool in honoring their contributions and exiting them with a minimum of fuss. Severance agreements can also be used effectively to reduce your risk for a wrongful termination lawsuit.

Discussions about a leader leaving are fraught. The leader may have a strong ego tie to the position, or the group, and they may struggle to see themselves in a different role. We generally don’t recommend demoting someone or hiring someone in to an organizational position above them, unless they are the first to bring the idea to you. Even then, I urge you to proceed with caution.

Incumbents have multiple different reactions to the notion that it’s time for them to go. Some are scared, some are upset. If they’ve been embezzling from you, they may run through a whole host of strategies to keep their role, and to maintain their “gravy train.”

When entering into these conversations, be clear. Be concise. Be unemotional. Be prepared for them to be emotional. They might even be personal. You need not be. Keep it factual and respectful, and keep the focus on what the business needs going forward.

Be prepared with what you’d like to offer them in terms of severance, and how you’d like the transition to go. Smoothest would be that they agree to stay on while you recruit a replacement. If you don’t think that would work well, is there a #2 who could step in for a short while? A caveat here – many groups we’ve worked with have thought it was a great idea to just let that #2-person step in to “see how they do.” Resist this urge – it is riddled with flaws.

First and foremost, everyone already sees them in the #2 role, and may not be likely to allow them to step up – what, this person who was my drinking buddy last week is now the big boss? We’ve seen many talented leaders in a #2 role be stymied in their attempt at stepping into the #1 role by their coworkers’ inability to see them in a new light.

In many cases, if they’re in a #2 role, they’re likely comfortable there. Allow them to support the new boss and be clear from the start if they’re not a fit that they will not be being promoted. This is not to be rude or insensitive, rather to be clear about what is going to happen so they can plan accordingly. If they threaten to leave if they’re not promoted, that’s not really someone you want on your team in the long run.

There will be other turnover when a leader leaves – you can expect this. Kind of like a presidential nomination – most leaders have their “cabinet” and some of those folks will leave in conjunction with a leader’s departure. This is okay. It will take a while to stabilize again, AND you have an opportunity to rebuild the team to be even stronger than before.

Be clear about when the transition will take place and stick to your timeline. Have a contingency plan in place and be prepared to exit the outgoing leader earlier if they begin to undermine the process. If they can behave professionally, you can work together to make the transition as smooth as possible.

When you announce this to the whole team, keep the messaging to other staff brief, factual, and if you think it will be sticky, clear it with your HR attorney and create talking points for all partners and other leadership. Make certain that everyone is clear that they are to stick to the talking points, and not to elaborate or gossip, as tempting as that may be. All inquiries about the transition should go through your Medical Director or Board President so as to minimize the potential for damaging statements to be made.

Everyone should bear in mind that in the absence of anything else, a positive statement about how much the group appreciates the outgoing leader’s many contributions is always a good answer to any gossipy question.

Your goals for the leadership transition should be:

• A smooth operational transition
• An opportunity to level up the practice’s leadership
• Your chance to honor the outgoing leader and be as classy as possible

Along this line, resolve to give them a good send off, even if the last weeks or months have been bumpy. Recall all of the good things they have done for the practice in years past. Give them a factual reference that is as positive as you can be – perhaps a letter of reference that focuses on their strengths?

Discuss with your partners if you will allow them to file for unemployment without contesting it. This is a way to soften the blow. If you will not contest a claim, be clear about that – it can also be a part of a severance agreement. You should use a severance agreement as a mini-insurance policy – we’ll discuss more about that in an upcoming episode.

As we said in our discussion about the Bad Partner, doing the hard work of leadership, and understanding when a leader has run his or her natural course is challenging, but will pay huge dividends in the long run. With the right leader in place, your group will run better, the financial performance will improve, and everyone will be happier.

Join me for our next episode, where we’ll interview Shawn Chummar, expert on mitigating business risk using insurance products like Employment Practices Liability Insurance and other tools.