Profile of Internal Hostage Takers
Employees are an essential asset of any given organization. CEO’s are expected to hire smart, competent employees who deliver value and results to an organization. When they find great employees, CEOs typically retain them through praise, rewards, training, and career planning programs. Sometimes CEOs may go too far in offering praise and make an employee feel indispensable. In other cases, the employee simply begins to believe they are vital to the business and without them the company would cease to operate effectively. We’ve discovered that employees who hold CEOs hostage are usually important to an organization, but rarely as indispensable as they would make a CEO believe. These employees are everywhere in an organization, including:
- The developer who consistently fails to meet product deadlines and threatens that if he’s fired a major release will be delayed by months, the development team will quit or the company will never find someone with his qualifications and knowledge of the technology.
- The information technologist who subtly implies that he will sabotage the computer systems if he’s not given more money or a promotion to manage the company’s assets.
- The sales executive who threatens to join a competitor and take the customers with him if the company doesn’t increase his compensation.
The one thing these employees have in common is a bad attitude. They take advantage of their perceived importance to the business and use either subtle or not so subtle threats to get what they want.
The CEO is not the only one in an organization to be affected by internal hostage takers. An employee’s bad attitude spreads through an organization like wildfire and disrupts employee performance and morale. Other employees inevitably loose faith in the entire leadership team, especially the CEO. What used to be a team focused on running a profitable business is now spending more time at the water cooler talking about what’s not being done to “clean house”. The loss of an employee who has special skills or unique talents will certainly impact the business in the short-term; however, removing this employee is necessary to regaining control, credibility and long-term results.
A Case Study
Most CEOs believe that they “run the show” because they are in the top position and accountable to stakeholders for achieving the business results. This is technically correct, but being the chief leader and being in the driver’s seat are two very different things. Any CEO who is being held hostage by internal employees is not really in a position of authority to lead or manage the business. In many cases, CEOs become hostages because they lack the experience to recognize that they are being taken advantage of by employees with an agenda. Let’s take the case of a savvy CEO who had no technical acumen and who had to rely on his VP of Technology to meet a critical deadline:
The CEO of a small private company had committed to several key customers a release of the company’s software product which would include a number of new business-critical features. The VP of Technology was responsible for leading this critical software development initiative. The project was running about a month late, and the team had been searching for ways to get back on schedule. The project had to be completed before the same team could complete a major upgrade to another product, which was critical to the survival of the company.
The CEO grew more agitated by the day because he was unable to honor his commitment prompting his key customers to threaten to go to a competitor. The VP of Technology advised the CEO that it would take another month to deliver the project and that there was nothing that could be done to get the project back on track. When the CEO asked why, the VP started rattling off a bunch of very technical reasons all of which went right over the head of the CEO, a very capable business leader but soft on technical knowledge and skills. In frustration, the CEO told the VP that he would have to figure out how to pull the schedule in or else. Tempers flared and the two lost sight of the goal, it became a contest to see who could win the argument. The CEO threatened to fire the VP who in turn threatened to quit and take the development team with him. At that point the CEO backed off and retreated. Contemplating his next steps, the CEO sought the counsel of the head of human resources. HR’s advice was to terminate the VP immediately before things got worse. The CEO was reluctant to follow this course of action concerned that the company would crash and burn without the VP, especially if the development team quit.
The CEO ultimately decided to back off and approach his customers with the bad news that there would be a delay. In the interim, the CEO avoided contact with the VP hoping that he would come through. After a month had passed the CEO approached the VP expecting to hear that all was well and that the product was ready to be shipped. Instead he discovered that new problems had arisen and that there would be additional delays. Once again, the CEO lost his patience and the two battled it out. In a final act of frustration, the CEO fired the VP. A few people close to and sympathetic to the VP quit in protest. In the end, the company managed to release the product but at what cost? One of the company’s key customers decided to move over to a competitor. The remaining customers gave the CEO one last chance to get it right. Internally, the development team was burnt out and disenfranchised.
CEOs who fail to deal with the few employees who abuse their position and authority end up loosing customers, loosing employees, and jeopardizing the business. As a result, some CEOs end up being replaced by the board or disbanding the business. We discovered that most CEOs know a problem exits and they should take action; but they refuse to listen to their inner voice or they don’t know how to take the first step.
Re-gaining Control of Your Company
Following are several ways CEOs can escape being held hostage by employees:
- Remain fair and objective with all employees
CEOs must refrain from becoming seduced by persuasive employees. S/he must know that failure is a possibility and if it occurs they must come to terms with it and take appropriate action. Risking your hard-earned reputation is not worth keeping on a selfish employee who abuses power.
- Steer clear of blind loyalty
Many CEOs hire former stellar employees and colleagues with whom they’ve known for a long time. This causes a problem of blind loyalty when things go awry. CEOs need to make decisions based on objective information rather than on emotion. They must try not to let their judgment become blurred because it will be difficult to separate the friendship vs. subordinate roles.
- Squash an employee with a personal public relations campaign
In many cases, an employee will launch a personal PR campaign and form a strong “cult” with important employees and customers who support his agenda. The CEO is faced not only with the dilemma of poor performance, but also widespread damage on the company’s image and culture. In this scenario, CEO’s must act quickly otherwise it will be too late.
- Hold people accountable for specific results
Another way to avoid the hostage box is for CEO’s to hold employees accountable for their individual and organizational performance. All too often CEOs give general feedback, such as “you’re doing great”, “this is good work,” or “nice job,” and employees only hear negative feedback when a critical situation arises. Using a formal performance management program that is results-driven and linked with the company’s strategic planning initiatives is an effective means of achieving this goal.
- Establish and manage clear expectations
Workplace assessments help you better understand the opinions, needs, desires, and attitudes of your employees. They help determine the current state of your organization, establish a baseline for future assessment, and enable the pinpointing of organizational strengths and opportunities for growth.
A neutral workplace is one where no single employee has the power to exert his authority over the leadership team for the resolution of his own agenda. CEO’s must continue to focus on reducing costs and improving processes, but not at the expense of keeping only certain employees “very” happy to achieve short-term results. Adhering to the simple rules above will allow your company to maintain a neutral work place, react to new opportunities, and collaboratively deliver long-term value to all company stakeholders inside and outside of the organization.