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HR news and updates from the E.L Blue Team

Toxic Management – executive hire gone wrong

19 Oct 2020 | HR, Human Resource Management, Human Resource Outsourcing, Recruitment

The setting

The well established client had, 12 months prior, appointed a new business unit manager to head up a key BU in their company.  The board and owners of the company were thrilled with the results, the financial performance was great, business was good and profits were higher than ever before.

 

The indicators

On the surface the situation was all rosy, however it was concerns raised by the human resource management function that started to raise the alarm for the senior management team and the board.  Staff turnover, which had been a pretty consistent 5% for a long time had jumped to 30% in the last 12 months, and the human resource management function had record of more than 30 un-resolved people related disputes within the business unit.

On further investigation it appeared that the people issues were results of the BU manager tending towards being a micro manager who refrained from making the decisions, and created conflict between the line management team.  This lead to a growing bullying culture as different line managers in the BU tried to get things done by force.  The result was internal disagreements with no decisions made, no expectations around behaviour and an increasing disenfranchised team.  After some financial analysis it was clear that the strong financial results were based on the BU manager keeping a tight control on costs, by not making decisions on business growth related expenditure.

What had previously been a strong collaborative high performance self-managed culture, was starting to break apart under a toxic micro manager.

 

Denial

As the outsourced HR partner, E.L Blue, was an independent 3rd party who took these findings to the senior leadership team to rectify.  Initially the senior management team was not receptive to this input as the financial results had been great.  It was after a bit more anecdotal evidence was received that they started to take it seriously and a series of counselling and mentoring sessions were held with the BU manager.

After a period of 6 months mentoring, issues had escalated, so after further input from E.L Blue and others in the management team, it was determined by the board that the only alternative was the terminate the employment of the BU manager.

 

A Remedy

Issues to address prior to executing this decision were ;

        1. Legal termination
        2. Busines continuity
        3. Replacement

It was quickly identified that while the legal termination of employment was confronting, it was quite straight forward once the decision was made.   E.L Blue worked with the board to establish the termination process and determine the most positive way to complete the task.

The larger issue was how to ensure business continuity and leadership until a permanent replacement was recruited.   It became apparent that within the BU’s management, there were not suitable candidates to step up into the BU head role.  There was also not the capacity within the business to transfer a BU leader from another business unit.  It was also decided that leaving the position vacant for the time to find a permanent replacement would have serious impact on the business performance.   E.L Blue and the Board considered engaging a professional ‘interim manager’ but it became apparent that this would not be effective.   After a brain storming session, it was discovered that a senior executive who had left the business some years earlier might be available for a temporary role, this manager was respected by the team and, by a stroke of luck, between engagements and available for an interim project.

A communication plan was developed to advise the Business Unit team of the changes and the business continuity plan was developed to maintain the business levels and stabilise the business unit.

But establishing an effective continuity plan with a solid manager in the leadership position, the business bought time to undertake a considered executive recruitment process to identify, engage and onboard a suitable permanent replacement.

 

Some learnings

Some of the learning that the client has taken from this situation include

  1. It is important to have a solid HR function and the policy and procedures in place to recognise toxic performers.
  2. Senior management needs to address HR concerns and disputes quickly to minimise there negative impact.
  3. Business continuity and succession / talent development planning should take into account of senior managers leaving suddenly.
  4. Plan thoroughly before executing a plan to remove a toxic employee from the business.