Dismissal of top managers: When bosses lose their jobs

In listed companies, the dismissal of top managers is often published as an ad hoc announcement: Relevant media then speculate about the background, objectives and meaningfulness of the measure. It is much less frequently discussed what such a dismissal means for a top manager and how companies can effectively support their managers in the separation process.

Because that's exactly what they should do - both out of a sense of responsibility toward the departing executives and in their own interests. After all, a tough separation dispute can be expensive and protracted, and in the end it harms everyone involved - the people affected and the company. It is therefore worthwhile, particularly in the case of top executives, to fulfill one's corporate responsibility and duty of care even after a dismissal.

First the lawyer, then the shock

It doesn't matter whether the company is realigning itself or whether an unwelcome internal competitor has won the decision-makers over to his side: An unexpected dismissal is perceived by most of those affected as a great injustice. Unsurprisingly, the first thing they do is contact their lawyer. And that's a good thing, because a close examination of the contractual agreements and the current situation is essential in such a situation. In addition, a competent employment lawyer can still optimize the terms of termination and demand sensible additional benefits. This can include, for example, competent top management outplacement support, which assists the person concerned in this difficult phase with advice, intelligent strategies and excellent contacts. Such an offer can, of course, also come from the responsible company itself.

Economic concerns at the highest level

Of course, top executives also receive top salaries. A top manager will therefore certainly not immediately end up in the poorhouse - also thanks to usually generous severance payments. But even at this level of income, a certain discomfort sets in when the regular payments fail to materialize. This is because personal lifestyles and the obligations that need to be met have often developed in parallel with the increase in salary. These habits and liabilities cannot be easily reduced. This is why top earners are rarely unimpressed by the loss of their high-paying position, even in financial terms.

Sudden silence

But the psychological effects are often much worse: Just when they were needed, highly respected and courted, a dismissal of top managers means far more than just a job loss. Often, the shock extends far into their private lives and shakes the foundations of their personalities. After all, performance- and career-oriented personalities have a particularly hard time dealing with a sudden loss of significance. Friends and family also often react with irritation when a successful person, who until then had been extremely focused on his or her career, suddenly spends his or her days waiting dejectedly for phone calls. Sometimes, top executives who have been recalled can become downright lethargic. This also has to do with the fact that they often have no experience with such setbacks, because their career had been reliably on a steep upward trajectory up to that point.

No blind actionism!

But beware: Even supposedly sensible initiatives with which those affected try to take their fate into their own hands - as they are accustomed to doing - can have an extremely counterproductive effect. For example, many top executives believe that their good network and excellent qualifications will make it easy for them to find a new job on their own. Consequently, they pick up the phone, call their valuable contacts and - still under the strong impression of the experience - report the dismissal. Not infrequently, they also complain a bit and wash their dirty laundry. Unfortunately, such conversations do not lead anywhere, because neither curiosity nor solidarity nor pity are motives for entrusting someone with a new responsible task in top management.

A new and good legend must be made

An experienced and qualified consultant knows how important it is in such a situation to turn the defeat suffered into a success story. He supports his clients in developing a new, positive and exciting legend that credibly underpins their attractiveness and competence for new leadership tasks. And this is not simply a matter of making up a story. Rather, it is important to accompany the person concerned comprehensively, to bring his personality holistically back into balance and to develop, together with him, a new, forward-looking career strategy.

Not a case for the application portfolio

Exciting top positions in attractive companies are not advertised on Stepstone, and a conventional application does not help here either. A combination of systematic job hunting and referral marketing is therefore important. The goal is to transport a top executive to a suitable new position. For this to succeed, a consultant should have an excellent network and a very good reputation in the top echelons of business. In this way, he can draw the attention of prospects or advisory board members to his client and set the "advertising drum" in action as quietly as efficiently. The effectiveness of this approach is demonstrated not least by the fact that top managers without accompanying consulting spend an average of 9 to 12 months without a job, whereas with appropriate support they have already found a new position after 3 to 6 months. Ideally, such consulting only ends when onboarding has also been successfully completed.

Conclusion: Dismissal of top managers does not leave them unscathed

When top managers are unexpectedly recalled, it is not unusual for their whole world to come crashing down. The loss of the job is accompanied by feelings of loss of significance, economic anxiety and helplessness. This can have a lasting impact on the personality, but also on relationships with partners, friends and families. Companies are well advised to avoid the effects of understandable anger and despair and protracted legal disputes by supporting those affected with appropriately designed counseling to cope with the situation and find a suitable new top responsibility very quickly.

Checklist: What to do when top managers are dismissed

Top managers who have been dismissed face a major new challenge. What they should do in this difficult situation - and what to refrain from doing:

What to do:

• Find allies and new contactsInternal and external networks should always be cultivated. Because allies in the company sometimes see the change coming before the top manager suspects anything. After the dismissal, it is important to establish new contacts in order to keep an ear to the market.
• Financially secureThe loss of a job, even with top salaries, leaves a hole in the household budget. It is therefore important to make provisions and secure the financial situation while resources are still available. The exit negotiations should also focus on an appropriate severance package.
• Complete ongoing projectsWhat has been started should be finished. The farewell should be well organized, recalled top managers should "collect" their deserved recognition.
• Search new activities: Time with the family, hobbies or involvement in honorary offices, associations or committees give executives a meaningful task in the time of upheaval.
• Involve external advisorsProfessional career counselors provide support through individual coaching and also offer concrete help in the application process. Exchanging ideas with others who have had similar experiences can also help in coming to terms.

This is something to avoid:

• Emotional communicationAnger and verbal blows are of no use - on the contrary. If you want to fall back on your former employer as a credible reference, you should curb your emotions and remain professional.
• Arouse compassionNo one has ever been elevated to a management position out of empathy. So going down the pity route in your own professional network won't get top managers who have been recalled any further. Instead, they need to emerge from the crisis in a strong position.
• The others are always to blameThere is always a reason for dismissal. This does not necessarily have to lie in the incapacity of the top executive. Rather, the company can also change. Nevertheless, dismissed top managers should check where they may have made mistakes - and learn from them for the new position.
• Falling into lethargyAnyone who is used to being needed at work most of the day will fall into a deep hole after losing their job. However, those affected should quickly find their way out of this state and also accept help from their (personal) environment.
• Blind actionismAfter being dismissed, top executives should take their time and not pick up the phone themselves to find a new job. The storm should first calm down, external support by e.g. career consultants should be consulted.

Author: 
Dr. Eckart Eller is CEO of the EL-NET Group. https://www.elnet.group/