Why managers get the sack, and why it is that hardly any of them know the real reason in their own case. By Adele Ferguson
If you are over 40 and in a senior management role, believe in command-and-control leadership, shun technology and view your skills as complete, chances are your employer will be sizing you up for the sack. Opportunities for promotion will disappear, until eventually you are told you are redundant. In the real world, most managers never get told the truth about why they are being dismissed. The reason for the duplicity? To avoid the threat of litigation through the Industrial Relations Commission or Anti-Discrimination Board.
For this reason, when plays, novels and movies deal with job loss, they are far-fetched because characters are told brutally and honestly why they are being dismissed. A classic example is Arthur Miller’s play Death of a Salesman, in which the long-serving middle-aged Willy Loman is fired from his position with the words: I don’t want you to represent us. Sit down, take five minutes, and pull yourself together, and then go home, will ya? I need the office.
If Loman were real, he would have been told his job was being made redundant, the sub-text of which is: You don’t fit into the new culture, you have no strategic vision, your style is out of date and you are too old.
So why do managers get the sack? According to a group of outplacement specialists, the reasons vary from performance issues to cultural issues to not keeping abreast of technology, new management styles and globalisation.
The following are the top 10 reasons why managers get the sack:
* Atrophied skills. John Banks, a director of the consultancy firm Morgan & Banks, says a study of his clients reveals that many of them are sacked because their skills are rusty, and they have not kept up with management and company issues.
* Not meeting performance hurdles. Gil Thew, vice-president of DAC Group, says one of the main reasons managers get sacked is that they do not meet their revenue targets four quarters in a row. And they do not meet their profit forecasts for a year and a half.
* Resistance to change. Rosemary Foxcroft, chairwoman of DBM Australia, says managers that are inflexible and unwilling to adapt to new processes and technology will not survive the new era.
* Poor cultural fit. Chris Hart, principal of Hart Consulting, says that one of the main factors in a sacking is when managers cannot fit into a new culture. Culture is important to the success of a team and a company. So, if someone obviously doesn’t fit in, they have to go. This explains why many managers get sacked after a merger or acquisition. In any merger, two cultures come together; and usually only the dominant culture survives. Managers that do not adapt to the new culture are let go because they become disruptive and can have an adverse effect on the performance of the new entity.
* Philosophical disagreements. Banks says that many managers leave when a business is going through a big downsizing or changing direction and they do not agree with the new direction.
* Career plateau. Foxcroft says that personal performance can be a factor in termination when managers stop learning new things. How many managers can’t turn on their computers? In the new information era, you need to be able to access information from many places and be open to learning new things. Many managers feel they know everything.
* Personality clashes and discrimination. Hart says that factors such as ageism, sexism, racism, sexual harassment or plain old personality clashes will transmute into complaints about performance or politically incorrect behavior. It is usually a performance issue. I would say the top eight reasons why managers get sacked are performance related.
* Management style. In the new management era of empowerment and collaboration, which has displaced the command-and-control autocratic style, managers need to be able to communicate with staff. This is rarely taught in formal education programs, and informal education is usually limited to interacting with those who are similar to us: family and friends. So, because only limited opportunities exist for learning interpersonal skills, it is easy for managers to assume they are performing well in that area. With 360-degree management surveys, managers are now measured on how they relate to staff. If they do not fit in, they are dismissed. J. Simonetti, in The Key Pieces of the Career Survival and Success Puzzle, says that ignoring personal development because it is touchy-feely only identifies a manager as a potential has-been.
* The sacrificial lamb. Thew says that sacking subordinates gives incompetent senior executives someone to blame and buys them time as they go through the transition period until a new manager can be held accountable. The timetable is: three months to dismiss a subordinate, three months to recruit a new one, and six months to let the new one settle in and fix up the mess. That gives an incompetent senior executive a year’s grace where nothing can be expected of the subordinate in question and in which said senior executive can find a new role in the organisation and leave his problem behind (or take it with him). This is a common sacrifice.
The ignominy of the sack is reflected in Australian Bureau of Statistics studies of people not in the labor force. Subjects are split into two self-explanatory categories: job leavers and job losers. One reason that the leavers cite for quitting their last job is unsatisfactory work arrangements. That is, they did not like the work, the conditions, or the people. For some reason, the job was not for them. There is no corresponding reason in the job losers category.
Job losers did not become unemployed because they were found to be unsatisfactory. They were all retrenched, or the job was transient, or they were injured, or the business or division closed. It is hard to find people who admit to having been rejected, or that someone in a position of authority over them had rejected them on personal grounds. They hide behind more acceptable reasons such as retrenchment.
Getting behind the lies of why people are dismissed reveals a change in organisations as they adapt to a competitive, global, technology-driven world. Simonetti argues that, although the worst of the downsizing boom may be over, there is a continuing threat of Darwinian selection hanging over every manager: organisations want the best.
All downsizing exercises ultimately come down to a choice between who stays and who goes. The ones that are let go put it down to interpersonal issues rather than performance issues, according to Banks. He says that sometimes employers collude to disguise sackings, to gain them the tax benefits that go with redundancy, or out of fear that rumors of poor executive performance will reflect on company performance.
DBM Consulting Group’s annual survey of retrenched executives and managers reveals that in 1999 most of the people it worked with in outplacement programs lost their jobs through no fault of their own. The past few years have brought record numbers of mergers and it is not surprising that one in five executives and managers lost their jobs as a result.
The DBM survey reveals that 75% of managers lost their jobs due to reorganisation and restructuring, 20% due to mergers and acquisitions, 3% due to performance and chemistry, 1% due to career plateauing and 1% for other reasons, such as atrophied skills and lack of flexibility.
If 75% of managers believe that they have lost their jobs due to reorganisation and restructuring, then the truth is that they did not fit into the new culture. If there is a restructuring, the chances are there is a new chief executive who wants a different group of people running the operation, Hart says.
For instance, Paul Anderson was appointed chief executive of BHP in December 1998. In less than six months he sacked most of the senior executives. His mission was to smash BHP’s bureaucratic, blokey culture, dismantle its conglomerate-like structure, and turn it into a global company based on the latest management philosophy: knowledge management. To do this, Anderson wielded the axe on more than half the senior managers. Many layers of middle management have also been shed.
A recent case of dismissal of senior managers occurred in the music industry when it was discovered that a finance director and a senior manager were conducting an affair while married to other people. A source close to the sacking said: The female manager was sacked on the grounds that the chief executive had lost confidence in her. She was told that she had used poor judgment. The same thing happened to the finance director. They were taken to the windowsill and encouraged to jump. They did; and the outside world thinks it was for other reasons.
The affair was used as the excuse for the sackings, but the real reason was chemistry. There was a clash of personalities between the chief executive and the finance director.
One of the least talked-about factors in a sacking is age. In Australia there is now no official retirement age, so how do you get rid of a person who is getting too old? In a world that worships youth, ageing managers can be considered a hindrance.
Sackings are rarely easy. As Willy Loman in Death of a Salesman says: I put 34 years into this firm. You can’t eat the orange and throw the peel away; a man is not a piece of fruit! For Loman, his self-esteem and dignity depended on his job. When he got too old and couldn’t adapt to change or a new way of doing business, he was callously terminated. You gotta admit it, his boss says, business is business.
As globalisation and electronic commerce wreak havoc on local businesses, career survival is becoming a national obsession. Organisations want the best and are ruthlessly dismissing those who do not meet the grade. An ability to adapt to change, to empower staff and to be flexible and global in outlook are a few of the attributes required of the new millennium manager. DBM Australia, an outplacement specialist, has identified 10 traits required for surviving and thriving in the career jungle.
* Be technologically savvy. There is not a single area of business that will remain immune from the advancements of technology. Good managers do not need to be experts in all facets of technology, but they need to stay abreast of technological developments, and work out which ones will improve productivity and effectiveness.
* Pursue knowledge management. Information will continue to be an invaluable asset, and the new manager will have to have the skills to retrieve, understand and repackage information swiftly.
* Able to achieve emotional balance. Stress is unavoidable; balance is a key to managing it. The successful manager must be able to help others maintain that balance.
* Have interpersonal skills; managing relationships, not employees. In the dynamic workplace of full-timers, part-timers, freelancers, temps and flexi-time workers, new managers will need to understand the weaknesses in these varying groups and utilise their inherent strengths.
* Be flexible and adaptable. In the changing world of work, a successful manager will have to adapt to dynamic environments. This means they will have to switch from strategist to mentor and to team leader.
* Know resource management. As companies peel back to the essentials, their main competitive advantage will be the experience and expertise of their employees. Coaching, mentoring and succession planning will be mandatory in a good manager.
* Adopt ethical practices. Sound ethical practices will be required, as they are the key to promoting loyalty, pride and commitment in employees.
* Be able to thrive in the midst of diversity. Managers will have to learn to appreciate the customs and beliefs of their staff and the people that they do business with globally.
* Be able to lead, not manage. Managers perform a critical function, but essentially they maintain the status quo and focus on systems. In comparison, leaders are innovative, look long term, and focus on people. The key skills that people identify as being important for leadership are the ability to inspire trust and the ability to motivate. A good manager will have to show these attributes as well as bear the hallmark of a good decision-maker.
* Be able to demonstrate vision. Vision is something more than a quarterly objective or personal aim. In the tough new competitive world, managers will need to have a vision or be able to share a vision of where their company should be, and what is needed to achieve that vision.
All these factors can be influenced by managers to a greater or lesser extent. The message is clear: don’t rest on your laurels. To do so is risky and could result in your joining the growing pile of management corpses on the scrap heap.
Termination is stressful. What do you do the morning after you have been fired? You can get career counselling through an outplacement agency, fight the decision through the Industrial Relations Commission (IRC), or take the money and open your own business.
After being sacked, the most common emotions are anger, sadness, fear and relief. All such feelings are normal, but they need to be dealt with before deciding what to do next.
For those who want to put up a fight, there are several avenues of recourse. If the decision is unfair and you are earning less than $70,000 you can claim unfair dismissal through the IRC. The case is generally heard within four weeks, but it must be lodged within 21 days of the dismissal. If your salary is over that threshold, there is legal recourse in the unfair contracts section of the Industrial Relations Act.
One of the most publicised cases of unfair dismissal was the sacking of former Coca-Cola Amatil chief executive Norb Cole in March 1998. Cole sued the company for $20 million and settled out of court for $4 million.
If you believe that you have been fired on discriminatory grounds race, sex, sexuality, marital status, pregnancy or disability the issue of redress is more complicated because the case can be put to the IRC, or as a discrimination case through the Human Rights and Equal Opportunity Commission or the Anti-Discrimination Board.
Managers who need counselling would do well to contact an outplacement agency that specialises in career advice. Alternatives include online career counselling such as that provided by www.careers.net.au or www.worklife.com.au.
A study by the outplacement specialists Davidson & Associates reveals that the older managers are the more likely it is that they will set up their own business after getting the sack. The survey shows that 33% of people over 50 become self-employed after losing their jobs. The survey of more than 1000 people retrenched or made redundant in 1998-99 shows that more than half moved into a new industry sector. They were also more inclined to move interstate to find work.
Job loss is a severe emotional trauma. However, it can provide the motivation for starting a new life and thinking about how to do things better next time around. Jobs in the second half of the 1990s have changed drastically compared with previous decades. The labor market is less secure, but it can also be more lucrative if performance hurdles are met and redundancy packages are negotiated well.
Reason for job loss
The majority of people with whom DBM works in Outplacement programs lost their jobs through no fault of their own. The past few years have seen record numbers of mergers and it is not surprising that one in five executives and managers lose their job as a result of a merger or acquisition.
Source: DBM’s Annual Survey of Retrenched Executives and Managers