Corporate Cancer Kills Companies
Another great day at the office; the team’s jelling, metrics are positive, and you’re executing on the strategy. Excitement is in the air, while you plan for a profitable year or a double digit multiple on exit, life is good. Sleep is optional, you want to be back in the office orchestrating the next move, continuing to execute on your strategy.
Your Slack blows up, texts are flying, and you haven’t even hit the front door yet. You walk into the office to deal with the flurry of team chatter. A team member has disrupted your trajectory. There is dissension in the ranks, and now you must quickly identify the issue, culprit, misunderstanding or actual legal issue. It happens every day to corporate executives around the world; simple mistake or corporate sabotage? A rumor, or is it a form of corporate cancer?
All it took was a flurry of rumors, finger pointing, and innuendo to whip up the turmoil. Could it have been stopped, who is involved, did I cause it or maybe one of my executive’s is misaligned. And the fallout may have only begun. It starts, you first decide whether to bring the executive team together or question them separately to identify the spark that set fire in your office, but you as the CEO are too valuable to spend your time ferreting out the issue. Should you delegate to another executive or the human resources department? That would take it off your task list, out of sight out of mind. At least for the time being. However, if it is corporate cancer, it’ll be back, and potentially with a vengeance you weren’t expecting. We all know cancer grows quietly.
Now the questioning begins. First, self-examination, did I, as CEO, miss something? Should I have fixed that issue, last quarter, that became the catalyst for this headache? Did one of my executives keep something from me? What should I do now? Is it an intrinsic or systemic issue? Can it be fixed? I better start damage control. Do we have corporate cancer?
Where to start? Not all corporate challenges are created equal, so it is vital that you identify the actual issue, repercussions, and hopefully the actual catalyst, which is your goal. This may take a team effort, so take 10 minutes and define your strategy. I reiterate, this step is important, because you may not find the issue the first time, which would mean another strategy must be employed. For example, your first strategy is to work on identifying the culprit by yourself. Your second strategy may be to engage the HR department and a third your executive team. Additionally, like many companies who suspect they have a team member creating problems, i.e. corporate cancer, the true damage may not have been realized. And when it happens again, and it will, significant revenue or your job may be on the line or even your stock price may take a hit, and then it’s too late, the damage has been documented.
I’ve coached over a thousand CEO's on investor pitching. In the process of developing the deck messaging, CEO's confide in me about some of their challenges and concerns. And yes, it is important that these come out during the process so they can be handled correctly. So, to be a good coach, you must be a listener, tempering your reactions, and advise them with a non-judgmental tone. One of the key concerns many CEO's have brought up is the question of difficult founding partners or employees who are, many times friends. In some cases, they don’t even realize they have an issue.
I point out that you don’t have multiple options when dealing with corporate cancer, like you may have with medical cancer treatments. You are probably wondering how I come to this conclusion? I’ve listened to (and tried personally) different strategies throughout the years, but there seems to be only one that minimizes the overall damage and relieves the investors concerns. I’ve summarized the steps in the following section, that I hope, will give you the best possible outcome.
Caution, these three steps can be very challenging for most CEO's to deal with. Because it is so personalized, CEO's tend to let the issue fester for a few weeks, months and I have even seen multiple years of pain. And we all know what cancer does when you leave it alone or treat it with pain reliever. It works its way into every area of the body. The company with multiple years of corporate cancer suffered a catastrophic event when they finally confronted the issue. Stakeholders were the big losers. Don’t forget that some of your most important stakeholders are your other C-Suiters and Executives who are studying how you handle this festering problem employee (they don’t care who they represent to you) and they are looking for decisive fairness. This is nothing more than making the hard decisions and applying the same rubric to this person that you would apply to them (fairness).
GET INVOLVED IMMEDIATELY
Let me point out the obvious, you are the CEO and by default are a fiduciary in the eyes of your stockholders and the law, getting involved quickly is not an option it is your duty. I know this is not what you signed up for as CEO, being a therapist, but it’s necessary for strong leadership and shareholder protection. So, get involved early and when you have the facts, make the tough decisions. Involvement means asking the right questions around the issue itself. It is important not to attack individuals as you go through the entire process. This may take minutes, because you have a fairly good idea where to start, or a few days, but as I have found over the years, the cause is not always easy to identify. As with physical cancer, it may show up in one area, but it was caused by another. For example, a sales team member may be affecting the technology team. I do recommend testing your conclusion. You don’t want to release the wrong person, which has happened in more than one case I am aware of at both small and large organizations.
Get involved quickly, when they see little to no action, you by default, become part of the problem. And that leads to deep rabbit holes. If the cancer is in the company, it may have been causing issues on a regular basis. Once you are involved, identify the real culprit. CAUTION: Sometimes the problem can be a corporate process or system, be ready to clean your own house first before blaming good and honest employees.
Your first step to recovery can be a fairly simple process, however, if the cancer has been around for a while, you may think you know the primary cause, but test your theory with questions, comments and a little extra digging. I repeat this because it is a serious issue and you don’t want to be seen as a leader that killed the company by overreaction or misinformation. You don’t want to hurt your team because the culprit was clever and led one of your team members astray. Or that there are multiple team members involved. Cancer spreads when left undetected. What I am saying is, do your own homework, including executives. Accuracy counts in the eyes of the team and your investors.
As with physical cancer, the corporate version isn’t going away without treatment. And the treatment needs to be driven by the CEO. Yes, it does take your eyes off your corporate execution, but if you don’t, the chances of a full department wide, or corporate wide collapse is inevitable.
Beginning the treatment requires a very precise diagnosis, which you learned about in the prior section. Step one, consult with your advisers, human resources, legal and possibly a friendly board member or two. I respect that most CEO's think they can talk a bad employee into changing. And yes, when it is a minor infraction, maybe they can, but leopards can’t change their spots. And if the cancer comes back, next time it will be even more damaging.
So, in each case be sure you’re handling the issue by the book. And don’t worry about the fallout, plan for it by working with your team and advisers prior to the action with thorough succession planning at all levels. Succession planning is a corporate best practice and should be done throughout the organization for normal employee turnover. There are always unknowns but controlling the cancer is your chief concern. If there are legal consequences be sure you understand the repercussions and their effects on your goals.
Step 2 is taking decisive action, which may feel like you are about to create more problems than you solve, but let me assure you, when the cancer is gone, the company is relieved. And your acceleration can be felt. And yes, I realize that the individual may be part of a team, with friends throughout the organization that may be key to your overall success. Or at least you perceive them to be integral.
When the shakeup comes, you will quickly find, after the cancer has been removed, your team will step up and fill the gaps or others affected will move on. I’ve seen companies replace CEO's, CRO's (chief revenue officers), and founding partners. The process is not always pretty but it is necessary. You don’t want to have this cancer reoccur. Take emotions out of the decision process and focus on wisdom.
Remember, there is a nice way to say everything, and it will pay off over time.