What’s That You Say: They’re Looking For My Replacement?

By Mark Borkowski

I spoke to Larry Smith is the founder of Kathbern Management, a management recruiting firm. Earlier in his career, as President of the Highway 407 Toll System, Larry built a team of 150 people from scratch to start the operation near Toronto. He also managed a company operating cable TV systems in 1,000 communities across Canada and the U.S.

You are General Manager of ACME Widget and your current Manager of Widget Distribution isn’t working out. After spending several months engaging with him about his performance and moving from verbal warnings and coaching to a more formalized and documented performance improvement program, he still isn’t improving fast enough. He will have to be replaced.

Rather than terminating him, providing him with severance pay and leaving the position open, or giving him working notice of termination (perhaps not wanting a lingering uncomfortable situation), you have decided to recruit his replacement on a confidential basis while he continues to work. At least he will be contributing something rather than leaving an open hole in your organization. ACME Widget has a great reputation in the community and is on an exciting path to growth. Many people would love to work there.

Good luck with that. There is a very high likelihood that one of two things will happen:

1. Discovered

The employee in question may find out that he is about to be replaced and you will be in the awkward position of having to deny it or confirm that it is all so true. If you deny it and then are successful in finding a replacement, the truth will then come out and the incumbent will know that his suspicions were accurate all along. It doesn’t matter so much that the incumbent considers your actions to be devious but other employees may agree with him. Not only that, but if the problem manager can figure out that he is about to be replaced, chances are good that others in the organization will discover that as well, creating fuel for a lot of time-wasting and morale-destroying gossip.

2. Stealth Succeeds

You may manage to disguise your search so well that the incumbent is completely unaware of what you are up to, and other employees are equally unaware. The problem is that the lengths that you have to go to, to ensure that the search for the replacement manager is completely confidential, have made it almost impossible to actually do the search effectively. You have disguised the job title, company and the location very well so that instead of “Manager of Widget Distribution” at ACME Widgets in Kitchener, Ontario, the job posting is for a “Department Manager” at “Confidential” in “South Western Ontario”. This description is so vague that many people will not bother to apply. You are also totally unable to use ACME Widget’s great reputation and story as a means of attracting candidates.

What to do

If you are lucky, you may have a very small group of potential candidates (internally or externally) that are already known to you and who you could approach on a confidential basis to inquire about their interest in the role and willingness to have a discussion. If this works out, you can smoothly transition to the new appointee while simultaneously terminating the incumbent. Best scenario.

More likely, there won’t be an obvious replacement so a search will be required. If you feel that a confidential search isn’t the way to go because of the problems noted above, then you have two choices:

1. Working Notice

Have a frank discussion with the employee and provide formal notice of termination at a future date that meets the terms of the employee’s employment agreement and of the employment law in your jurisdiction. In taking this route you will have considered the implications and weighed the positive aspects of having him continuing to perform his duties, even at his usual below standard pace and/or quality, against the potentially negative aspects of any disruption or discomfort that may impact company morale and performance of the rest of the organization from his continuation.

2. Immediate Termination

If you come to the conclusion that working notice is a poor option given the situation, then you need to make a clean break with the employee, providing written notice of termination and taking steps to ensure that company data, property and physical security have been secured, with them departing immediately.

Under either of these scenarios you will have cleared the way for embarking on an open and unencumbered search for a replacement. You can be very specific as to the job, the duties, the location and you can use the reputation and future prospects of your organization as a positive tool for attracting the best talent available.

Whichever course you decide to pursue, you can lessen the blow to the terminated employee by offering some form of outplacement counselling to help them best recognize their strengths and develop a strategy for re-entering the employment marketplace. Many options exist among outplacement counsellors and career coaches.

Unless you and your team are very knowledgeable and well versed in the legal implications of this process, it is recommended that you seek legal advice in order to minimize any potentially negative (and costly) consequences.

Larry Smith can be contacted at 416-4044 ex. 101 or larry.smith@kathbern.com

Mark Borkowski is president of Mercantile Mergers & Acquisitions Corp. Mercantile is a mid-market M&A brokerage firm. Contact: www.mercantilemergersacquisitions.com

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