No company wants to part ways with their employees, especially executive team members. Unfortunately, an executive’s drive and skill set won’t always match up with company goals or vision.
According to Altrata’s Spotlight: C-Suite Turnover in the U.S. report, from 2018-2022, the CFO position experienced 16% turnover, CHROs experienced 18.9%, CMOs 21%, and COOs experienced 27%.
Suffice to say, it happens.
It’s possible that the leaders who got your company to where you are now may not have the insight or skill sets to take you to the next level, and it’s time to re-evaluate their overall fitness. Making sure your company reaches its full potential, stays healthy, and maintains its competitiveness means having the right people in the right seats during every stage and evolution of your company.
In addition, keeping an unengaged, disenchanted, or unqualified executive in your company can be more damaging in the long term than just turnover rates. They can frustrate direct reports and other team members, lose customers, and destroy progress toward the company goals.
It’s never fun to let an executive go or even have to re-evaluate whether an exec is fit for their role, but sometimes, a business situation will call for it. It can be a challenging topic, so let’s unveil some of the insights, tips, and knowledge that can help throughout the process.
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Tell-Tale Signs It’s Time To Re-Evaluate an Executive
Do you have the right executive in the right seat? Do they have the right mindset to take your business where it needs to go next? How do you know when it’s time to re-evaluate an executive and/or their role?
It’s not always a clear-cut situation, and every team and executive is different. However, there are some distinct things that may signal a necessary change in leadership or indicate it’s time to topgrade or re-evaluate an executive.
Fails To Follow Through on Strategic Goals Contributing to ROI
Executives should align their efforts with the company’s goals, ROI being of the utmost importance. If you have an executive who consistently misses the mark on contributing to the organization’s (or their department’s) ROI, this could signal they aren’t the best person for the job.
Example: A Chief Marketing Officer continuously falls short of their campaign objectives, resulting in flat new business growth. After re-assessing their goals and setting new expectations, the exec still doesn’t follow through and can’t provide any justifiable reasoning.
Shows Minimal Interest or Investment in the Company
If an executive lacks overall enthusiasm and passion for their tasks and projects, they might not have the commitment your company needs. This apathy can cause poor performance that could damage your organization’s sustainability and growth. Not only could a lack of interest affect the exec’s own performance, it could influence the attitude of their teams.
Leadership starts at the top for a reason, and it’s imperative that all execs have and actively show a genuine passion for what they’re doing and asking their teams to do.
Example: A Chief Technology Officer is reluctant to research and implement new innovative technology that could help your company grow. They don’t believe the time it would take to implement new tech would significantly impact the company as a whole.
Several teammates have repeatedly asked for more resources and innovative tech, and the exec always responds by putting the research off and seems unwilling to set aside time.
Causes Inter-Team and Cross-Functional Conflict
A successful leader inspires their team to work together and minimizes conflict. An increase in team disagreements and “drama” may indicate that the executive isn’t communicating well or lacks crucial leadership skills and EQ.
It’s great if an executive can relate to their teammates and direct reports, but it’s also important to remain balanced and establish important boundaries that minimize the opportunity for conflict.
Example: If a Vice President of Engineering plays favorites, is stingy with information, and can never seem to unite the different department heads, they may lack the high emotional intelligence (EQ) required for the role.
Creates Low Organizational/Department Morale
Low morale can be the breaking point for a team. It can lead to disengaged, unproductive staff, and high turnover rates. If a senior executive can’t inspire and motivate their teams, they may need to be replaced by an executive better suited to the position.
It might even be worse yet if a senior executive appears to be the sole cause of this atmosphere with unrealistic expectations, lofty deadlines, and pressure.
Example: Imagine a Chief Human Resources Officer who repeatedly brushes off relevant employee concerns about the working environment. They take employee feedback personally and, in response, are reluctant to support. This could cause far-reaching negative results and perpetuate what’s causing the concerns and low morale.
Contributes Little to or Opposes the Company’s Brand Identity and Goals
Businesses rely on their executive teams to push forward the company vision and align their teams to the common goal. If a leader isn’t helping build and maintain the brand, they may have lost sight of or don’t fully understand it. This performance could weaken the brand and hurt customer loyalty.
Executives need to be active proponents and extensions of their orgs. If they’re unwilling to be a cheerleader for its values and goals and are unsure of its brand identity, it could be a sign to re-evaluate.
Example: An unengaged Chief Branding Officer who isn’t restrictive enough on branding consistency could allow it to be watered down and, eventually, become completely unrecognizable to not only the public, but internal teams.
Evaluating Your Current Leadership Team: 3 Actions You Can Take To Determine If You Have the Leader You Need
Evaluating your current leadership team isn’t a light task. Many stakeholders are involved, and the decision to keep or let go of your company’s executives can impact everything from team morale to the company’s bottom line.
Evaluating leadership is an incredibly intricate art.
It’s not just about the executive’s ability to crush goals, but a much larger picture that requires turning over every stone and asking the right illuminating questions to determine an accurate assessment.
If you’ve determined it’s time to re-evaluate an executive, here are four actionable steps to help you arrive at the most informed and balanced conclusion.
1. Evaluate Their Performance Metrics and Business Outcomes
The performance indicators and metrics you choose to measure should reflect the executive's responsibilities, which can encompass financial factors like revenue growth and non-financial aspects such as customer satisfaction.
For instance, if your business is an ecommerce platform and you're evaluating your VP of Sales, you may look at metrics like:
- Conversion rates
- Cart abandonment rates
- Customer lifetime value
- Win rate
- Average deal size
Regular performance reviews help you assess the executive's actual performance against those goals and KPIs. Here’s where you’ll consider quantitative metrics and qualitative insights — including feedback from stakeholders like your board of directors.
The most important thing to remember is to focus on measurable outcomes, especially when making a major decision like whether or not to keep an executive. Your evaluation should consider not just what the executive achieved but how.
2. Ask Appropriate Questions To Evaluate Their Commitment and Fitness for the Role (Topgrade)
Asking targeted questions can assess an individual's commitment and suitability for a specific role. By posing these questions strategically, you gain valuable insights into how well an exec is (or is not) aligned with your organization's goals. You can also uncover whether they have the potential to thrive in the position.
Example questions to ask:
- Are they in the right role? Some executives may be awesome… if they were in a different role. This question sheds light on whether their current role best fits their strengths and skill sets.
- How have they aligned the company’s mission and values with its long-term strategy? Productive leaders follow a purpose-driven approach. If they aren’t in sync with your organization’s mission, they can’t make a significant impact.
- What ROI is attached to them? Did their contributions positively impact the company’s bottom line? Did their actions spur others to make a measurable impact on the company? Inspiring creativity, motivation, resourcefulness, and determination in themselves and others offer significant returns. A company’s ROI on an executive should always be high.
- How do they ensure transparent communication with your teams and shareholders? Consistently sharing information and encouraging open dialogue through multiple in-person and virtual channels increases productivity, strengthens relationships, and builds trust. Are they doing any of those things? Are they doing them successfully?
- How do they shape and influence the company culture at the C-level? The best leaders lead by example to build an inclusive, positive company culture. They should be doing so at all levels, not just with their direct reports. Is their attitude and passion contagious? Do they engage in after-work festivities? If they weren’t here, would the culture/company feel their loss?
- How do they track and measure their personal performance and that of their team? A detailed answer to this question exhibits a passion and willingness to continually look for ways to improve. For example, if a CIO can show you their personal core values and growth track, that’s a person who is interested in continuous improvement.
- How do they foster a culture of innovation within the company? Getting involved and embracing innovation gives evidence of agility and an openness to change. For example, is this person continuously bringing new ideas to the table? How vocal are they when it comes to product launches, and what tools are they using?
- What are they currently doing to further develop their leadership skills and knowledge? The savviest leaders know they must keep up with new market trends. Executives who talk about reading journals, participating in training, and getting involved in other learning opportunities are committed to ongoing improvement.
3. Observe How They Deal With Team Dynamics and Collaboration & Get Feedback From Their Team
You can learn a great deal about your company leaders by watching how they interact and communicate with teams and other executives. Hopefully, you’ll observe them fostering mutual respect, inclusivity, open dialogue, and robust collaboration.
It's equally important to pay attention to how others speak about executives. Listen to employees, peers, and stakeholders to gain insights into their perceptions of these leaders.
Do they speak positively about their leadership style, communication, and ability to foster collaboration? Are there consistent mentions of their supportiveness and dedication to the team's success? These external perspectives can provide a comprehensive view of an executive's effectiveness.
Flip the Script: Conduct bi-annual leadership reviews, where team members and individual contributors do a formal review of their managers and leaders to gain insight into their performance and overall effectiveness.
What Should You Look for in an Executive Replacement?
If you’ve made the hard decision to part ways with an executive, it’s essential to know what to look for in a replacement to avoid parting ways again. Before you start the talent sourcing process, consider the following qualities and experience.
They’re Driven Equally by ROI and Emotional Intelligence (EQ)
Want to gain a serious competitive edge? Make EQ a hiring priority. Harvard’s EI Advantage Report finds that 64% of emotionally intelligent companies have a high degree of empowerment and tolerance for risk.
Companies need an executive who focuses on growing revenue and has the interpersonal skills to manage your organization’s human dynamics. An executive focused on ROI with a high EQ is a “have-your-cake-and-eat-it-too” scenario: You can trust them to meet financial goals and motivate employees to act as productive team members.
They Regularly Use the Company Vision To Inspire Employees
Leveraging a sense of mission to inspire employees is a critical skill every executive should have. That’s why your replacement executive should excel at selling the organization's vision.
They might use language from your company’s branding, start a meeting by reciting the company’s mission, or other easy tactics that trickle down and inspire the team.
This can also help them recruit and hire the best talent, keep their teams engaged with the company’s long-term objectives, and attract investors.
They Have an Insatiable Desire To Solve Complex Problems
A top-performing exec should embrace a good challenge. They don’t view complex problems as an insurmountable blocker, but an opportunity to collaborate, think outside of the box, and push the boundaries of what’s possible.
Not only do they not shy away from them, they might even actively search for them and thrive when problem-solving.
They Exhibit a (Healthy) Risk-Taking Mindset
Risk-taking, especially at an early-stage business, is a natural ingredient and table stakes when trying to push a business forward.
There is no innovation without risk, and employees with this trait will take the company in a positive direction by embracing the unknown and taking reasonable chances.
They Have a Sense of Humility
If an executive is full of self-importance and ego, their interactions with customers and other employees may be tainted with negativity. An executive can best build respect and trust by leading with humility.
Find the Perfect Executive For Your Organization With Hunt Club
Sometimes, a leader just isn’t the right fit, and it may mean it’s time to re-evaluate and start the executive search process to find an individual who will best suit the company’s values and goals.
When it’s time to look for talent, Hunt Club can speed up your search and deliver bullseye executive candidates 6–8x faster than traditional recruitment methods.
Whether you need talent for a startup or large enterprise, Hunt Club can help. We leverage AI-driven sourcing technology and an innovative network recruiting approach to connect you with top executives.
