Are penitential firings of proven business leaders really necessary?
Measured on most yardsticks of business performance Nick Buckles, the CEO of G4S, has proven himself. He has created huge amounts of wealth for shareholders, employees and the country over the past five years in this job. G4S is today a very successful business and Nick has made a significant contribution to that success. However, it has now very publically failed on its commitment to deliver 10,000, or so, security staff for the Olympics and now even his new Chairman can’t find it in himself to publically support him.
It has to be said that making such a public cock-up is somewhat surprising, for a company whose core competence is supposed to be the organisation of security staff, and so far I haven’t heard a good reason why this has happened. If there are no extenuating circumstances I guess it rather calls into question the company’s real ability to do the “day job” and I wonder what similar failures have occurred in its other operations that have just not received the level of scrutiny that the Olympics inevitably attracts?
Things can go wrong in any organisation: in big ones they can go very wrong. We are all human and we can all make mistakes, so wouldn’t it be nice if rather than waiting to pounce on the slightest human failing we saw a little more charity from time to time? Perhaps, but isn’t it great to see an overpaid boss fall on his sword? Well, that’s how we tend to be behave at times like this. Are good CEO’s infallible then, or just lucky? Wouldn’t you like at least one chance if you make a mistake? If you follow that logic this is Nick’s fist “strike” and with suitable public apologies, explanations and putting right whatever went wrong maybe he should be given another chance. If, however, this is just a chink in rather rusty armour and in fact G4S tend to operate this way, taking big risks on delivery of important contracts and apparently being so unaware of the political and PR sensitivity of this contract, then you probably need a new management team, not just a new CEO.
The problem of course is how are we to really know what went wrong here? This is why the high-paid CEO dominates western business culture. If you pay people enough they are happy to accept that they are really a living get-out-of-jail card for when there is no other way of saving face publically. Of course, if Nick does go, do we really expect G4S to suddenly become a different business? Nick has worked in the business for something like 27 years so he, better than most, would know what levers to pull to get stuff done and if even he couldn’t sort the Olympics staffing out, with all his other laudable successes behind him, who could?
Building and growing a business like Nick has done cannot be achieved without taking risks and it just isn’t possible to combine fast growth and always being in control of proceedings: continued success then comes down to calculation and risk assessment and it looks like this contract was a lot more misjudged than many that have gone before it. This appears to be such a huge miscalculation though and my guess is that there is a very interesting internal 4GS story behind this but I doubt it will ever become public.
I don’t think he will in fact survive, for one reason or another he finds himself at the centre of a “perfect storm” of leadership competence and there are just too many egos out there, calling for blood, which need feeding. More prosaically though there are cock-ups and cock-ups and this is a classic; anyone that presides over it should probably hang his head in shame as he marches to the door. To put G4S together as he has done has been a wonderful achievement, but now that it has become part of the country’s essential administrative infrastructure it needs to be a more boring and predictable business, that doesn’t get things so horribly wrong: maybe it now needs a different sort of leader, more risk-averse perhaps.
No, we shouldn’t always sack CEO’s who fail, but we should probably always sack ones that fail big and don’t have a great reason why – they are often the ones who have outlived their real use to the organisation.