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What do you do when your CEO is beyond stupid and about to implode your company?

It's true. And I don't usually exaggerate. I just pulled the company out of near bankruptcy and this new CEO comes in and is driving us right off the cliff again. Cash is down to just enough to cover one month of expenses with no real uptick on the horizon. And he has had no prior management experience and no appreciation for finances, revenue, management, prioritization, planning, time to execute, anything that might possibly result in a more sensible business model. The board just brought him so it's still the honeymoon phase. At least the numbers are so horrific that even they are starting to wake up. Next week is our board meeting and we are reviewing YTD and budget for next year - which again was created with absolutely no business sense - he wholesale ignored all my advice. I'm a wreck feeling like I have to sugar coat results and present budget as rational when in fact I don't believe a word I'm saying. I don't think I have the leverage to have a showdown yet. I feel like a kidnapped person driving a car that gets pulled over - "officer, everything's fine....(wink, wink)" Anyone else been caught in this position? How did it turn out for you?

Answers

EMERSON GALFO
Title: CFO
Company: C-Suite Services
LinkedIn Profile
(CFO, C-Suite Services) |

I think your first move is to discuss what is on your mind (and seeing) with your CEO. Communication is key and you are supposed to partner with him. You also have the fiduciary duty to raise the "alarm". It may be possible (although unlikely) that the Board and the CEO has plans or already know the risks of the steps that your CEO is taking. His reactions or how he takes it will be your guide post on your next course of action.

A one on one meeting with a Board Member that you trust is the next thing you should do after your talk with the CEO and giving it some time and INACTION. The Board should always be accessible to any C-level executive.

I have NOT had any experience with this type situation (thankfully) but the Boards that I have been under has directly or indirectly stated to me that I can and should approach any one of them if I feel that there is any concern.

Len Green
Title: Performance Improvement Consultant and E..
Company: Haygarth Consulting LLC
LinkedIn Profile
(Performance Improvement Consultant and ERP Strategist, Haygarth Consulting LLC) |

And I would document (even if you keep some notes private), create a paper trail and keep a secure copy of the trail so that you are not thrown under the bus without any defense.

Ernie Humphrey CTP
Title: CEO & COO
Company: Treasury Careers
LinkedIn Profile
(CEO & COO, Treasury Careers) |

First, even though you are anonymous here, no need to use the word "stupid" when referring to anyone. This implies you are letting emotions impact your actions. It may be best to document your success in turning the company around and move on at this point. Some battles leave scars that are not worth the damage. Like it or not "going around your CEO" is tricky at best, and seldom has a positive outcome. If you want to stay, find a way to engage the CEO and tactfully share your concerns, maybe even with other company leaders (not ganging up, but building consensus so your concerns are not viewed as personally driven).

Carla Gordon
Title: Accountant
Company: Govt
(Accountant, Govt) |

I have been in a similar situation, although not quite as bad. I would get out now since it sounds to me like this person is too arrogant to listen to your advice. Since you do not have a large reserve to use if you have to pull the company out of near bankruptcy again, I wouldn't want to be around to try to do another rescue. But that all depends on your stress tolerance.

Anonymous
(Consultant) |

I've spent the last dozen years or so working with fiscally stressed organizations so I've seen a few of these situations. Here are some thoughts:

1. The Board is human and it is not going to admit it made a horrible mistake with its CEO - at least not right away. I've observed that this realization takes about a year. So.. no quick relief at that end.

2. Somebody is going to get blamed. A bad CEO will lash out at his or her subordinates. You and some of your colleagues are in the direct line of fire - no matter what.

3. You do have a responsibility to your company as a professional and perhaps a responsibility to eventually report directly to the board if you are an officer of the corporation.

My advice is to be persistent, keep communicating and do your job. I always assume early on that maybe it's me. I am not communicating well enough or am not communicating in a way that the boss understands. My rule is that I'll take three formal attempts to deliver the facts and data necessary to make the argument. If your message doesn't take after 3 attempts, it's not going to.

Have these conversations confidentially and privately. Try never to make the boss look bad in public even if it seems unavoidable.

If you need to go to the Board, be very careful and pick someone you're sure you can trust to have a candid and confidential conversation. "He didn't tell us" is often a reason to fire you first.

Last, update your resume. These situations seldom resolve themselves in a good way no matter how hard you try and often, no matter how much Board support you have. As one of my employees said to me as I was leaving a particularly bad situation: "sometimes someone has to be sacrificed in order for the organization to move ahead.... this time it was you". Make sure you go on your own terms.

Steven Donnelly
Title: Controller
Company: Giant Impact, LLC
(Controller, Giant Impact, LLC) |

This situation sounds incredibly similar to a situation that I was just in. As it stands right now, I'm no longer with the company. I was "sacrificed." The board wasn't going to fire the new CEO after being on the job for only 1 year but they had to show the investors they were still making significant changes. The financial guy (me) got thrown under the bus. If you have a desire to keep your job, I would suggest as others have said to go to a board member you can trust.....and of course get your resume updated.

Topic Expert
Patrick Dunne
Title: Chief Financial Officer
Company: Milk Source
(Chief Financial Officer, Milk Source) |

I liked Emerson's response. If you can't get the CEO to get on the same page as you, you will have to get the board of directors a view of the company's current state. It's time to stop sugar coating stuff and tell it like it is, but only use facts. Do not and I repeat do not make statements that the company is going to fail, present the data that reflects realistic projections and explain that the company needs to change X or it will run out of cash. Be fact based or you won't get the respect and support from the board or the CEO.

Anonymous User
Title: CFO
Company: Local Government Agency
(CFO, Local Government Agency) |

You can't win.

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