August 16, 2013

Was AOL CEO Tim Armstrong’s Public Firing a Harmful Business Practice?

Businesswoman shocked at her newspaperHow the leaders within companies conduct their business will always affect the overall success of a company—whether positively or negatively. If management is unorganized, unprepared and doesn’t clearly define the companies’ goals, mission statement and values and how these areas are to be achieved, this will inevitably trickle down to employees, which means a lack (or absence) of productivity. And incompetent management + an unproductive staff= well, you can do the math.

There are a myriad of “best practices” out there when it comes to business. Do this to promote your brand, don’t do this in order to decrease turnover. And often the area between what is a good practice and what is harmful is gray. Because every business is different, there isn’t typically a set of black-and-white rules on how to effectively run an organization. One leader’s tactics may or may not work well for another leader, but that doesn’t necessarily mean the first leader’s methods and strategies are wrong or “bad for business.”

Take this current case: AOL CEO Tim Armstrong publicly firing an employee during a company meeting. The story goes (according to…

In case you’ve missed the news, it was last Friday [8/9/13] — during a meeting and conference call about AOL’s plans to cut staff at — when Armstrong suddenly ordered [Abel] Lenz to put down a camera and then said, “Abel, you’re fired. Out.”

Apparently, Armstrong didn’t want the call to be recorded or his photo to be taken. He wrote in his email that “Abel had been told previously not to record a confidential meeting, and he repeated that behavior on Friday.” There have also that Armstrong wasn’t pleased with Patch’s recent redesign. Lenz was Patch’s creative director…

After news media blogger Jim Romensko posted the audio, word about what Armstrong had done went viral and spread to the cable news networks and other news outlets.

So, the CEO is talking to a group of employees (plus around 1,000 workers via teleconference) about the serious state of the company (or part of the company). An employee, who supposedly was warned about this behavior beforehand, took a picture of Armstrong. Then, in mid-sentence, Armstrong says, “Abel, put that camera down right now! Abel, you’re fired. Out!” pauses a moment, and then resumes the meeting.

Instead of pulling the worker aside after the meeting to discuss his behavior (and then possibly terminating him), Armstrong openly fires the guy in front of everyone. Was this a harmful business practice?

Some could say yes:

Terminating employees is an act that should be done in private because this can humiliate and embarrass the worker if done openly. Also, a worker’s employment contract is confidential from other employees and the reason(s) behind his/her termination (and/or resignation) shouldn’t be made aware to other workers. (This depends on company policy, of course).

Also, Armstrong’s sporadic outburst and decision is harmful to employee relations. Workers may now feel nervous about their jobs and/or work habits/actions knowing that at any moment they can be terminated…even for what many believe was a trivial act.

In an apologetic email, he wrote:

“I am writing you to acknowledge the mistake I made last Friday during the Patch all-hands meeting when I publicly fired Abel Lenz.”

“We talk a lot about accountability and I am accountable for the way I handled the situation, and at a human level it was unfair to Abel. I’ve communicated to him directly and apologized for the way the matter was handled at the meeting. …

“On Friday I acted too quickly and I learned a tremendous lesson and I wanted you to hear that directly from me.”

Some could say no:

Armstrong’s actions do not harm him, AOL workers or the company in general. Although the way the CEO handled the situation may have been in poor taste, his reasoning was not. According to the CEO, Lenz had been previously told not to record the confidential meeting, to which he supposedly defied those orders.

People could say that Armstrong was enforcing his role as CEO and demonstrating the importance of following company policy, especially when you’ve previously been warned about a behavior. His decision could also show the importance of certain company meetings and the need for employees and management to be on the same page on how to conduct themselves when it comes to certain types of company information and carrying out polices.

Some could say yes, others could say no. Do Armstrong’s actions really reflect harmful business best practices? What do you say?

Read more in Management Styles

Marks’ stories have also been published in a variety of newspaper, magazine and online formats including The Arizona Republic, The Daily Herald, Arizona Foothills Magazine and various classroom magazines of Scholastic Inc. Service is her passion, writing is her platform and uplifting and inspiring the community is her purpose. Marks received a Bachelor of Arts in Journalism and Mass Communication from Arizona State University.
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