Smart People Get Fired

Five Reasons Smart People Get Fired

Synopsis of article from Forbes by Tony Ewing Published 14th June 2020

Tony explores personal experience of people he knows who were recently fired, he reflected that these people are some of his smartest friends and they were working for businesses that had plenty of funding (in fact many also had government bailouts). So why were they targeted? In this article he explores five possible reasons using behavioural science.

“Barring a complete corporate collapse, smart and competent people should never get fired.

  1. Some bosses mass fire out of fear
    when the going gets tough it is very easy to get caught up in a negative bias that anchors them to the worst outcome. In this scenario preparing for the worst actually creates tunnel vision and paralysis.
  2. Some bosses become slave to the CFO’s budget
    and many CFO’s hold the mindset that cutting heads is the most effective way to cut costs. Loss aversion drives leaders to cut hard and early, providing a clear view to achieving the cost out rather than any risk associated with alternative out strategies.
  3. Some bosses are incompetent
    Tony points out that not all people who have been appointed to senior leadership positions are actually capable of the role, you can’t actually assume that every leader has what it takes. Boards and Senior Executives need to examine their own biases in decision making.
  4. Some bosses are narcissistic
    In these situations the behavioural bias is overconfidence, the leader is convinced they are the only ones who can save the business. Often a narcissistic leader can feel threatened by smart and competent subordinates, taking self protecting steps.
  5. Some bosses exploit crises to cover their mistakes
    Tony uses examples where business already in trouble before CoVID, used the pandemic as an excuse to fire staff. The business fundamentals however were struggling and there was no explicit resolution plan on how to recover the business.

“Companies that continue to struggle to recover and ponder mass layoffs, they should be aware that indiscriminate firing could be the ants that kill the dying cow.”

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