When is it Time to Quit?

Last Updated Jun 16, 2011 5:13 PM EDT

Representative Anthony Weiner resigned today, after clinging to his congressional seat for several days. The pundits will hash over whether the sexting scandal warranted resignation, but the larger question remains: When is it time for a leader to quit?

These days the question is not theoretical at all. Newt Gingrich vows to continue his presidential campaign despite the fact that his entire campaign staff quit. On the corporate side, there have been suggestions that Microsoft CEO Steve Ballmer should move on because some investors believe the company is under performing.

There is a saying in sports that a great player is the last to know when he should stop playing, but I think leaders are more out of step with reality than most. An athlete can feel the deterioration of his skills; a politician or corporate titan can compartmentalize the negative as a temporary thing that they must wait out.

Too bad! When a leader stays around too long, it is not simply he who suffers, it is the organization. When the person at the top is perceived as less than credible than the whole organization seems so, too. The reputation of the organization suffers and employees become demoralized.

Really, though, the question of a leader stepping down is not a decision for the leader alone to make. It is an organizational decision. In politics, voters decide. In corporations, the board of directors pulls the trigger. And in government, the agency head, or her boss, makes the call about someone who must stay or go.

To help make an informed decision, here are three important decisions to make:

What mistake did the leader do? if the leader is in trouble now, the organization must ask itself if the leader can reverse the situation. For example, a poor product launch or a failed sales target are not reasons to quit. On the other hand, a succession of failures with products, processes and people might be good reasons to do so.

Who will benefit when the leader leaves? The most obvious benefactor is the successor. While few incoming leaders want to take over an organization in peril, there are great benefits if the new leader is successful. You get hailed a hero. Also, the organization will benefit from new leadership, especially if the current leader is mired in a mess of his or her own making. The new leader can focus on the organization not his or her own problems.

What will others say if the leader leaves? So often when a bad boss is kicked out, employees shake their heads and say, "What took so long?" When an imperiled leader leaves, the cloud of uncertainty hanging over the organization lifts away. People start to believe in their company and exert renewed commitment to their work. Morale improves.

While the questions are easy to formulate, their answers should provoke serious thinking. And frankly no leader should quit the first time adversity strikes. Challenges are the making of a leader; overcoming them not only builds the leader's reputation, it builds the character of the company.

Chrysler is mining the benefits of its character right now. Two years ago, it was at death's door and needed be bailed out by the U.S. and Canadian governments. Now owned by Fiat, the company has repaid its U.S. debts and is actually making money. Its new product line looks promising.

While Chrysler is led by a capable CEO, Sergio Marchionne, it is succeeding not simply because of him, but because of what he has unleashed â€" the engineering talent and marketing expertise of Chrysler managers and employees. No quitters there.

So when should a leader hang it up? When the organization is better off without him!



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