Managing Performance - Getting Fired

So this is an interesting week to talk about performance, especially performance in context of people. More specifically, when performance goes bad, who takes the blame. The last few business days have provided some very high profile examples of senior executives who have lost their heads...

The sub-prime mortgage mess has ended the tenure of Stan O 'Neal at Merrill Lynch, followed shortly by Chuck Prince at Citigroup. Turns out money was not free, as well as ability to manage risk as part of business strategy is critical. Among the things of some interest in this story from a performance point of view:

• We now have the answer to, "what does it take to get fired?" According to a recent account in Fortune, in O'Neal's case it is $8.5 billion write-down on sub-prime mortgages. O'Neal is categorized as "having no ability to manage risk". Sounds like a fine bit of understatement. A very hard fall for a well known executive who has graced all the major magazines as a strong leader and strong performer over a long career at ML.
  
• In Prince's case at Citi, the amount currently stands at $3B, a number widely believed to be conservative. The actual story will take some more time to figure out.
  
• The O'Neal story has additional legs for 3 reasons - he is black, so his departure, along with the departure of Richard Parsons at Time Warner, is seen in some quarters as cause for concern. He is expected to leave with a package in the neighborhood of $150M - go big and go home. Finally, he and the board appear to have sent him packing without a succession plan in place. This last is potentially more unbelievable than his exit package. Isn't the corporate governance 101 handbook with chapter on "executive gets hit by bus" part of standard b-school fare?
  

While I am not equipped to provide a commentary on the state of the mortgage business or the state of CEO pay and packages, these are very clear example of poor performance and being held to accountability. It also points to the importance of people in all things performance. No amount of technology can help people execute on a flawed strategy. More importantly, technology still requires people to build strategy, execute the strategy and be held accountable for the performance of the organization.