CASE: OB85

DATE: 08/20/12

DEALING WITH A TOXIC BOSS

Ned was an upper middle manager in a major construction company. Six months ago, he was
hired away from a competitor and assigned to Atlanta to develop the company’s market in the
fast-growing southeast region. As it turned out, the major challenge was not with the market, but
with the Southeast regional director, Ned’s boss. As Ned described it:
Bill causes more problems than he solves. He doesn’t listen to our input, he
changes our decisions and even gives orders to our direct reports. He regularly
flies down unannounced from D.C. and gets deep into the details, but makes
decisions without really knowing what we have planned and not understanding
the larger implications. It takes days to straighten up the messes he causes, and
then he blames us for the fact that there is a mess. Ironically, he avoids the really
important topics that should be his focus and seems frozen when confronted with
truly difficult decisions that should be his scope.

He is also difficult to deal with, and a horrible manager of people. When we raise
our concerns, or even if we want to come to him to collaboratively problem-solve
a solution, he goes ballistic. Moreover, if you don’t do what he says, he yells and
badgers you until you do. He sees himself as the major dealmaker, when we are
the ones who are closer to the customer and see the opportunities. He thinks that
he knows more than we do, no matter the subject. Just the other week, he
interfered with the final negotiations that Russ, head of construction, was having
with a key client and we nearly lost the deal. Russ was ready to quit and he is one
of our best construction managers in the company.

Professor David Bradford prepared this case as the basis for class discussion rather than to illustrate either effective
or ineffective handling of an administrative situation.

This case also comes divided into A-C cases. See OB85(A) Dealing with a Toxic Boss for the A, B, and C cases.

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Dealing with a Toxic Boss OB85 p. 2

I am not sure what to do. I could leave—it wouldn’t be that hard for me to find
another job, but before doing that, I want to see if I can work this out.

In considering his options, Ned first decided to collect some data. He made informal inquiries
internally and discovered that Bill had a mixed performance record in this company. In fact, the
last two people in Ned’s position had quit because of Bill’s style. Furthermore, that same
behavior had alienated two of the other regional directors, who said that they would never work
with him again. Even though Bill had been good as a solo dealmaker, he had not been as
successful in developing other areas. This was important because developing the Southeast was a
central strategic goal for the company and one to which the CEO was fully committed.

Ned knew that he could develop the greater Atlanta region if Bill would only stop interfering.
This meant that potentially they were aligned around the same goals (even though they differed
on means) so there was the potential of a partnership. Furthermore, Ned was good at building
horizontal (and diagonal) relationships, so perhaps he would be better at reaching out to other
regions than Bill could be. Ned’s informal analysis indicated that Bill needed Ned as much (if
not more) than Ned needed Bill.

Deciding that the next step was to directly raise the issue with Bill, Ned sent Bill the following
memo:

Bill,

I want to follow up on what I said to you last week as I walked you out to your
car. When you come down to Atlanta next week, I will schedule 2 to 3 hours for us
to have time for uninterrupted conversation. As you probably have been able to
tell, I am neither comfortable nor satisfied with how things are going and how we
are working together. I am sure that there are things that frustrate you about me,
and I want to hear that as well. All of this needs to be explored so that we can
avoid counterproductive actions and results, and instead work to build momentum
towards having a successful, efficient, transparent, collaborative operation. I will
come with specific examples because you have said during previous conversation
that generalities are not helpful. While I hope that this email doesn't feel too
solemn, I do hope it clearly conveys its serious nature.

Thanking you, ahead of time.

Ned

Bill did not respond, and actually avoided having the meeting for the next three weeks in spite of
several trips to the Atlanta office, claiming that he had other things he had to do. Ned was
patient, but persistent in scheduling just this meeting. When the meeting did occur, it proved to
be open but difficult. Ned recalled:

In hindsight, I am happy that I was able to be direct, honest and dispassionate.

The discussion was kept professional and focused on the company and the
negative impact of his behavior on company goals. Moreover, I took the feedback
Dealing with a Toxic Boss OB85 p. 3

I asked for and received from Bill without being defensive. In fact, his feedback
was similar to that which I have received before and I let him know that I agreed
with his assessment and wanted to work on it more. (He seemed to be a bit taken-
aback by my reactions.)

As for how Bill responded: he was defensive, denied problems existed, or said
that he was not inclined to change.

Over the course of the two hours, I actually felt more and more comfortable as his
actions provided perfect examples of his traits which are so counterproductive.
The conversation confirmed that I simply do not think he has the ability to
manage as we scale our operation. Furthermore, he has no desire to
collaboratively operate the division and establish a productive culture. I left with
an odd feeling that I'm comfortable with the notion of potentially leaving the
company knowing I really had given it a good try and had conducted a good
assessment based on empirical events and actions.

But before I do, I think it is important to take my concerns to Bill’s boss. I do not
know where that would lead, but I would be negligent in my duties if I didn't raise
the red flag. Moreover, I owe it to my local office employees, who I really respect
and think highly of, to try and ameliorate the situation. (Some of them are more
dependent on their job than I am.)

The meeting with Bill did not produce the turnaround for which Ned had hoped nor any change
in the weeks afterward. Ned, however, was pleased with how Bill had responded, and this gave
him confidence and strength to elevate the issue. He sent the following e-mail to John, the
company president:

John,

I write to ask for time to confidentially speak with you. I need to convey the
concerns I have regarding Bill as they have significant implications on our
company's ability to find success in the Southeast. I have brought my concerns to
Bill’s attention numerous times. In doing so, I have worked to be direct, honest
and dispassionate; however, I have only seen defensiveness, inability to
acknowledge the problems, and continued counterproductive behavior. After 5
plus months of this, I am disappointed to have no option left but to elevate this to
your attention.

I suspect that Bill will not react well to my contacting you. As a result, I would
suggest we have our discussion prior to your outreach to him. I do think it would
be helpful for you to hear the impressions of others within this Division, as I
believe my concerns are shared and the problems are widespread.
Dealing with a Toxic Boss OB85 p. 4

I am willing to take a day off and fly up to New York to visit, as I suspect this may
be best explored in person. I look forward to hearing from you.

Ned

John actually called Ned later that same day and the two of them had a good, direct 25-minute
talk. Ned said, “Luckily, I had my notes and observations with me which let me stick to my
analysis in spite of my nervousness and trepidation that occurs, given the nature of what I was
saying and to whom I was saying it. This helped me keep it about the company, instead of me.”

They agreed that Ned would fly up to New York so the two could meet the following Monday.

In that initial phone conversation, Ned reiterated his recommendation that John reach out to
Russ, the senior construction VP, and potentially others. Ned reported:

John actually did call Russ on Friday and it was good because it provided more
evidence and better triangulation. Moreover, Russ has known John for over 20
years so there is great trust and depth of connection which nicely complemented
my newness. Russ shared the gist of his conversation with me and I found it
helpful for many reasons. It helped me narrow what I planned to say to John on
Monday. Because there is so much wrong with Bill’s behavior, it is difficult to
cover it all at one sitting so it was important that I focus on key aspects.
Accordingly, I limited my comments to the items that Russ had raised, thinking
that this would be more impactful for John hearing the same issues from two
different people.

In preparation for the meeting, I condensed the issues down to a small piece of
paper. This process let me shed the less important stuff, while helping me
"rehearse"―which, if nothing else, gave me confidence. Another realization
which kept my nerves at bay was that, basically, the issue "left my control" the
minute I elevated it to John. By raising the red flag, I couldn’t turn back—my
only route is forward. (Of course, this could be VERY scary if I was more
dependent on this job than I am.)

As for the meeting itself, I was pleased with how it went, but I know I could have
done better. I didn't do as good a job recalling all the "specific examples." Even
though I had my notes, I found myself being quite emotionally charged. The
process of telling the president all that I had to tell him was very cathartic and it
took all of my control to keep myself on message. I was literally flexing my
muscles to keep myself from shaking!

John did a great job of listening, and asked questions that I felt were genuine and
valid even though many of them were tough. Toward the end, he asked whether I
was ‘in’ or ‘out’ in terms of my commitment to the company. I was very happy
with how I responded. I said that I could not give him an answer, because I could
not disentangle my experience at the company from my experience with Bill. My
Dealing with a Toxic Boss OB85 p. 5

reply not only leaves me a way out, but I think it also let him know that I was not
dependent, and that I was coming to him as much for the benefit of my office
mates and the company as I was for myself.

Throughout the hour-long meeting, Ned worked at bringing the conversation back to Bill’s poor
management abilities, his inability to create a good culture, and his lack of self-regulation, which
led him to not respecting others and getting upset about even the small issues. Ned elaborated on
this:

I didn't think we could scale our business in the way we all wanted, and I actually
said that I would not approve the pending business plan because I didn't think we
would be able to either efficiently mitigate risk or process enough new business to
warrant the seven-figure investment he would be making into my new territory.
That honesty and willingness to speak against my own short-term interests seem
to really have struck him.

I also gave Bill credit for being good in certain areas. I said that he excelled at
being a lone wolf, and that he might actually like, and be better suited for, his
previous role (even though that was lower down in the organization).

The meeting closed with John saying, “I'll be in touch.” Ned was not optimistic that John would
be able to make the big changes needed, due to his loyalty to Bill. As Ned saw it:

John is very loyal to his employees, which is why he keeps them on even when
they don’t perform. Also, I believe that he thinks Bill can improve and get better
in areas where he struggles. For example, John said, ‘I don't get it, you can read
about this culture and interpersonal stuff in books, it’s not tough.’ My reply to
him was, ‘Yes, it isn't academically complex, but it is very difficult to do every
day, all the time. Actions speak louder than words, and Bill's natural actions and
reactions are counter to the basics needed for his role.’

Ned wanted to tell Bill that he had met with John, and to share the nature of that conversation.
He was about to call him when he received a general announcement that Bill sent out to the
division that he was going on a fishing trip to Mexico and would be largely out of reach. Ned
thought, “This is so typical of him to make a personal decision that impacts others but with little
warning.” Nevertheless, he did not want to wait until Bill’s return so he emailed him the gist of
the meeting with the CEO. To his surprise, there was no response. Later, he recalled Bill’s non-
reaction:

I wondered how he would respond when he returned. But he didn’t mention this
at all. I heard through the grapevine that John had a talk with him. And I could see
that Bill was trying to be different. But it was window-dressing. Yes, he was more
polite, but there was still the old behavior of intervening in our details and
changing our decisions.
Dealing with a Toxic Boss OB85 p. 6

What was even worse than getting into the details was that Bill would get into logical
contradictions and not resolve them. This came up around a negotiation for a piece of property.
Ned’s group had originally reached an agreement (already written up in a Letter of Intent), but
Bill wanted to change a significant point. Doing so would have had them breaking an important
part of the agreement. In an attempt to address the conflict, Ned reminded Bill of his own
previous emphasis on the importance of behaving ethically. Since Bill wanted to change the
contract and the change did not seem ethical, Ned asked Bill what he wanted to do.

Bill’s response was that he wanted both to act ethically and change the contract. Ned recalled:

He simultaneously lectured me on the importance of keeping one’s word and then

a minute later the importance of writing into the contract this new condition. I
agreed with Bill that both points were valid, but contradictory. ‘You can’t eat
your cake and have it too,’ I told him. But, Bill resisted acknowledging the need
to make a choice and kept talking around each point.

This debate had gone on for over 15 minutes, with Bill arguing that he could have both sides, yet
not explaining how this could be done. Ned was not sure what to do, but rather than fighting him
directly, he chose to sidestep the issue.

I decided to simply tell Bill that ‘I think I must not fully understand the situation’
(even though I understood it more clearly than he did). That defused the tension
because Bill readily agreed that I wasn’t getting it. I then suggested it would be
best if he directly called our main lawyer, who was waiting to hear direction on
drafting this contract. As I predicted, the lawyer said that we couldn’t have it both
ways and strongly suggested we hold to the original agreement.

This proved to be a good short-term solution; however, it was less than an ideal
long-term answer to the basic problem. Bill never admitted that he was wrong and
his resistance created needless time and expense with our lawyer, and delayed
getting to an answer with regards to the contract drafting. Nonetheless, it did let
me avoid having a lose-lose fight with Bill.

Ned was faced with another problem. The company needed to hire another development director
in the Atlanta office, and the search narrowed down to one person from another firm. But Ned
was concerned about what to tell her:

On the one hand, I want to be honest about the situation she would be coming
into. But on the other, I don’t want to scare her away. She is experienced and her
present boss is also difficult, so she is no babe in the woods.

Rather than going into details, I told Jill, ‘Bill is difficult in his own way and you
need to talk to him so that you would feel comfortable. You need to understand
his style and his management approach.’ She wanted to ask me more questions,
but I stressed that it would be more valuable for her to collect her own data. I
walked a fine line, but fortunately, she did decide to accept our offer.
Dealing with a Toxic Boss OB85 p. 7

Over the next weeks, Bill continued the same behavior of diving deep into the details and
interfering. Ned called him on his behavior three times, but each time Bill again got emotional
with no fundamental change. Ned then set up another long meeting with him. He described what
happened next:

I started off the conversation with the notion that, if I'm not a good fit for him, he
and I both mutually were benefited by figuring that out sooner than later. This
was good, as it framed a common goal that we both agreed to and shared. We
came back to this often.

We had an open conversation. I worked to use ‘I’ statements about how his
behavior was affecting me. However, it did evolve into my telling him what I
really did think he wanted/needed, etc. This wasn't my goal, but it emerged from
the conversation. I expressed to him my opinion that he doesn't really want, nor
operate best, in his current role. Also that I thought he wants to be more
connected to the work, like I and my other ‘on-the-ground’ developers do, instead
of the management role he is in which has him removed.

I also recommended that he consider getting a coach to help him improve. I used
the golf analogy that even the top pros have coaches. I also shared that I had been
having discussions with a former professor at Stanford and that these have been
very helpful (trying to show him I'm using a coach).

He did push me to say whether I was ‘in’ or not. He said we have lots going on
and new opportunities coming up (which is true, but that will always be true) and
so he needed to know. I said that I couldn't commit to being on board and that I
really didn't know. Given the difficulties we were having, I was struggling to
recognize reasons that we should be partners even though it was best if we could
be partners. I then asked him, ‘Why don’t you let me go ... why am I a good
partner for you?’ His answer was, a) because I'm smart, and b) because he made a
commitment to me previously and he didn't back out of commitments. I pushed,
but he had no other reasons.

We left the meeting without any resolution or decisions—or even a summary

statement. In my mind, I feel that it only confirmed I should leave. I would expect
he would have left thinking I'd probably leave soon too. However, in the week
since, he has continued to bring up, ‘lots going on in the future’ statements and
notions. I really think he is conflicted.

But I am not sure what to do. Should I talk to John again or just cut my losses?

Ned concluded that it would do no good to confront Bill again. But should he go again to John,
the CEO? He decided not to. “He knows where I stand and if he wanted to act, he would have.”
Instead, Ned decided to resign. He first would talk with Russ, his closest colleague, and
considered the reasons for this:
Dealing with a Toxic Boss OB85 p. 8

I need to do him this honor and pay this respect first and foremost, as my
departure will affect him greatly. He knows all the reasons why I'll be leaving, so
I don't need to explain myself. I will ask him if he has any suggestions, requests,
etc. with regards to how I approach this, how long I stay, how we inform others,
etc.

Second, I will inform Bill when he comes down to Atlanta. I plan to keep it
simple without going into all the reasons. Instead, I'll focus on this not being a
good fit, on the fact that we both want to avoid delaying this as it only gets
tougher for me to leave as time goes on, and that I feel he needs to take a different
approach with regards to how he collaborates, makes decisions, controls, if he
wants to be successful with future development persons. I'll also stress that I will
be willing to stay on several months to help with the transition and even help find
my replacement, since I could suggest a few names that I think might work well.

Finally, I will talk to John, but not go into details. I will thank him for giving me
this opportunity, I'll express how disappointed I am with it not working out, and
how I really tried to give it a good shot. I'll say how I hope I was patient but also
persistent in being a good local partner who raised concerns to him, and that I'd be
happy to answer any specific questions now or in the future, if I can be of service
as they strategize how to go forward.

I'm trying to keep my plan simple with any criticism limited, since my goal is to
facilitate a transition that is good for the company and especially good for my
local office colleagues. I think my act of ‘voting with my feet’ will say all that
needs to be said about my opinion of Bill and the need for change.

Unfortunately, the ending was not as smooth as Ned had hoped.

Ned called Bill on Monday saying that he was going to resign, but that he would not tell the
office so as not to disrupt things. He added that he was willing to stay on for as long as Bill
wanted, to help with a smooth transition. Bill agreed with the plan and said that they would work
out the details when he came on Thursday.

Thursday was busy with meetings and it was only at 4 p.m. that evening that Bill and Ned could
sit down. As Ned recounted the events:

He caught me off guard. Rather than working out the details for a smooth
transition, he said that he wanted me to leave the next week Friday and that he
would tell the office at noon tomorrow. In fact he wanted me out by 11:30 so I
wouldn’t be around at and after the meeting. I tried to explain that this was not a
workable plan, and that it was a bad way to deal with this relative to our projects,
our office, and our company. But it was of no use. He had no interest in
discussing alternatives; his mind was made up. I was both sad and mad at such a
Dealing with a Toxic Boss OB85 p. 9

bad decision, but also I was frustrated at myself for thinking that Bill could have
the ability to handle this situation in a more thoughtful or productive way.

Bill needed to leave for a dinner, which is why I was shocked when 30 minutes
later Jill (my new development director) walked in my office pale-faced, saying
that Bill had gone into her office on his way out and told her that I was leaving. In
spite of the fact that he planned to hold off until noon the next day to inform
people, he couldn’t constrain himself. I briefly explained to Jill the reason for my
decision and said that I would be glad to help her and the office in any way. It was
a tough moment, and I was totally unprepared for it.

Because of Bill’s response, I decided not to directly contact John, but instead, sent
him my letter of resignation (also to the CFO and COO). I only heard back from
the CFO, who wished me good luck.

Ned was able two weeks later to find a new job in Chicago.

The climate in this firm is 180 degrees opposite from what I experienced with
Bill. I feel so much freer; I didn’t realize the pressure I was under. In terms of the
impact of my leaving, another person has left. He was a very promising 30-year-
old Harvard MBA with a great construction background. Immediately after my
resignation, he started looking for a new job which he landed after two months.
This situation has also affected the hiring of new people, as the negative
reputation for working under Bill has become increasingly known in the industry.

However, my leaving has produced some positive change. Russ has become much
more empowered by the CEO and, while he still must deal with the same difficult
behavior from Bill, he can basically act without any fear of retribution or of losing
his job. I heard that the CEO said Bill would be fired before he would let Russ
resign. Also, Jill has taken the opportunity to continue confronting Bill on his
behaviors as they arise. She is also acting in a very independent way since she
knows the company would be completely screwed if she left.

This was a difficult ten months for me, but I learned a lot. It would have been nice
if it had turned out positively without my leaving … but I think the company is
better off for my raising the issues that I did.