We’ve written a lot about great hires who turned fledgling organizations around with their talent and will. Our point was to show the impact a single hire can make, as one visionary can transform a company on the verge of bankruptcy into a massive success.
However, there is also the other side of the coin: the impact one bad hire can have on an organization. One person, given enough power, can take a successful organization and both ruin and embarrass it.
The following five people are good examples of that. While there might be worse hires, all five of these people were both ineffective at their job and embarrassed their organizations in a very public way.
So, without further ado, and in no particular order, here are five of the worst hires of the 21st-century:
Robert Nardelli, CEO, Chrysler, Home Depot
The other four people on this list can beat their chests, bragging that they only hurt one organization. Robert Nardelli is in a category of his own, as he hurt two, for his work as CEO of both Home Depot and Chrysler.
The thing about Nardelli is that if you judge success on a person’s salary alone, he’s very successful. However, if you look at things like company performance or the goodwill of his employees, well, then, not so much.
Look at his time as CEO of Home Depot, a post he held from 2000 to 2007. During his tenure, the company’sstocks stayed stagnant while Home Depot lost market share to its chief competitor, Lowe’s.
Additionally, while at Home Depot, he turned much of the company’s in-store workforce from full-time to part-time, which saved money but hurt workers, company morale and customer service. Meanwhile, Nardelli himself received earned $225 million during his time as CEO and an insane $210 million golden parachutewhen he was eventually pushed out.
Later that year, he was hired as CEO of Chrysler, which tanked shortly thereafter. Late in 2008 and early in 2009, Nardelli sought bailouts by the U.S. government to help save the company. He didn’t help his case by famously showing up on a private jet and then rejecting a $750 million government loan because it came with limits on executive pay.
Scott Thompson, CEO of Yahoo
When your tenure as CEO of one of America’s most-known companies only lasts five months, you know something went terribly wrong. So was the case of Yahoo CEO Scott Thompson, a case study on why a strong vetting process is crucial for any organization.
Why such a short stay? Well, Thompson told Yahoo that he had earned a computer science degree from Massachusetts’ Stonehill College. The only problem with the story? Stonehill College didn’t even offer a computer science degree at the time when Thompson went there (he actually earned an accounting degree).
When confronted, rather than admit to the lie, Thompson became livid and tried to form secret alliances with Yahoo board members and employees, according to the New York Times.Leaving the company with little other choice, Yahoo rid itself of Thompson in May of 2012.
Not that his impact wasn’t felt during his five months on the job. During his tenure, Thompson managed to lay off 2,000 Yahoo employees as part of his effort to bring “real change” to the company, according to Business Insider. So at least there’s that.
Richard S. Fuld, Jr., CEO of Lehman Brothers
Granted, Richard Fuld (along with the following person) was hired before the 21st century, as he started as CEO of Lehman Brothers in 1994. But whenever you are the leader of the company that is responsible for the largest bankruptcy in U.S. history, you get a special exception.
Fuld was a man known for his bravado, as his nickname was the “Gorilla of Wall Street” and he once authored an email that read “Bros always wins!!” Perhaps believing his own hype, Fuld ignored the risk and bet big on subprime loans, even having Lehman itself issue their own.
Of course, as we all know now, that wasn’t a good idea and Lehman Brothers became the largest company to go bankrupt in U.S. history in 2008, with it holding over $600 billion in assets at the time. Fuld has sincesuffered greatly since the bankruptcy, as he was forced to sell his Manhattan apartment for a mere $25 million and was left to toil in his mansion in Connecticut, his 40-acre Idaho ranch and his five-bedroom Florida home.
Kenneth Lay, CEO of Enron
Kenneth Lay, like Fuld, was named CEO of Enron in 1985, 15 years before the turn of the century. But his chickens didn’t come home to roost until after 2000, so he has the privilege of being added to our list.
Lay’s life story reads like the American dream, aside from the part where he ripped off thousands of people and was convicted on 10 counts of fraud and related charges. After all, he was born in near-poverty in rural Missouri, but managed to work his way up to becoming one of the best-paid CEOs in America (and a chief supporter of George W. Bush).
That all crashed in 2001, when Enron filed for bankruptcy – the largest bankruptcy ever at the time – largely because of Lay’s rampant corruption. All told, the bankruptcy cost 20,000 Enron employees their jobs and investors billions.
In July of 2006, Lay died, just months before his October sentencing.
Charles Conaway, CEO of Kmart
Last but not least on our list is the curious case of Charles Conaway. Not only did Conaway run Kmart into the ground, he also allegedly misled investors, causing him to pay a $5.5 million settlement following charges from the SEC.
When Conaway took over as CEO of Kmart in 2000, the chain had its issues, but it was still the second-largest discount retailer in America behind only Walmart. However, two years later, Conaway was forced out after the company had to file for bankruptcy.
In a scathing piece by Forbes entitled “How Kmart Blew It”, the magazine criticized Conaway for lacking vision and for allowing multiple problems within Kmart’s operations. On top of that,in 2010, Conaway paid a $5.5 million settlement for misleading investors during his time as Kmart CEO.
All five of the men listed above looked good on paper. For example, Conaway was successful at CVS before coming to Kmart, Fuld was a financial legend and Thompson was a big part of a very prosperous company, PayPal, before coming to Yahoo.
And yet all five men were forced out of their jobs after they embarrassed the organization they worked for. All five are classic examples that hiring isn’t about finding the most talented person; but about finding the right fit for your organization.
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