This Week's Leadership Changes at OLG and NHLPA

September 3, 2009

Two high profile firings took place this week. Both shed light on how boards of directors and the big-named international headhunters who advise them make questionable decisions.

The first involved the CEO of Ontario Lottery and Gaming Corporation who was dismissed along with the majority of the firm’s board of directors. Published reports suggested that topping the list of Kelly McDougald’s purported transgressions was her failure to deliver wholesale culture change at the government run monopoly. If this was in fact her primary mandate, it is reasonable to look at her credentials going into the job.

Prior to joining OLG, Kelly McDougald was a Vice-President of Sales for Bell Canada where she was charged with driving revenue growth to enterprise accounts. Before that she spent approximately 15 years employed by Nortel, and for a period one of its subsidiaries, in mostly senior sales and account management roles. Though she is undoubtedly skilled in managing the sales and marketing functions within large complex organizations it is hard to believe that selling the virtues of gambling was the biggest concern for OLG when hiring her. As for her other credentials, she was neither a proven CEO nor someone whose career was built on driving large scale organizational change. In fact Bell could be described as a role model of how to repeatedly fail at culture change. Considering that the OLG had fired its previous CEO, it is curious that the board of directors would select such a high risk candidate for the role. We will likely never learn about why the board thought she was qualified as their decision cost them their jobs as well.

The other high profile firing this week was Paul Kelly at the NHLPA. The reasons behind his dismissal also remain quite sketchy with few of the key stakeholders commenting publicly to date. However, a few things can be surmised from the few official comments that have been made. Former CAW head Buzz Hargrove is interim Ombudsman for the NHLPA and was witness to the whole dismissal process. He commented on a radio interview that though there was no single issue that precipitated Mr. Kelly’s dismissal in the end it can be said that he failed to align the 750 person membership behind him. The following day, Mr. Kelly himself admitted on the radio that “I don’t know that I fully appreciated when I took the job, some of the challenges that would be faced just by the NHLPA’s structure”.

Among the key objectives in any well managed search process is the elimination of nasty surprises, both for the client and the candidates. The search consultants do not want the client calling them in a panic to say that the candidate they just hired is not the person they thought they were hiring. Similarly there is no phone call more dreaded that the newly hired candidate who calls to say ‘I had no idea what I was getting into’. Thus, it can minimally be said that something went wrong in the hiring process as both parties appear to have entered into a situation that proved different than they believed going into it.

As for Mr. Hargrove’s comments, to the degree that Mr. Kelly was charged with setting the direction of the NHLPA, winning the hearts of the constituents to follow that direction and then executing on the plan, it can safely be said that he failed somewhere in the first two stages. Though the leadership of unions shares many characteristics with the leadership of companies they differ in that one is elected while the other is appointed. Thus, union leaders must balance the need to address their mandates with being mindful of the constituents who elected them and will determine whether to reelect them in the future. This can be the more difficult of the two tasks.

The NHLPA leadership role is high profile, public and undoubtedly challenging with myriad stakeholders. Again, one can reasonably look at Mr. Kelly’s credentials for a role that demands such a variety of skills. A well-known prosecutor and trial lawyer in Boston, he was best known in hockey circles for having prosecuted Alan Eagleson. He most recently spent 7 years as managing partner of a very small law firm focused on criminal and civil litigation. He had no experience walking into an organization which had been rocked by two successive leadership changes and an extended labor strike.

When hiring, we all try to estimate the likelihood that the candidate being considered will be successful. And while there is always risk, it is paramount to mitigate that risk by using a process that eliminates surprises and looks for candidates who have undertaken similar challenges in their past. This week’s high profile firings show what happens when organizations forget this.

Robert Hebert is Managing Partner of Toronto-based executive search firm StoneWood Group (www.stonewoodgroup.com). He can be reached @ rhebert@stonewoodgroup.com or at 416.365.9494 x 777