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The CEO Who Waited Too Long to Fire: A Case Pattern

By Stan Tscherenkow · Published January 2026 · 7 min read

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Why does a CEO delay firing a known underperformer? The delay is almost never driven by uncertainty about the diagnosis. It is driven by a sequence of individually defensible rationalizations: the review period is still running, a major client renewal is in progress, the replacement has not yet been identified, the timing would look unstable. Each rationale has logic. None of them addresses the core question of whether the ongoing cost of the person's presence is lower than the cost of the transition. The rationalizations fill the space where that question should have been.

Does the cost of delay scale linearly with time? No. It compounds. Each month of delay produces additional attrition, which produces additional client risk, which produces additional CEO involvement, which produces less attention on everything else. The cost in month fourteen is not the same as the cost in month eight. It is significantly larger because the prior months have compounded it. In this case, the total measurable cost of a fourteen-month delay reached $1.2M to $1.5M on a $19M revenue business, against $168K in the person's compensation over the same period.

Is finding the replacement first a sound reason to delay? In most cases it is a delay rationalization. In this case the internal replacement had been visible and ready for eight months. The CEO had not named them as the successor because doing so would have forced the firing decision. The replacement search extended the delay; it did not enable a better transition. The question worth asking is whether the search is producing a real candidate or producing time.

What does the team do while the decision sits? They reach their own verdict on the situation well before the decision-maker does, and they act on it through attrition. By month fourteen, three account managers had left and a fourth had delivered an ultimatum. The remaining team had long since concluded the situation would not change. The decision at month twenty-two was not a revelation to the organization. It was a confirmation of what they had already decided about what to expect from leadership.

A $19M professional services business. A VP of Client Success who had been visibly underperforming for fourteen months. A CEO who kept waiting for the right moment. After the quarter closed, after the new hire settled in, after the difficult client situation resolved. The right moment never arrived. The cost did.

The situation

The VP of Client Success had joined the business twenty-two months before the firing decision. At hire, they had been the strongest candidate in the process. Experienced, polished in client conversations, and credible to the senior team. The role was responsible for a portfolio of thirty-two clients representing $11M of the company's $19M revenue.

The problems surfaced at month eight. Client satisfaction scores began declining on accounts managed by the VP's team. Two clients flagged concerns directly to the CEO, bypassing the VP entirely. A senior account manager who reported to the VP submitted their resignation, citing management style. The CEO spoke to the VP directly. Improvement was promised. A ninety-day review was put in place.

At the end of ninety days, the scores had stabilized but not recovered. The CEO extended the review by another sixty days. At the end of that period, two more account managers had resigned. The CEO began the process again.

This pattern belongs to The Drift. A leadership situation that has stopped producing value, absorbed as if it were still a fixable performance issue rather than a structural one.

The pattern beneath the reviews

Each review period produced enough surface-level change to justify extension.
The VP would improve their communication frequency and show up to meetings they had previously delegated.
The effort was real. The improvement was not.
The underlying capability gap, the VP's inability to lead a team and manage complex client relationships simultaneously, did not change.
The CEO saw the effort and extended the timeline. The team saw the gap and kept leaving.

The delay. Fourteen months of it

The CEO articulated the delay in terms that were individually reasonable:

The sequence of rationalizations

Month 8 to 11. "We just put them through a ninety-day review. It would be unfair to end it before we see whether the improvement holds."
Month 11 to 14. "We are in the middle of contract renewals with four major clients. Changing the VP now would signal instability at exactly the wrong moment."
Month 14 to 17. "We need to find the replacement before we let this person go. I am not willing to leave the client portfolio uncovered."
Month 17 to 22. "I found the replacement but they cannot start for sixty days. We need to bridge."

Each rationale had logic. None of them addressed the core question. Was the ongoing cost of the VP's presence lower than the cost of the transition? The answer at month eight was clearly no. The CEO never asked that question explicitly. The rationalizations filled the space where the question should have been.

The right moment to fire someone who is not working is not when everything else is settled. It is as soon as the diagnosis is clear.

The decision

At month twenty-two, two more account managers resigned in the same week. Both cited the VP in their exit interviews. A third senior account manager scheduled a meeting with the CEO and stated plainly that they would leave within thirty days unless the VP situation was resolved. The CEO made the decision that afternoon.

The firing was executed cleanly. A prepared separation agreement, a defined transition plan for client communications, and a direct conversation that lasted twenty minutes. The VP did not dispute the decision. Their response was: "I think we both knew this was coming."

What happened after

The third senior account manager did not resign. Within sixty days, two of the four account managers who had left in the preceding fourteen months reached out to the CEO to inquire about returning. One returned. Client satisfaction scores, which had been declining for over a year, reversed in the quarter following the exit. The replacement VP, promoted internally from an account director role, had been visibly ready for the promotion for eight months before it was made.

The cost of the delay, measured

The CEO's own post-decision accounting of what the fourteen-month delay cost:

Three categories of cost

Four account manager departures. Each represented six to eight months of recruitment, onboarding, and ramp cost. Conservative estimate: $340K in total replacement cost at fully loaded rates.
Two client losses. Two clients declined renewal during the period. Both had flagged concerns directly to the CEO during the VP's tenure. Combined annual contract value: $820K.
CEO time. The CEO estimated they spent the equivalent of thirty-plus working days over fourteen months managing the VP situation. Reviews, conversations, client reassurance, team morale. That time was not spent on growth.

The total measurable cost was in the range of $1.2M to $1.5M, excluding the CEO time. The VP's total compensation over the fourteen-month delay period was $168K. The cost of keeping the person was eight to nine times the cost of paying them.

What the pattern reveals

The cost of delay is not linear. It compounds. Each month of delay produced additional attrition, which produced additional client risk, which produced additional CEO involvement, which produced less attention on everything else. The cost in month fourteen was not the same as the cost in month eight. It was significantly larger because the prior months had compounded it.

Performance management is not a neutral act. Each review period and extension communicated to the team that the standard for senior leadership was negotiable. The account managers who left were not leaving because the VP was bad. They were leaving because the CEO had demonstrated that the situation would continue indefinitely. The management signal was as damaging as the VP's performance.

The "find the replacement first" rationale is almost always a delay rationalization. In this case, the internal replacement had been visible for eight months. The CEO had not named them as the successor because doing so would have forced the firing decision. The replacement search extended the delay; it did not enable a better transition.

The team knew before the CEO decided. Three account managers had left, a fourth had delivered an ultimatum, and the remaining team had long since concluded the situation would not change. The CEO's decision at month twenty-two was not a revelation to the organization. It was a confirmation of what they had already decided about what to expect from leadership. The related pattern lives in when hiring a senior executive backfires.

If a known underperformance situation is live, the cost of the next month of delay is measurable.

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Stan Tscherenkow Private Business Advisor Two decades operating across Europe, Russia, Asia, and the United States.

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