Questions abound on firing of Microsoft's CIO
In addition to the question of what corporate policy now-former Microsoft CIO Stuart Scott violated to lead to his termination by the company on Monday, many other unknowns remain.
For instance, why didn’t Microsoft and Scott work out some sort of face-saving departure? Was Microsoft tougher on Scott than it might have been on someone else because he was CIO? And what career paths remain open to the 40-something Scott?
One thing is for certain: Scott’s firing has become unusually public, even though the termination was disclosed in an internal memo and Microsoft didn’t formally announce it to the outside world or specify what internal policy he had violated.
Art Crane, principal at Capstone Services, a human resources consulting firm in Sherman, Conn., said via e-mail that it is “rather unusual” to see an involuntary termination be disclosed so publicly. “More typically, companies would want the situation to just go away without a lot of fanfare,” Crane wrote.
That may not have been possible in this case, though. Scott had worked at Microsoft for only two years and was relatively unknown, especially in comparison with many of the company’s other executives. But because of its size and market clout, Microsoft is always under the spotlight.
And, Crane wrote, “with the heightened focus on ethical considerations of late, it’s important for a company, particularly one as visible as Microsoft, to deal with infractions swiftly and to send messages to employees, stockholders, regulators and the general public that it won’t tolerate violations.”
John Challenger, president of Chicago-based employee outplacement firm Challenger, Gray & Christmas, said he doubts that Microsoft was trying to create a “public hanging” by firing Scott. “When you’re in a war to attract talent and the best and brightest executives, you wouldn’t want to suggest that you could do something that would embarrass them,” Challenger said.
On the other hand, CIOs are not only in charge of ensuring that key IT systems stay up all of the time; they also have access to many of a company’s deepest secrets. Thus, there is an increasing desire to hold them to a higher standard of behavior, according to Challenger. “This job is for Boy Scouts and Girl Scouts,” he said.
Scott’s resume and public image seemed to fit that sort of description. He holds bachelor’s and master’s degrees in engineering, math and computer science as well as an MBA. Before joining Microsoft, he spent 17 years at General Electric Co., where he rose up through the IT ranks to become CIO of the massive GE Industrial Systems division. He also took part in GE’s Leadership Development Program.
In an interview with Computerworld that was published in September, Scott — who has seven children — said that outside of work, “my family is my biggest priority.” He added that he also enjoys “playing golf and volunteering with my church and youth groups.”
Crane disputed Challenger’s assertion that IT executives are held to a higher ethical standard than other workers are. “Financial execs probably get the tougher treatment,” Crane wrote in his e-mail.
He also pointed out that it isn’t clear whether Scott’s dismissal resulted from an ethics issue. “There are many cases where a violation of a policy would not necessarily be a breach of ethics,” Crane noted.
Nonetheless, once Microsoft began the investigation that led to his termination, why didn’t Scott negotiate a way to leave the company under a less embarrassing pretext?
That may have been a consideration, Challenger said. But, he added, many executives facing a charge of violating company policies “hope against hope that it won’t prove worthy of a discharge.”
And although many executive contracts do guarantee severance and confidentiality in case of a loss of job, nothing is ever as smooth as people hope it will be, according to Crane.
“It isn’t uncommon to allow someone to resign in advance of termination,” he wrote. “But if there’s a tight community (which there often is at the executive level), word would likely get around about what happened. And depending on the circumstances that led to the dismissal, the former employer could be exposed to liability if an egregious act was not disclosed and there was a recurrence.”
Faced with all that, what are the career prospects of an executive who has undergone such a public termination? Pretty good, Challenger said — as long there isn’t a pattern of prior policy violations.
Scott “made a mistake and is paying for it dearly,” Challenger said. “But everybody is going to know that this is an extraordinary talent. He could go and work at a start-up company or in private equity or a hedge fund. But I don’t think it’d be impossible for him to go back to being a CIO someday at a high-profile or public company.”