David Hankin: What you should be thinking about when a key employee decides to leave

One of management’s primary functions is to create an environment and/or a set of incentives to retain key employees. Despite management’s best efforts, the market will always demand top talent and buy out those “golden handcuffs.”

When an OKE — outgoing key employee — moves on, management can react in any number of ways. It can sulk, kick and scream, indict the OKE, etc. This reaction lacks maturity and strategic savvy and does not address the problem.

In this scenario, management often becomes frightened by the anticipated reaction of the board, the marketplace, capital markets or all three, and overreacts by immediately launching a search for a replacement to ward off these fears.

Alternatively, management can reassess its organization and business with the cadence appropriate to the organization and market demands.


Organizational assessment

A savvy management team will assess what the OKE brought to the table as a benchmark of a replacement’s profile. This exploration resembles a 360-degree assessment, looking to the OKE’s supervisor, peers and subordinates to understand key strengths, responsibilities, effectiveness in driving organizational goals, etc. Additionally, management must understand what key skills and competencies the OKE was actually using day to day.

Organizational inertia is an enabler. It dictates a dearth of honest assessment. When the OKE leaves, management has a choice: business as usual, reevaluation or choices along a continuum of options. Responsible management reevaluates with conviction to ensure future resources are appropriately allocated.


Asking the right questions: Can we develop or acquire new core competencies?

Prior to the OKE’s departure, the organization may have been meeting its goals and been “doing just fine” in the eyes of its shareholders. Typically, however, no single employee possesses the optimal skill set to drive an organization — it is usually a mixed bag.

The OKE’s departure can be a galvanizing moment for management to bust out its crystal ball, look to the future and determine whether there are different skills that the organization can acquire that will help the organization exceed “doing just fine.” Organizations cannot be afraid to pivot and grow into new markets, product lines, etc.


Can we “promote from within” to fill the gap?

On the one hand, this sends a positive message to the organization’s workforce about company culture. On the other hand, promotion from within means that management must act as a backstop to the promoted employee.

The promotion may be daunting for the employee, and/or may cause controversy and peer resentment. Management must be prepared to deal with these consequences. Internal promotion, however, oftentimes turn out to be a stroke of management genius if the right support is in place.


When a key employee announces that he or she is leaving — this is not a trivial event — management’s reaction can make or break an organization. For the mature management team, the departure is an opportunity to reassess and optimize the organization.


David Hankin


Alfred Mann Foundation, a nonprofit medical device company that develops groundbreaking medical devices to address serious unmeet medical conditions.

David was previously the vice president of business affairs at Sony Pictures Entertainment.

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