Article originally published in the Philadelphia Business Journal on February 14, 2022.
Can a CEO who was relieved of his duties by a company’s board be an effective leader after being reinstated?
CEO Vishal Garg, the founder of online mortgage company Better.com, was reinstated by the company’s board on Jan. 18. He stepped aside from his duties at the board’s request on Dec. 10, nine days after he abruptly fired 900 shocked employees during a three-minute Zoom call. Garg’s toxic leadership style led the board to believe his lack of people skills was harmful to the company.
Before stepping aside as CEO, Garg told the remaining employees that their productivity would be closely monitored. An employee commented that “his tone was extremely harsh and threatening.” Another employee said, “Garg belittled the laid-off workers to the rest of us and told us there would be no second chances from now on. The whole thing was demoralizing.” Effective CEOs don’t inspire their employees in this way.
This is not the first time Garg has demonstrated his lack of people skills. A Nov. 20 Forbes article labeled Garg’s management style as “scorched earth.” The article quotes an email written by Garg and sent to his employees, in which he wrote, “HELLO – WAKE UP BETTER TEAM. You are TOO DAMN SLOW. You are a bunch of DUMB DOLPHINS … DUMB DOLPHINS get caught in nets and eaten by sharks. SO STOP IT. STOP IT. STOP IT RIGHT NOW. YOU ARE EMBARRASSING ME.” No CEO can retain their best people if this is the way they are treated.
In a Jan.19 memo from the Better.com board to employees published by Business Insider, a number of organizational changes and initiatives to improve the company’s culture were announced, including the reinstatement of Garg as CEO. The memo stated:
As you know, Better’s CEO Vishal Garg has been taking a break from his full-time duties to reflect on his leadership … The Board has met with Vishal several times about this process. Following discussions [with him and] direct input from the independent culture review … Vishal will be resuming his full-time duties as CEO. We are confident in Vishal and in the changes he is committed to making to provide the type of leadership, focus and vision that Better needs at this pivotal time.
In a Jan. 30 Fintech Roundup article headlined “Better.com workers leaving in ‘droves’ in the wake of CEO Vishal Garg’s return” and a Feb. 3 article headlined “Better.com loses more top execs in wake of Vishal Garg’s return as CEO,” Mary Ann Azevedo reports on the turmoil at the company. Did the board not expect this? Were they not concerned about the loss of talented and experienced employees upon Garg’s return?
Can a CEO who departs their position due to poor people skills ever return and be a successful leader? How will Garg rebuild employee trust and confidence in his leadership? How will Garg recruit talented and experienced people to replace those who quit after he was reinstated as CEO? I wouldn’t want to work for him.
In May 2021, Better.com announced its intention to go public. How can Garg ever earn the confidence of public investors? Better.com’s IPO would be valued higher with a CEO who has a track record of effective leadership and can attract and retain the best talent within the mortgage industry.
The saga of Garg and Better.com is still playing out. Stay tuned.
Stan Silverman is founder and CEO of Silverman Leadership and author of “Be Different! The Key to Business and Career Success.” He is also a speaker, advisor and widely read nationally syndicated columnist on leadership, entrepreneurship and corporate governance. He can be reached at Stan@SilvermanLeadership.com.
