by Alan Collins
This is the story of a truly horrible HR leader.
This scumbag’s name is Mary McLeod.
You may have heard of her. She’s the former Chief HR Officer at Schwab and Pfizer.
What you’re about to read are excerpts about her days as the head of HR, which were drawn from this article about Pfizer CEO Jeff Kinder that appeared in Fortune a few months back.
Now, I don’t know her personally. But I’ve learned a lot from her exploits.
Here’s her story (along with my take on it).
Mary McLeod began her career in HR at GE Capital and Cisco. While there, she quickly built a reputation as a no-nonsense HR-type who relished working in tough environments.
She then moved on to Schwab, where she was appointed SVP of HR.
As Schwab’s top HR officer, she built a reputation as “toxic.”
And her time in this job ended disastrously.
Why?
Well, according to Fortune, she promoted divisiveness among executives, isolated the CEO from other points of view, went to extraordinary lengths to alienate and remove her rivals on the leadership team and fed gossip around the organization that every HR tries every day to avoid.
If that wasn’t bad enough, she criticized the CEO behind his back and bragged that she had him “under her thumb.”
When the Schwab CEO found out about this, he investigated and then terminated her in 2004. In an e-mail sent to Mary the day of her termination, read aloud to Fortune, the CEO, David Pottruck, wrote about her: “The issues are about the perceptions others have of you around character, integrity and divisiveness…There is a perception that you do not tell the truth.”
Here’s what happened nine days later…
the CEO who fired Mary
…himself was fired!
That’s right.
Officially, he was forced out by the Board over “strategic differences.”
Unofficially, however, his hiring and handling of Mary McLeod, says one executive, “significantly contributed to his termination and affected his credibility dramatically.”
Said Pottruck, the fired CEO, who still sounds stung years later: “Why purposely undermine me and our entire team? Mary McLeod’s behavior and motivations are hard to understand, even to this day.”
(Note: McLeod says Fortune’s account of her time at Schwab is “false” but declines to offer any specifics, noting that she is bound by a confidentiality agreement with the company.)
Yeah, right.
Sadly, it doesn’t end here.
Mary wasn’t finished.
She managed to rebound from her firing and made her way back up the corporate ladder.
This time she, at age 51, became Pfizer’s HR chief in early 2007. And, at that time she joined the company, Pfizer as preparing to go through a big downsizing with wholesale layoffs.
The number of people that were ultimately let go would total close to 10,000. So her job as the head of HR was absolutely, positive crucial.
To support the company efforts, she moved rapidly to cut her own bloated team in Human Resources.
(Ok, not a bad move. No reason why HR should be exempt from these massive reductions too).
However, according to accounts in Fortune, once her deed was done in HR, she seemed uninterested in the details of how the streamlined Human Resources organization would actually function. Even her top deputies in HR say she was virtually unapproachable, preferring instead to communicate by e-mail, voicemail and quarterly videocast.
How did she spend her time?
You guessed it.
Her primary focus was the care and feeding of the CEO, Jeff Kindler. She became Kindler’s protector and surrogate, whispering in his ear, controlling access to him, delivering his blunt messages.
In part because of this, Kindler admiringly gave her the name “Neutron Mary,” after his hero, Jack Welch. Neutron Mary seemed to encourage his harshest nature, telling him, according to a person who was present, that one senior executive was “a B player,” another “too ambitious,” someone else a “crybaby.”
Neutron Mary also publicly denigrated her employees, announcing arrogantly at one town hall meeting in 2008 that two big positions would have to be filled from outside because no one inside Pfizer was capable of doing the job.
In another episode, one of Mary’s HR lieutenants unsuccessfully attempted to make an outside consultant turn over 360° reviews of Pfizer’s top brass — which she initially said were confidential, only intended for personal development…not to assess performance. This unexpected flip-flop created paranoia in the senior ranks. (Note: McLeod would not discuss any events at Pfizer, citing a confidentiality agreement with the drug company.)
Even as Mary alienated staffers with her untrustworthy behavior, she was attracting notice for her perks. Mary had negotiated a special deal, personally approved by the CEO and later ratified by the Pfizer board. First, she received a $125,000 cost-of-living adjustment to compensate for moving to the New York area from her home in Delaware (while getting another $238,000 to cover a loss on the sale of a second home she owned on Long Island).
(Now, again there’s nothing on the surface wrong with this.)
Except one thing.
Mary didn’t move.
At least, not anytime soon.
Instead, she began traveling back and forth regularly on a company helicopter from Delaware to Manhattan. Under Pfizer policy, top executives such as her were entitled to business travel on company aircraft and 20 hours of free personal use each year of both jets and helicopters.
But Neutron Mary’s employment agreement, signed by the CEO, was even more generous. It allowed her to commute on a “weekend” basis between Delaware and Manhattan for a three-month period starting in April 2007.
When McLeod failed to move to New York during that period, her CEO extended the deal through the end of 2007. Ultimately, even after buying a house in New Jersey, she…
Continued using company helicopters for business travel into and
out of Delaware until she left the company!
(Rhetorical question: What kind of impression do you think was conveyed by the top HR leader choppering to work while 10,000 people are losing their jobs? Can you spell: “Let’s Occupy Pfizer!”)
Anyway, if that wasn’t bad enough, someone soon realized that this arrangement posed another problem: Neutron Mary’s perks were so lavish they might make her one of the company’s five most compensated employees, which would require Pfizer to disclose the details in its annual proxy statement.
So, the company investigated the issue and found they had tallied nearly $1 million in payments to her, including those relating to her various houses, the helicopter use, and a large bonus to buy her out of a consulting partnership. Then there was Neutron’s Mary’s salary and regular bonus of $900,000 and restricted stock and options.
The prospect of revealing those details was disturbing for the Pfizer board, which had been raked across the coals for other lavish executive compensation packages. The compensation committee reviewed McLeod’s package in detail before ratifying CEO’s approval of exceptions to Pfizer’s compensation policies. Ultimately, they concluded that it did not need to disclose McLeod’s pay.
However, rumors of McLeod’s perks spread around the company.
(Now, did these idiots really think this stuff could be kept quiet?)
Word also leaked to Pharmalot, an industry blog, and a cartoon circulated on the web showing a sinking Pfizer ocean liner and a helicopter hovering overhead. Asks the pilot: “Ms. McLeod, are you ready to head home?”
All this fed the rumor mill within the company and disarray within the executive leadership team.
Mary had become toxic and feared inside Pfizer.
However, Kindler, the CEO, seemed blind to her shortcomings, opening up a divide within his executive leadership team. Said one executive: “There was Mary and the CEO, and then there was the rest of us.”
But then, on Nov. 9, something happened that amplified the growing sense of disarray at Pfizer, setting in motion the events that would lead to Kindler’s departure: Mary McLeod sent out an e-mail. She had recently received the abysmal results of a survey of her direct subordinates. More than a third of them rated her performance as a 1 or 2 out of 5 in key areas.
(These ratings seem a bit high to me…anyway…)
She reacted by writing a strange, meandering e-mail to her top staff. “I just wanted to say how sad and embarrassed I am by these results,” McLeod began. “I’m sad for all of you that you work in an environment that clearly is making you so unhappy.” One option she proposed: “I can leave the company and/or this particular job … This will allow the Jeff (the CEO) to hire someone that is more in sync with all of you and a better leader for you.” She added: “… if any one of you spent 48 hours in my job, you would understand.”
On Nov. 14, someone forwarded McLeod’s e-mail to both the CEO and the Pfizer board, with a detailed (but unsigned) cover note. While McLeod’s e-mail was itself “troubling,” the anonymous author wrote, the state of the Pfizer HR department should be “cause for serious concern … The real issue is Mary’s leadership. She has very little interest in the HR function itself, offers little guidance and focuses mainly on the CEO and his needs.”
The writer urged a thorough investigation, conducted by someone independent because McLeod’s deputies feared retaliation.
The letter was discussed at a Board call. Given the retaliation assertion, the Board wanted to name an independent outside investigator. The CEO defended McLeod, praising her for connecting HR to the company’s businesses instead of focusing on “touchy-feely” stuff.
But the CEO went along with the Board’s recommendation.
The two-week investigation was conducted by Gordon & Reindel, consultants who specialize in corporate governance work, and involved interviewing all of McLeod’s direct reports. They found nothing illegal, but concluded that HR was “thoroughly dysfunctional, and driven by inept management.” In their view, this was a simple case of incompetence.
On Wednesday, Dec. 1, Pfizer’s executive team gathered for a day of meetings with the CEO. Mary McLeod was missing. After hearing the consultants’ report, the CEO had finally parted ways with his controversial HR chief — though not without a generous severance package.
But that’s not all.
Now it was the CEO’s job in jeopardy.
The problems with Pfizer’s HR chief had sharpened the Board’s concern about its CEO.
- Why had Kindler defended Mary?
- How could he be so blind to all the trouble that she was causing?
- How could he have failed to acknowledge her manipulative and organization-destructing influence on the company?
By the time she was fired, the Board couldn’t help but think that it was too late. The damage had been done.
So, just as had happened at Schwab, Mary McLeod’s issues had morphed into a crisis for her boss.
The next morning, Sunday, Dec. 5, 2010, the CEO, Jeff Kindler and Pfizer quickly agreed on a generous exit package. “They just felt he was no longer capable of leading the company.”
End of story.
For now.
Here’s my take on all this:
This is the kind of HR leader gives our profession a bad name. Like in any walk of life, HR has its share of bad apples. However, as HR, that’s no excuse. I believe our ethical standards MUST be higher than ANY other corporate function.
Though HR is often under-estimated, we have a significant amount of power and influence…
- A bad HR leader can create the type of havoc with in an organization that no other function can.
- HR can divide (rather than unite) the people in an organization in ways that no other function can.
- HR is capable of setting a toxic tone that alienates people within the business and the performance of the business in ways that no other function can.
And, as the conscience and soul of the organization, we can’t permit this happen.
That’s what I’ve learned from Neutron Mary.
What are your thoughts? Please share them HERE.
About the author: Alan Collins is Founder of Success in HR. He was Vice President – Human Resources at PepsiCo where he led HR initiatives for their Quaker Oats, Gatorade and Tropicana businesses. He is author of the HR best seller, UNWRITTEN HR RULES . His new book, BEST KEPT HR SECRETS is now available on Amazon.
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