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  • Writer's picturePavan Khoobchandani

What OpenAI's Firing and Subsequent Re-hiring Of Its CEO Teaches Us About Leadership

Updated: Nov 22, 2023

On Friday, November 17, 2023, OpenAI (the artificial intelligence company behind ChatGPT) CEO Sam Altman and the rest of the world learned that he was fired as CEO. In a blog post, the OpenAI board said that Altman hadn't been "consistently candid" with board members. Not one, but two interim CEOs were announced in the days after, but after a frantic weekend, it was announced on Tuesday, November 21, 2023 that Altman was being reinstated as CEO. Reportedly, Altman will participate in an internal investigation into the alleged conduct that led to the board's decision.

The events of these five days have sparked discussion among industry leaders and HR professionals about what it means to be a leader and how to handle situations where leadership is not meeting expectations. The following are five lessons the OpenAI debacle(!) teaches us:

  1. The Importance of Company Vision: A company's vision provides a clear direction and purpose, allowing leaders to make strategic decisions that align with the organization's goals. In OpenAI's case, Sam Altman had a unique vision for Open AI. How did the board's vision align the the CEO's? Although Altman was a revered leader in the industry, did his vision for the company conflict with that of his board? Did a misalignment result in the board's decision? If so, these five days highlight the importance of shared vision and goals between a company's leaders.

  2. Communication is Key: Effective communication is a critical component of leadership. In OpenAI's case, the decision to fire Altman came as a shock to many industry insiders, include major investors like Microsoft, OpenAI employees, and reportedly Altman himself. And, the successive interim CEOs and ultimate reversal of the decision has been basically tabloid fodder since Day 1. Is all publicity good publicity? It remains to be seen.

  3. Why Transparency Is Good: Transparency is a critical component of good leadership, as it builds trust and credibility with employees and stakeholders. In OpenAI's case, had company's board communicated their concerns to Altman? Based on the delayed internal investigation, it appears they did not. Could all of this have been avoided with better transparency? Very possibly.

  4. Adaptability and Change: As the industry of technology evolves, traditional thinking suggests that companies must be able to adapt to new changes, including leadership. OpenAI's (seemingly) sudden decision to fire Altman shows a willingness to adapt and embrace change. But was such a change desirable? Balancing stability and change is a tricky endeavor.

  5. Leaders Must be Held Accountable: A leader's actions and decisions have a direct impact on the organization as a whole. In OpenAI's situation, the board made a decision to fire their CEO based on certain actions (or inactions). The saying goes that "no one is irreplaceable," a tenet that all leaders should heed.

Leadership is not easy, and sometimes, difficult decisions must be made. OpenAI's firing of its CEO and subsequent re-hiring was a clear example of a situation where leaders had to make tough decisions. Clear communication, shared vision, transparency, adaptability, and accountability are all essential components of effective leadership.


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