Gillingham chairman Paul Scally says Andy Hessenthaler paid the price for failing to get the club promoted from League Two.
Hessenthaler stepped down as Gills boss this week after missing out on the play-offs in the last two seasons.
Scally told BBC South East Today: "With the quality squad we had, two seasons was enough to see if we could get out of the division.
"If you don't achieve success you don't often keep your job."
He added: "Much as it was a difficult decision for me, in my heart I believe it is the right decision.
"He cares about the club and he knows the only way we are judged is by success, not by what we do off the field.
"We didn't get the success we believed we should have got in one of those two seasons."
Scally has revealed that he has already received plenty of applications for the vacant hotseat at Priestfield.
"I've been inundated with agents and so far we're up to about 40," he continued. "I haven't even started looking at them and I've got a completely open mind.
"We'll decide on a shortlist of who we would want to see.
"It'll take a couple of weeks, I guess. We hope to have someone in by the end of the month."
Hessenthaler, meanwhile, has been offered a place on the Kent club's board as a full company director - a position which would see him overseeing football development.
"Because he failed in getting us into League One doesn't mean he's a bad person," Scally explained.
"He's a man of integrity who loves this club very deeply.
"When you've got someone who's that good, it's a bit of a waste if you ask them to leave and not come back.
"He can do a great job for this club in that role. He's just the man, if he accepts the role, to develop our overall football strategy.
"He's gone away to think about it."