“Corner Office Turnover: Why CEOs Succeed or Fail” Entrepreneur Magazine
The mantle of chief executive has always been an isolating one. Recent Bloomberg data show corporations changing out CEOs at the fastest pace since 2008. As Boomers retire and Gen X moves into the corner office, generational turnover is rising, but so are less-than-voluntary departures. What’s driving this uptick and, most importantly, what can a CEO do to increase tenure by accelerating his or her effectiveness?
Contributing factors to accelerated CEO turnover:
Overexposure. The corner office is more transparent than ever before. Think of some of the recent headlines: the resignation of Mozilla’s CEO Brendan Eich, the apology from Snapchat CEO Evan Spiegel and the fiasco Donald Sterling created for the LA Clippers and the NBA at large. The items that disrupted these careers and organizations would never have surfaced just 10 years ago. Today, a CEO must assume the same lack of privacy faced by celebrities and pro athletes.
Velocity. The corner office is increasingly a nexus for disruption, and that disruption has gained pace. The speed of change, coupled with an ever-growing bombardment of incoming information, makes it harder than ever for CEOs to identify and stay locked-in on the “critical few” versus the “urgent many”.
Isolation. The corner office doesn’t come with a manual, and being a good CEO is not entirely instinctive. Those closest to a leader may sympathize with the stresses one faces, but very few bring understanding, objectivity and perspective to that conversation. As the leader of a $400MM software company recently told me, “I work 12 hours a weekday and four hours on Sundays. I need to take time to think, but I don’t know how to get out of my own echo-chamber.”
So, what can a CEO do to minimize the risk and maximize the success of his tenure? In our experience at Merryck & Co, both as former leaders ourselves and based on our work with current CEOs, three “musts” top the list.
Stop doing your last job. This is struggle for many CEOs. Former CEO of Tetra Pak Nick Shreiber told me, “I was already running a $2B P&L in the Americas and was tapped to become global CEO [of the $12B company]. I figured it would be the same job on steroids. I could not have been more wrong.” To be successful, a leader must recognize that the organization needs more from him than subject-matter expertise. It needs strategic vision, alignment and direction. The faster a CEO makes that transition, the faster one can create a positive impact.
Get out of your own head. Don’t turn the corner office into a fortress of solitude. One executive team referred to their CEO meetings as, “watching Michael think”. And Michael was brilliant — the smartest guy in the company. Until disruption occurred and he wasn’t anymore. Unable to seek or take on advice, he lost his job. The best leaders — those who demonstrate an ability to rally an organization, transform the market or deliver breakthroughs under duress — don’t just challenge themselves to be better, they operationalize that curiosity. They seek out perspectives that differ from their own and provoke their own thinking.
Fully leverage your board. CEOs who are clear about what they want from their boards and know how to engage them in the right conversations have a much higher likelihood of on-the-job success. Otherwise, board relations can be a headache, or worse. One first-time CEO came into his role when a PE firm acquired his business unit as a stand-alone company. The board made assumptions about why they’d hired him; the CEO assumed it was for his operational knowledge. Rather than initiating a clarifying discussion, he used a 72-slide ops review in his first board meeting to demonstrate his depth. His decision set an unbreakable precedent for them to focus deeply into the weeds of his operations rather than offering strategic guidance. He was on his heels from that point on, and twenty months later, he was gone.
Every CEO’s role is different. Every board is unique. Every company and market features its own dynamic and culture. Those are facts on the ground, not excuses for shortened tenure. The role of CEO is one of stewardship in the most literal sense. To thrive in the corner office requires leaving past roles behind, leveraging the strengths of those best positioned to help and making a deliberate effort to stay curious, engaged and objective about how to improve as a leader.