Business Performance Consulting, Leadership

CEO Succession: to be graceful or a goose?

Over the holidays I was catching up with a former CEO. He said one of the biggest challenges for him was knowing when was the best time to leave the top spot.

The average tenure for all CEOs is around 8.6 years, half that time for the Fortune 500 CEOs.

A 2013 study by Xueming Luo, Vamsi K. Kanuri and Michelle Andrews at the University of Texas, Arlington suggests that long tenure can actually hurt a company’s performance. Their work suggests new CEOs are more open, inclusive, and search for new solutions.

Michael Jarrett at INSEAD suggests the best way for CEOs to avoid a fumble is to jump to the next horse while the CEO is ahead. Isn’t this a bit short sighted?

All CEOs should be held to performance standards. These standards tyipcally focus on financial and growth rates. Do other standards exist to address this issue?

The greater the need for succession, the higher the likelihood the organization in question under that leader is hyper-hierarchical and non-inclusive of the ideas and efforts that make up the organization as a whole.

If a leader has done a top job of opening the culture to transparency, accountability and respect, things shouldn’t skip a beat when the CEO steps out.

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