Making Your Board a Strategic Asset

Booz and Company have for the last 12 years done a survey of CEO dismissals and departures ( at the world’s biggest 2,500 companies.

The 2011 findings indicate that 14.2% of firms (can you have 0.2 of a firm?) changed bosses during the year, up from 11.6% the previous year. The life expectancy of a CEO from that sample is 6.4 years. The current tenure of a FTSE 100 CEO is just under 6 years with Paul Pinder of Capita, the outsourcing Group, the longest serving at just over 20 years.

It is tough (and lonely) at the top. Companies do need new blood and a new sense of direction from time to time and it is, therefore, unrealistic to expect one person to provide this forever. But some executives find it very difficult, if not impossible, to let go.

Nothing quite prepares you for the job. I remember reading an interview with Sir Stuart Rose about his first few years as CEO of Marks and Spencer. He was determined to follow the 100 day rule, i.e. do nothing, speak to all stakeholders, slowly slowly get to know the business, the culture, the values etc; as indeed the business literature teaches you. All this was invalidated by two words…Philip Green!

Green made a bid to acquire M&S and Rose had to devote all his energy defending the bid.

I remember another client who was promoted to the top job, he was formally Marketing Director and he told me after spending two days handing over to his successor and taking over himself that it all went very quiet. He didn’t know what to do, it took him days to get to grips with what the job really entailed.

I also see executives who, once appointed, think that “they have arrived” and believe that the hard work is now over. The trappings of power can make one blissfully unaware of the reactions of the leadership and the real malaise affecting the organisation. As a recruiter once told me, “Jean, we advertise for CEO’s and human beings turn up!”

Do look up the above survey, it is very insightful.