The article points to new research that says CEOs too long at the helm stop reacting to market conditions, ultimately hurting their firm’s performance. While firm-employee relationships strengthen under tenured CEOs, firm-customer relationships weaken because CEOs rely more on employees for information, growing less attuned to evolving market conditions.
I spoke with a well-positioned CEO last week about recent churn at the top of several food industry organizations. No doubt reasons for many of these exits are found in the cited article.
But my thinking went further:
- What about CEOs who aren’t necessarily unresponsive—just slow to act on the changing environment? Have they factored in the high cost of playing catch up? Or the strain put upon their organizations, people and financials to recover lost ground when speed and excellence are neck-and-neck in importance?
- How many are seeking to get a handle on the organizational capabilities required for the new era, but making decisions using outdated thinking and criteria? Can CEOs catalog the many factors that must be in place to drive real power growth for their companies? If so, are they accurate about their organization’s starting point for this exercise?
- Then there are those leading successful companies who see no need for pre-emptive action, secure in the belief that merely tweaking the existing model will be sufficient to withstand future industry shifts. Are they alert to areas that are still performing but eroding or leveling off—and are they bold enough to know when to withdraw and re-direct resources towards new growth prospects? Are they managing the rivalry between exploitation and exploration in their business strategies? What steps are they taking now to avoid becoming a change-fatality later?
Failures at the top occur in stages, usually as small misguided judgment calls in between incidents of success. Leaders do well to acknowledge the blind spots and implications that can result in professional and organizational casualties.