Few job titles have as strong an aura of glamour about them as that of “CEO”. The position of Chief Executive Officer is one to which many aspire but few ever reach. Recent research indicates, though, that all may not be well in this upper echelon of power.
Over the past four years, the average tenure of a CEO has shrunk from six to five years. The figure a decade prior was closer to ten years. This change coincides with a larger number of CEOs who have not retired voluntarily but been “transitioned” out of the job. It reflects an increased willingness by boards to mandate forceful changes when performance falls short of expectations. This, in turn, is inspired by the “fail and fail fast” mantra that is proving itself increasingly popular in the business world. Also contributing to the heightened CEO turnover rate is a corresponding increased appetite for mergers, which essentially necessitates the removal or demotion of one CEO in favor of the other.
Bucking the Trend
If you are considering stepping into the role of CEO, a world of unprecedented opportunities – and potential pitfalls – awaits. Before you make the decision, answer these three questions to gauge your preparedness for the role.
- Do you have the ability to plan truly “long-term”?
Most business leaders deal with strategies that will be brought into play within three to five years. A CEO’s time horizon is closer to double that at ten years. As an exercise, consider the changes that have transformed your industry over the past decade – could you have anticipated them in the preceding ten years? In addition, technology is redefining what companies need to do and manage to secure a competitive future. Consider the ramifications and opportunities that this brings to your role.
- Are you comfortable away from the frontlines?
One analogy for the difference between a CEO and subordinate officers is the difference between a battlefield general and one in the Pentagon. The battlefield general leads troops close to the action and is intimately involved with developments on the ground. The general at the Pentagon has a much wider perspective of events and cannot allow them to become distractions from the bigger picture. As a CEO, you will need to consciously detach yourself from direct participation and delegate more. Not only does this free you to focus on your role, but also empowers your subordinates to own their decisions.
- Can you handle the psychological responsibility?
Your role as CEO will place you at the head of a team of presumably thousands of individuals, each with families and responsibilities. It is a steep incline from the roles that most first-time CEOs have held earlier in their careers. There is no magic mantra to prepare for this elevated responsibility. It takes empathy, a willingness to learn from every member of the team, and a lot of hard work.
Are you considering taking on the responsibility that comes with being a CEO? Would you like to discuss the benefits and pitfalls further? Please contact me today.