WHY CEOs FAIL
and how to prevent it.
An approach to rapid organisational change
Research and statistics show that over 40% of new CEO or Business Unit Head appointments fail to meet performance expectations in the first 18 months.
Interestingly, most of it is NOT their fault, and it IS preventable. Symptoms you may see are:
- Managers operating below their actual position. It's not uncommon to see this happening at least 40% of the time; so staff aren't allowed to "own their piece", restricting their growth and development; and impacting engagement.
- 70-85% of the leadership team, the functional leaders, don't have a "ready to go" successor in place; so if one leaves the business unit head gets sucked down a level to keep things running.
- The leadership team isn't actually a TEAM. They are a group of functional heads who spend 90% of their time running their function, and 10% reporting up; so the business unit head has to get involved in everything that crosses functions.
We understand why this happens; and how to prevent it.
There are 4 main leadership transitions on the journey to a General Management role (CEO).
Each transition has some risks associated with it. These risks add up to the situation that can cause the CEO to fail; especially one new to the role. The organisation is a connected entity, a bit like a concertina, so if any of these transitions cause the problems outlined below, there is an impact on everyone; above and below. For example, a middle level manager who spends a lot of time as the "expert problem solver" to direct reports does not have the time to do strategic thinking and planning. This pulls their boss down a level to get this done AND suppresses the development, and hence engagement, of their direct reports.
To ensure success:
Everyone needs to be operating at the right level, and doing the right things.
- The business head needs to articulate the Purpose of the business unit; then coach their leadership team to deliver it.
- The leadership team members need to free up time to coach their team AND be an active member of the Leadership Team.
- The leadership team need to define how they will operate together as "The team that runs the business".
- The leadership team need to identify the behavioural changes they will need to make.
When this is done you can start to look at the leadership capability of managers at all levels and roll out skill improvement as required.
The Project would look like this: