Well, how much change has there been politically in the past week?
We now have a new Prime Minister and Deputy, with a political party left in disarray.
No matter what your political persuasion, it has been a sad and disappointing sequence of events for a number of reasons.
Whilst events were unfolding it caused me to think again about this concept of leadership and why leaders fail.
A few years ago I came across a very interesting article in the Harvard Business Review entitled, ‘Why CEOs Get Fired’ and I pulled it out again to see how much of the article may provide insight into the recent occurrences and the failure of leadership (potentially) in this instance.
Mark Murphy, the author of this article, cites that it is often assumed that CEO’s get fired/forced to resign or retire due to financial performance. However, if that were true, CEO’s who missed a target or lost money would be immediately dismissed and that isn’t always the case.
So why do CEO’s get fired?
The Leadership IQ Research Team (of which Mark is the Chairman and CEO) interviewed 286 organisations that had just dismissed their CEO, and he interviewed board members to discover the reasons why.
The answer was because the Board had lost confidence. They said they needed confidence that the CEO would take the necessary actions to achieve growth over time.
TOP FIVE REASONS CEOS GET FIRED
Here is the list of the key reasons why Board members lost confidence along with the percentage of respondents who gave that response (it adds to more than 100% as some people gave more than one response)
- Mismanaging change (33%)
Board members said they had gone through a significant change and the initiative was not handled well. Particularly, the CEO’s had failed to motivate staff and managers to sell the need to change, as well as to follow through to ensure changes were sustained.
- Ignoring customers (28%)
When a CEO alienates customers, it undermines the business and revenue as well as board support. Board members need to see significant engagement by the CEO in the business, requiring evidence of their intimate knowledge of customers, their needs and the trends.
- Tolerating low performers (27%)
Allowing a low performer to linger (without any improvement or discipline) destroys a CEO’s credibility and makes it almost impossible to hold others accountable. Board members complained that CEO’s become too emotionally attached to a low performer at times and become fearful of calling out the behaviour in case the low performer shares damaging information.
- Denying reality (23%)
Board members said they could handle bad news but what they couldn’t handle was a CEO who denied bad news, often being too insulated from the realities of the market and customers. They would rather have bad news and a plan to fix it rather than no news or a sugar-coated version.
- Too much talk, not enough action (22%)
Many CEO’s talk the talk but don’t walk the walk – they can tell you all about grand visions and strategies but often neglect a tactical plan of the ‘who, what, when, and where’ along with evidence of its implementation.
THREE VITAL LESSONS
- The issues that get most CEO’s fired are ‘soft’ issues
Most CEO’s spend the majority of their time on ‘hard’ issues like finance, strategy and operations because they have expertise in these areas (and they are less likely to make mistakes) – it is how they got to be a CEO.
‘Soft’ issues like managing change cause them to stumble.
However, these skills can be learned quite quickly – how to lead and manage people through change, how to connect with customers, how to manage low performers.
- Lack of execution is much more damaging to a CEO’s career than a lack of vision
Boards tolerate strategic errors as long as the CEO acknowledges the reality and quickly takes action in a new direction.
- Get out of the executive suite and into the field
Visit your customers regularly to see what is really going on. It is important to listen to their needs in their own words and uncover areas where the business needs to improve their service.
I will leave it with you to determine how many of these reasons apply to the current political events, and how many of these lessons could have been heeded to create a very different result.
An interesting reflection…