CEO turnover is up as organizations look for different kinds of leadership due to the pandemic. To avoid that fate, CEOs can manage expectations and make sure their organization sees the whole picture.
This is a tricky time for CEOs. COVID-19 was a quintessential black swan event that forced leaders to act quickly to keep their organizations running. And if they survived, it’s to their credit. But the experience may have revealed larger changes the organization needs to make—and prompted whispers that current CEO may not be the best person to handle them.
There’s some evidence of this in recent numbers about CEO turnover, which has been ticking upward in 2021. According to research from the outplacement firm Challenger, Gray, and Christmas, CEO departures in March jumped 19 percent over departures in March 2020. The firm’s senior vice president, Andrew Challenger, says the increase is evidence of shifting priorities a year into the pandemic.
“Companies are now making leadership changes as they determine how they will do business going forward,” he said in a release on the report. “It’s becoming increasingly clear that many companies will not go back to the way things were pre-COVID.”
Association leaders have shown plenty of resilience during the past year, but the ground has shifted underneath them. So, at a precarious moment, it might be worth looking at why leaders fail—or are seen as having failed.
In an article published last week in the MIT Sloan Management Review, three business scholars spotlighted a few answers to that question. As they point out, the research on CEO failure is surprisingly thin and tends to focus on personality—the CEO was dismissive, or narcissistic, or some other toxic trait. But it’s rarely personality alone that sinks an exec, they write.
Organizations need to provide training for leaders just as they do for entry-level employees.
Moreover, organizations can tend to put outsize, even unrealistic expectations on CEOs. A leader might be a sensible, experienced, forward-thinking steward, yet still draw skepticism because they’re not delivering skyrocketing growth—especially if they’re relatively new to the job. Leaders’ “ability to perform at ever higher levels naturally slows as they spend time learning and adjusting to their new roles,” the authors write. “Yet organizations often still perceive this ‘reduced increase in performance’ negatively, even if their recently promoted leaders are performing well at their new responsibilities.” (They note that this dynamic is especially common with women leaders.)
None of which, of course, should excuse a poor leader for leading poorly. But it does mean that organizations need to shift the lens through which they evaluate CEOs. The article’s authors propose a number of ways to do that, and they generally demand that evaluators get more savvy about the context in which a CEO is working.
If there are certain weak spots or potential headwinds a CEO is facing, for instance, the organization should train up the exec. They need to be “just as intentional and explicit about identifying or formalizing training and development opportunities for leaders as they are for entry- or middle-level employees.”
But perhaps more effectively—and likely more affordably—organizations need to apply one of the lessons we learned from the pandemic. Remote work has revealed that many employees have complicated home lives, and they have developed methods to have colleagues step in as needed. Culturally, though, we don’t tend to afford the CEO the same flexibility. Ignoring that can set up an executive for failure.
“Building a bench of other leaders who can step into roles temporarily and amenably, peer-level meetings that can help support mental health, and enforced vacation time—can help recharge a leader’s energy while exercising flexible role-shift structures and routines in the leader’s absence.”
When leaders fail, there’s a habit of saying that the person was “a bad fit” or couldn’t adjust to a crisis. And of course a CEO bears responsibility for how well the organization is run. But organizations also owe CEOs the opportunity to do their best work. And that means creating an environment where that can happen.