Lessons Learned from Executive Churn

Talented managers may make it to the top, but many these days don’t stay for long. Turnover at the executive and CEO levels has hit all-time highs. In response, says the Center for Creative Leadership’s Michael Campbell, boards of directors should re-examine their CEO selection processes. Meanwhile, leaders at all levels can learn from the mistakes made by short-time CEOs.

Just how bad is the turnover? Eight out of 10 major companies worldwide changed their top leader at least once during the 1990s – two-thirds of them in the 3-year span from 1998 to 2001. Campbell led a year-long research project to gain insights into the shrinking tenure of executives and to discover the skills that are needed for senior-level positions. Campbell surveyed CEOs, operating officers, presidents, vice presidents, directors and board-level professionals to identify the key factors that impact executive churn.

The study revealed six differences between long-term CEOs and those who are replaced after fewer than seven years