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