Why do so many companies want to fire their CEO?

Want to fire the C-Suite?

According to a recent report from advisory firm CEB (formerly known as the Corporate Executive Board), nearly a third of companies would replace their leadership teams if they could. That’s a pretty startling lack of confidence in both the people that lead companies and the processes by which they reach the top of the tree.

So what’s going wrong?

One issue, according to CEB’s Conrad Schmidt, is that the number of stakeholders that any top team needs to understand and work with has grown enormously over the last few years. Regulators, investors, employees, analysts, media and pressure groups all demand a hearing and have more tools at their disposal to attract attention to their needs. Combine that with a slow economy, accelerated business cycles, investor pressure and business complexity and it’s easy to see that business leadership has become more difficult than ever before.

“Most CEOs simply don’t know what to do,” is how one senior leader put it to me. Having run a leading telecommunications company, she now mentors C-suite executives. Typically, they’ve come up through the company and honed specific disciplines; they’re great finance thinkers, product innovators or salepeople. Their entire careers have been characterized by the steady accumulation of deep skills in one area.

But once they assume senior executive positions, they need entirely different skills: networking, knowledge-gathering, consensus building, listening. They should be good at this – so why aren’t they?

One reason is because top execs often don’t believe (or remember) that these things matter. Impressed by their own status, they carry in their head an image of leadership as the tough-minded heroic soloist who knows, or is expected to know, everything. And so they take one of two roads. They either start acting like prima donnas in the hope that they will live up to their billing, or they panic and fall into despondency because they know they can’t live up to it. Both choices are poor, but the first explains the shrinking tenure of CEOs while the second is sometimes redeemable.

What these leaders should do instead is expunge forever the image of the CEO who knows everything  and replace it with the image of the leader who knows everyone. Managing a rich network isn’t about collecting business cards, but rather about a deep internal understanding of a rich collection of smart, informed people who want to help and be helped.

Randy Papadellis, CEO of Ocean Spray, once told me he thought he was better described as the Chief Alignment Officer, which could explain why he and his cranberry farmers have done so well. 

  • Margaret Heffernan On Twitter»

    Margaret Heffernan has been CEO of five businesses in the United States and United Kingdom. A speaker and writer, her most recent book Willful Blindness was shortlisted for the Financial Times Best Business Book 2011. Visit her on www.MHeffernan.com.

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