The premature passing of CEOs is no longer a rare event. Historically this condition beset only an unlucky few, but we are now witnessing many damaging examples of leadership gone awry. A recent study of CEO succession in the world’s 2500 largest companies, conducted by a top management consulting firm, found that the frequency of CEO succession events increased from 6% per year in 1995 to 11.2% per year in 2000. Perhaps even more telling are findings that in 2001 only 47% of corporate chiefs who departed did so under terms of a so-called regular transition, compared with a whopping 72% in 1995.

How pervasive is dysfunctional leadership? I’ve encountered senior executives who insist on pursuing patterns of dysfunctional behavior — who, even in the face of withering heat brought on by mere lip service to the need for fundamental change; pursue actions that lay wide open the web of narcissism that has engulfed them. Is this seemingly endless line of leadership betrayals we see unfolding before us a legitimate indictment of the majority of leaders currently running (or available to run) our enterprises?

My experience, and that of senior colleagues in the executive search profession, suggests that this is not the case. However, our experience does attest to the fact that while this dysfunction is not the norm; the trend of premature succession is on the rise and is likely to accelerate.

Perhaps there is an indictment lurking in all this having more to do with the processes we have allowed ourselves to rely on when it comes to assessing, naming and transitioning new leaders. There are few more important aspects of corporate governance than preparing for and effecting leadership transitions. Yet examples abound of boards that lack the foresight and preparedness to effect that critical appointment, and of boards that make decisions without the follow-on conviction to support that “right” executive — all too often leading to organizational tissue rejection.

Given increasing demands that CEOs bear responsibility for their company’s problems, escalation of pressure to create value and the increasingly complex environments in which that value must be created, it is fair to assume that we will witness continued — if not increased — turnover at the top levels. Bottom line: Companies must re-evaluate the way they choose their leadership. When they rebuild, they need to pay greater attention to the criteria used to assess and assimilate the new guard.

It is imperative that leadership incorporate more farsighted responses to building and maintaining their top teams, and invoke succession plans that achieve the innovation and accountability necessary to address increasingly challenging markets.

Headhunter Confidential
Click here to read about Headhunter Confidential.

This entry was posted on Tuesday, January 12th, 2010 at 5:08 pm and is filed under Clients, Executive Recruiting. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.