The Average FTSE100 Chief Executive’s tenure is 5.9 years. With such a short average there is a temptation for CEOs to charge ahead on culture, eager to make their mark. It is crucial to recruit CEOs that will work with teams to create the best environment for the business, rather than imposing their ideas to serve short term improvements.
A FRC survey showed that appointing the chief executive is one of the most important tasks of the board. At the same time removing a chief executive who doesn’t fit culturally is one of the most difficult tasks, particularly if current company performance is good. The potential problems were also noted by CIPD, ‘if boards get the decision wrong there may be severe repercussions felt across the whole culture of the business.’
If a CEO focuses on personal gain rather than what’s best for the business it may improve performance in the short-term, but that my not be sustainable. This is one reason that cultural fit is so important. Organisations often have a cultural legacy from the previous CEO. The arriving CEO will have to navigate allegiances to previous leaders; these allegiances can negatively impact on belonging by undermining the new CEO.
To control the effects of short CEO tenures within business it is essential to have longevity and continuity when it comes to culture. With careful recruitment and a focus on succession planning, culture can be nurtured and flourish under new leadership, but that does’t always mean a drastic culture change. Having a balance and a diversity of thinking enables new CEOs to implement a culture that will lead to long-term success.
To get the most effective blend of mid-term strategic direction and long-term reputation, consider the Belonging Parameters©: Symbols and Habits along with Leadership.