This topic surfaced earlier this year in a client meeting where we were discussing the replacement of a CEO that had been in the organization for more than twenty years and in the CEO role for more than eight. Such concerns are shared by many organizations that are facing a change of tenured executive leadership.
This topic surfaced earlier this year in a client meeting where we were discussing the replacement of a CEO that had been in the organization for more than twenty years and in the CEO role for more than eight. Such concerns are shared by many organizations that are facing a change of tenured executive leadership and we thought we would share some insights into this critical topic in our blog.
It is widely noted that entrepreneurial founders are often unable to scale to meet the needs of an expanding organization. Venture capitalist John Hamm documented this in an article in Harvard Business Review titled “Why Entrepreneurs Don’t Scale”. John cites four tendencies found in such leaders that make them susceptible to failure when appointed into leadership roles in an expanding or larger organization.
The first tendency is their loyalty to those who helped the founder build his/her organization. This blind loyalty works in founding mode but is a liability in a larger company.
The second tendency is task orientation. Excessive attention to detail over issues near and dear to the entrepreneurial leader can cause a growing organization to stall.
The third tendency is single mindedness. Leadership roles requiring vision, innovation and creativity will find conflict with CEOs overly committed to their own ideas. Such CEOs lack the emotional intelligence to realize some change is needed until it’s too late.
The fourth tendency involves the person working in isolation rather than engaging, inspiring and motivating others. Isolation prevents the newly appointed leader from being able to properly assess and weed out nonperformers.
Newly appointed CEOs must forge meaningful connections and credibility with the existing executive leaders and employees. It is reasonable to assume that tenured leaders will have much of their philosophical and leadership DNA embedded in the organization and its culture. A newly appointed CEO will need to have the tools to be viewed as the “new CEO” versus being seen as “an imposter”.
It is critical that newly appointed CEOs quickly get to know and understand what motivates each board member. An inability to build a connection with each board member creates fertile ground for failure.
Areas of potential conflict include:
When proper candidate screening and assessment tools are applied, such reasons for failure are mitigated.
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Recently, IRC Global Executive Search Partners convened a summit in Gurgaon bringing together senior executives from leading organizations of the Asia Pacific region to explore what organizations and leaders can do to prepare their companies for the future. Many of the themes that emerged are timeless; others are specific to the modern age and the opportunities and challenges of the digital era.
Porthip Nat Viphatanaporn joined Grundfos in 1993, soon after the company launched operations in Thailand. After working in a supportive capacity alongside five country managing directors in not so many years, she took a shot at the top post herself and proved her worth in a traditionally male-dominated industry, delivering growth and stability for the next 25 years.