Legacy might be an important reason why you chose to be a leader.
An interesting article in Harvard Business Review by RHR International CEO, Thomas Saporito, challenges the notion of our ability to create a legacy given the changes in the way we now do business.
Mr. Saporito claims we no longer have the time to build long-term success because of the competitive marketplace and the higher rate of turnover in the CEO position.
Today, CEOs are more dispensable whereas in the previous century, they were given the ability to lead through economic ups and downs.
Speed is everything now, and shareholders are less forgiving. In fact, according to a study conducted by The Conference Board, the average CEO tenure has declined from 10 years in 2000 to under 8.5 years in 2011. This may be the choice of the CEO or of the boards; regardless, the shortened tenure makes it more difficult to create a legacy.
This shift affects the marketplace in three ways:
Renovators Replace Builders
Now, CEOs are known for their ability to build, or fix; not both. Before, CEOs saw the corporation through its various life cycles. Today, CEOs are replaced once the builder has done his or her job, with someone who can grow it further, to someone who can turn the company around when it stops growing.
Companies Are Hiring External Talent
According to the same study, 19.2 percent of S&P Fortune 500 CEOs were outside hires rather than promoted from within. Pressure to provide a return to shareholders forces companies to make quick decisions in order to generate a faster turnaround when projections aren’t being met. This turnover from outside isn’t always a cultural fit and stands to hurt more than it helps, furthering the turnover rate.
Relationships Are Changing at the Senior Management Level
Because of shortened tenure and increased pressure to deliver results quickly, relationships at the executive level don’t have the opportunity to bond; and tend to be more transactional.
Leaders are faced with a new set of challenges and pressures. We can all be certain of constant change. But I’d like to hear from you.
Do you see these challenges within your organisation?
