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:
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.
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.
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?
The phrase "company culture" is often misunderstood. The problem is that people tend to view the desire for a great company culture as a touchy-feely component of business. A non-essential.
That's largely because a great company culture is intangible. It's not a product. It's not as easy to analyze as a profit and loss statement. Company culture isn't even as concrete as the office decor.
That said, building a great company culture is incredibly important. In fact, I would argue building and nurturing a great company culture is key to long-term success.
“If you want to build a company that attracts and retains loyal employees and customers, creating your own unique culture needs to be a top priority,” says Marla Tabaka, contributor to Inc. According to Tabaka, the online retailer Zappos exemplifies the power of a great company culture—and it's not just because they offer free employee lunches and a nap room.
In an Inc. article, Tabaka shares tips from Zappos and from Dr. David Vik’s latest book, “The Culture Secret: How to Empower People and Companies No Matter What you Sell.”
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