He had me on the edge of my seat 🪑…..

Mastering Leadership Transitions: Timeless Advice for C-Suite Executives

He had me on the edge of my seat 🪑…..

It was exactly five years ago when I received an invitation to attend an intimate keynote speech from Dr. Robert Hogan, the world‘s foremost authority on psychometrics from Hogan Assessments in London, UK. He was presenting 37 years worth of research on why #Humilty matters much more than #Charisma when it comes to determining #CEO success!

My good friend Claudius A. Hildebrand has recently co-authored a book titled „The Life Cycle of a CEO“ with Bob Stark from Spencer Stuart. They tend to agree that the statement that the CEOs „have what it takes“, is nothing more than a myth.

They rightly claim that „the focus on traits and the skewed media coverage perpetuate the myth of the fully formed leader“ and „even the highest performers, who have achieved successful, long tenures, didn’t start the job as the forces of nature described in the prevailing mythology“.

Their research led to the discovery of The CEO Life Cycle, a series of 5 distinct stages of tenure. Each stage presents a unique set of headwinds & tailwinds that require CEOs to grow in new ways.

At the highest level, the research shows how hard it is for CEOs to consistently outperform the market. Whilst nobody can capture 320 pages 😉 in a short abstract, here comes my attempt at the 5 stages:

1. Launch

CEOs often enjoy a "honeymoon" phase, boosting share prices by 10% on average in their first year. They quickly address neglected issues, leading to several years of improving results. About 88% of new CEOs navigate this phase successfully despite the steep learning curve

2. Calibration

In the second year, boards and markets reassess CEOs, often leading to a downturn in total shareholder returns #TSR. Many CEOs see a 21% average drop in TSR due to the fading honeymoon effect and early moves not yet yielding significant enough results

3. Reinvention

Around year three, CEOs' early initiatives start showing stronger results, building #Trust. Successful CEOs launch major initiatives like M&A and global expansion. By year three, 25% of CEOs have left!, often due to forced departures, with the highest dropout rate in year four. By year six, 50% have departed. Which further reimphasizes what I laid out in #MasteringExecutiveTransitions

4. Complacency

Between years six and ten, many CEOs fall into complacency, leading to stagnation due to status quo bias. To avoid this, CEOs must stay alert to threats and opportunities, continuously pushing for change and growth

5. Legacy

A long tenure can hinder performance due to a lack of critical feedback. Only 3% of CEOs in their legacy years are forced out. The legacy stage, starting in year ten, involves balancing performance with preparing for departure. CEOs staying past year ten often outperform the S&P 500, but few remain beyond 15 years

👉🏼 If the above sounds interesting to you, feel free to buy their book from online retailers or from your local bookstore.

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