Leadership: The courage to change what you can

Posted by: Diane Brady on March 28, 2009

Here is a guest blog from leadership consultant Nat Stoddard and author Claire Wyckoff. Both have co-written a book called The Right Leader: Selecting Executives Who Fit.


In the midst of financial turmoil it’s often easy to lose sight of what’s truly important—namely those things within our reach that we can change to make our organizations function better. Between the daily barrage of media gloom and our own personal stakes in today’s economic quagmire, it’s easy for our attention to be drawn to issues over which we have little direct influence as opposed to remaining focused on important matters that we can actually affect.

One such area where changes can—and, frankly, must be made—is in the manner in which we go about selecting our business leaders. The existing selection process is significantly flawed as evidenced by the data:
o As far back as the last recession in 2001–2002, the turnover rate of CEOs (the group for whom data is most readily available) was already around 10%—twice the rate it had averaged during the previous decade
o In 2005 it jumped to the 14–15% range, where it has been for the past four years.
o Today, the tenure (time in the job) for sitting CEOs has dropped from nearly 10 years just a decade ago to less than 5 years at the outset of this recession.
o Even more startling is that 64% of CEOs—nearly two-thirds—will never make their fourth anniversary in the job and a whopping 40% of them will be gone within 18 months of their appointment.

Clearly, there are fundamental problems with the way in which we select leaders that belie such poor performance. If not addressed, today’s approach will only keep the revolving door at the top of U.S. corporations spinning. Based on research conducted by Crenshaw Associates, a New York consulting firm specializing in leadership transitions, what’s missing is a clear-cut understanding of the company’s cultures through which the new leader must bring about desired results along with a purposeful examination of the extent to which the new leader will fit into it. A scientific approach to understanding culture and a closer look at how each candidate’s character aligns with those cultures will yield greater success, less turnover, and greater leadership tenure for our post-recessionary leaders.

It’s time that we change the things we can to improve the ways we select tomorrow’s leaders—leaders whose values align with those of the organization’s cultures, not by chance but by design.

Reader Comments

Forrest Breyfogle

March 29, 2009 8:40 AM

If we step back to the fundamental question of increasing corporate revenue growth and profitability performance, are we giving focus to the best question to ask relative to hiring a CEO to turn things around to meet our financial goals? Toyota, who has been much accolades for their Toyota Production System (TPS) does not hire executives from outside the company.

Peter Senge in the “The Fifth Discipline” talks about the importance of a “learning organization.” A learning organization is a “system” that is not so dependent specific leadership and how this will change over time. Rather than give focus to hiring new leadership to turn things around, an increased “organizational learning” emphasis should give focus to creating a business system framework that integrated scorecards, strategic planning, business improvement activities, and control with healthy policy creation so that the enterprise as a whole benefits; e.g, avoiding silo thinking.

A system to accomplish this is described by the American Management Association (AMA) in a 2008-2009 winter issue article (http://www.smartersolutions.com/blog/forrestbreyfogle/?p=711).

Diane Brady

March 29, 2009 3:46 PM

Forest,
You raise a great point. The whole question of succession planning is one that gets short shrift in many organizations. The best--from GE to P&G--emphasize nurturing talent from within.

Thomas Huynh

March 29, 2009 3:51 PM

I would like to see more often when people talk about business leaders, they don't automatically think of CEOs. If you want to talk about being able to effect real systematic change in a company, talk about the VPs and all the managers who have a direct link to the people on the front line and out in the field. They are who the clients and customers base their views about the company on and ultimately give their check to. Therefore they are the key to whether the CEO leaves or stays, and most importantly, whether a company improves or remains mediocre. Thomas Huynh

Adam Schorr

March 29, 2009 10:38 PM

I'm not sure you can select a leader. I think a leader must select him or herself and then have that selection ratified by some followers.

You can select a manager who has the technical skills to perform a certain set of tasks. But leadership is an entirely different substance. Leadership is almost ineffable. Trying to pin down what a leader is and does almost misses the point of leadership because leadership is not, principally, about skills or behaviors. Leadership is about soul.

A leader cannot be anointed by a board. A leader cannot be chosen in a succession planning process. A leader must rise up through courage, charisma, conviction and the behaviors that emerge from such soulful qualities. A leader gets noticed by inspiring others to follow. Only through followership does leadership exist.

So the act of "selecting" a leader is much easier than we think. Just open your eyes and ears. To whom does the organization look for inspiration? Who has ideas that people want to work on - even after hours? Who coins the phrases that are used as the corporate jargon? Find these people. They are your leaders. If they don't have the technical skills to also be your managers, train them. You will find this much easier than trying to convince your organization to be inspired by a person that simply lacks that ineffable quality of leadership.

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