CEO Life Cycle

No leadership position has a greater impact on an organization’s success than the CEO. Very little data exists on how CEOs tend to perform over time; CEOs, often fill the knowledge vacuum with anecdotes, assumptions, and rules of thumb.

When someone asks CEOs about the ideal tenure for the role, many mention seven-year average. They often argue that it takes minimum five years for a CEO to make a difference in their organization, to change things.

But the reality specially in the public companies is much shorter than that. The average tenure for the C-suite executives in public sector, in general, is 4.6 years. In the English NHS the average is 3.8 years. We have no data from Spain niether from the Catalan Health Service. 

CEOs in the NHS system have short tenure. 

 

To better understand the typical course of value creation over a leader’s tenure, Spencer Stuart launched what they call they CEO Life Cycle Project

Article: The CEO life-cycle

The study reveals a surprising pattern of headwinds and tailwinds that CEOs are likely to face during their years in the role and upends some common views about CEO tenure and value creation. For example, it suggests that some boards part ways with a strong CEO too early after a predictable and often temporary performance slump, while others tolerate a mediocre performer for too long.

Rarely do any two CEO tenures look alike. Each leader is on his or her own journey and faces very specific circumstances. Still, by comparing CEO performance on the basis of years in office rather than calendar years, and by viewing a composite of individual journeys, they have identified five distinct stages of value creation that many CEOs will experience during their tenure

• Year 1: The Honeymoon
• Year 2: The Sophomore Slump
• Years 3 to 5: The Recovery
• Years 6 to 10: The Complacency Trap
• Years 11 to 15: The Golden Years

CEOs in the NHS are underpressure by their politicians who have come adept at exerting outsize influence and keeping directors on their toes.The CEO life cycle gives executives, members of the boards and also politicians a common language about potential risks and opportunities at each stage. It can help boards view performance in a larger context and avoid overreacting in moments of doubt "like a political election" —or tolerating mediocrity for too long. It can also help to identify an optimal moment for the leader to step down (if he can).

Photo Jordi Soldevila. Els Monstres d'Ingres. La hipocresia 

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