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The Life Cycle of a CEO— Claudius A. Hildebrand & Robert J. Stark

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Introduction

In fact, Dave hadn’t been the first choice for the CEO position, or even the second or third choice. Word was five others had been offered the job before him. What’s more, a couple of years earlier he’d been unceremoniously fired from his position as divisional president at a leading competitor. No one would have suggested from his educational background, either, that he was CEO material. Not only did he not have a degree from an elite school, but it also took him six years to graduate. He hated college and he’d dropped out for a time.

As Dave’s first year in the CEO seat progressed, the sneering assessments of that Florida night prevailed on the Street; the company’s stock slid 40 percent.

2. Launch

Indeed, in a recent global survey of 422 CEOs, 68 percent shared that they believed they hadn’t been fully prepared for the role. They believed they had the required strategy and operations skills, but the gap in their preparation lay in what they discovered is unique to the CEO role: how unexpectedly emotionally challenging it is and the great intellectual agility it requires. They had underestimated how different the job is from any other leadership role they’d had in ways that are profoundly disorienting in the early days.

Terry Lundgren ran into stiff resistance while executing his strategic plan in the years of his Reinvention stage. As noted earlier, he was appointed CEO of Federated Department Stores in 2003 with the express mandate to make bold moves to expand the business. After just three months at the helm, Lundgren faced a golden opportunity: purchasing the legendary Marshall Field’s chain. The acquisition would take the company a grand leap forward, and he would become the steward of another of the nation’s most beloved retail brands.

As former Intel CEO Andy Grove wrote in his influential book Only the Paranoid Survive, “Business success contains the seeds of its own destruction.” CEOs who make it to the Complacency Trap stage have navigated the rough-and-tumble of the Launch, Calibration, and Reinvention stages of the first few years. One unintended consequence of leading their firms adroitly can be an overly assured attitude about the course they’ve set and the organizational improvements they’ve made.

Nigel Travis, who led Dunkin’ to strong revenue growth in nine years at the helm, observed in his book The Challenge Culture that companies “can quickly go from success to trouble . . . because the culture does not allow for challenging the status quo.” He shared with us that finding ways to break the spell of satisfaction with success was a main focus of his leadership. That was in part because of what he’d witnessed as a senior executive at Blockbuster.