When it comes to TSR over their full tenure, marathoners were hands down the strongest performers, accounting for eighty-eight out of the top one hundred. But when it comes to CAGR, the sprinters were the winners with forty-five out of the top one hundred. The mid-distance group trailed on both of these measures. These findings reinforce the observation that during the years of the Complacency Trap, years six through nine, CEOs’ performance may be less than stellar, dragging down the overall performance numbers for CEOs who stay on through those years.

But Nicholson and his navigator had determined this stretch of ocean posed no grave danger. Except, that was, for the thousand-mile-long string of coral reefs the Vestas Wind had unwittingly sailed straight into.

How could this have happened? Especially given that the captain and navigator had access to a remarkable array of high-tech navigational equipment. The official report concluded that the navigator had misread some data and failed to access other sources that would have alerted him to the danger. He had come to believe that the reefs they were fast approaching were underwater mountains— called sea mounts— the peaks of which were some forty meters below the surface. In making that assessment, he had not attended to a signal given by one important piece of equipment called a C-Map.

When CEOs depart during the Complacency Trap stage of the life cycle, generally from years six to ten, inefficiencies that have crept into the organization and problems that have been festering— such as an underperforming unit or product line— constitute much of the low-hanging fruit their successors immediately go after. This invites the question: If those problems are so apparent to new leaders and boards that appoint them, why haven’t they been more effectively addressed?

Chapter Five: Complacency Trap

1. John Clarke, “A Twenty-First-Century Shipwreck,” New Yorker, December 10, 2014, www.newyorker.com/sports/sporting-scene/twenty-first-century-shipwreck.