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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.

As Piyush Gupta reflected, “As CEO, you never get told the full truth. Everybody puts a spin on information by the time it comes to you.

In the year ahead, he surveyed the broader employee base as well as customers and learned that “we didn’t have that same emotional connectivity with our guests.” Or with Hyatt colleagues out on the front lines. Hoplamazian dedicated time to meeting with many of them. Through his own and others’ probing into the colleague experience, he realized that the company evaluated employees largely based on their compliance with an elaborate set of rules and that “we tracked success in our hotels by compliance with a list of brand standards, not guest feedback.

PE firms act quickly if early targets are missed. Indeed, research has found that one-third of PE CEOs are forced out within the first one hundred days of PE ownership.

Improving the performance of companies that are performing fairly well is now the predominant objective, and PE firms have learned that a CEO’s people leadership abilities are the vital complement to strength in finance and operations for this new frontier of performance improvement.