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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.

Building on our study findings that CEOs who lead through influence were the most effective, we followed up by conducting interviews to learn about the development advice and training these leaders had received. We asked leaders to describe how they made the journey to becoming the highly effective leaders they were. What emerged is that a leader’s evolution generally proceeds in iterative cycles, with steps forward often followed by backsliding into old habits and then a renewed effort at change. It’s a process of trial and error, and often of fits and starts, as the daily grind of immediate demands diverts attention from one’s inner work. Those who continue to progress in the journey typically go through a three-phase cycle.

First, they are confronted with a necessity for change either because they took on a new challenge that reveals the shortfalls in their leadership or through feedback from their higher-up, colleagues, or mentor.

Building strong relationships with your board members is another top priority of a new CEO. Yes, you’ve gone through an intensive interview process with them, and they’ve just selected you. But in the words of one CEO: “You won't know if you were selected by an inch or a mile.” Some directors may disagree with your vision and plans; some may even be dead set against you, but won’t share those sentiments with you.

8. Succeeding With Succession

One way in which we hope our CEO Life Cycle findings will held bend the curve of success for CEOs is by shedding light on these junctures so that CEOs can anticipate and prepare for them and boards can address these problems. In this chapter, we focus on another way the board relationship is often problematic: when a board is not closely involved with a CEO throughout their tenure, they are missing the opportunity to ensure that a strong bench of talented leaders who could be the next CEO are identified and their abilities are developed.

In general, board engagement in the succession process is limited until the time of the decision, which is usually within a year of the transition. Then, they might rush to judgment based on just one or perhaps two interviews with candidates, people with whom they’ve often had little or no other interactions. So little hands-on knowledge of candidates fuels the numerous cognitive biases in their decision-making. One bias is the preference for simplifying narratives, or relying on stereotypes about what a CEO should look and sound like to privilege candidates who are super confident or have a powerful physical presence or can claim bold, even brash, achievements.

We confronted this bias when we were advising about a succession and recommended the board take a more serious look at a candidate. They’d dismissed Alex as not having the needed smarts and being just a solid “doubles hitter” rather than the star slugger they were looking for. But our assessments indicated he had the smarts in spades, and as a doubles hitter, he was a real standout. We brought some of his accomplishments that had been underappreciated back to the board’s attention. We also coached him to project a stronger image, including sprucing up his attire. The combination did the trick, and the board selected Alex, who went on to achieve a great deal of success in an eight-year tenure.