own; demand for competent CEOs ishigh, and successful CEOs are oftenpresented with better opportunities.Regardless of the reasons for shrink-ing CEO tenures, they must be hav-ing effects on organizations.

Undoubtedly some of these effectsare negative, but there is at least onepotential effect that could be highlypositive. High CEO turnover ratescould be an impetus for people andorganizations to fundamentallychange their way of thinking about

the source of leadership, sparking ashift toward connected leadership—amore inclusive and collective type ofleadership that places organizationsin a better position to deal withtoday’s complex and unpredictablechallenges than does the traditionalmodel of the “heroic” or “celebrity”individual leader.

If an organization goes throughthree CEOs in five years, forinstance, the board and leaders at alllevels might start asking an obviousquestion: How can the organizationhave effective leadership when its topleader keeps changing? This in turnmight lead the board and other lead-ers to pay more attention to elements

SARAH GLOVERGlover is CCL’s research and devel-opment process manager. She holds aB.S. degree from Guilford College.

CEO turnover is nothing new, but inrecent years the tenures of CEOshave been getting shorter and shorter.Annual studies by strategy and tech-nology consulting firm Booz AllenHamilton found that the CEOturnover rate peaked in 2000 at 11.2percent, dropped in 2001 to 9.2 per-cent, and rose again in 2002 to 10.1percent. (The rate in 1995 was 6 per-cent.) And a recent study by humanresource consulting firm Drake BeamMorin found that in 1984, 35 percentof CEOs had been in their positionsfor at least ten years; by the turn ofthe century that figure had droppedby more than half.

The compression of CEO tenure isan ongoing trend, and many CEOshold their posts for as little as one totwo years. That’s hardly enough timefor them to prove themselves bydeveloping and implementing solidstrategies that have a lasting impact.

CEO turnover is a complex issuethat can’t be traced to a single cause.In 2002, according to Booz AllenHamilton, 39 percent of CEOturnover was involuntary and perfor-mance related. Boards of directorsoften grow impatient with CEOs whodon’t produce results quickly.However, CEOs also depart on their

A Q U E S T I O Nof

LEADERSHIP

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of connectivity—culture, values, sys-tems, networks, processes, and rela-tionships—that hold organizationstogether during turbulent times. Andthat might result in groups and indi-viduals beginning to share the tasksof leadership—setting direction, gain-ing commitment, and maintainingalignment—which can be a moreeffective way to practice leadership intoday’s business environment.

In this sense the diminishingtenure of CEOs is a red herring.Organizations lose uncounted oppor-tunities as they wait to see what kindof leadership each new CEO willbring, while other sources of leader-ship go ignored and untapped. Manyorganizations are hung up on the ideathat leadership depends completelyon the individual at the top. But ifthey go through enough CEOs in ashort enough time, they might beginto sign onto a model of leadership inwhich all employees are involved insetting direction, building commit-ment to the work and to one another,and staying aligned with commongoals in ways that aren’t negated witheach CEO succession.

The silver lining in shrinking CEOtenures is that they provide an oppor-tunity for organizations to start think-ing about leadership in a broaderway. When the tasks of leadership areperceived as being embedded in rela-tionships and processes, moreemployees can see and understandtheir roles in accomplishing thosetasks, and the organization becomesmore adaptable to changing condi-tions, no matter who is nominally atthe helm.

At least one potential

effect of CEO turnover

could be highly positive.

Editor’s note: To learn more about con-nected leadership, see Leadership inAction, March–April 2003, 23(1), aspecial issue on this topic.

organization to prepare for thechanges to come. Enough space isprovided for the intellectual and emo-tional processes of saying goodbye tothe outgoing CEO and paving the wayfor his or her successor. To return tothe viral-infection metaphor, it’s asthough the organization has beengiven a preventive inoculation. Theorganizational patient, although show-ing signs of illness, will generallyrecover quickly and emerge healthy.

The involuntary departure of aCEO usually comes suddenly andresults in significant signs of organi-zational disease. Major initiativessuch as product development pro-grams that were led by and closelyassociated with the CEO lose direc-tion and momentum or are put onhold. Subordinate leaders who remainwith the organization often experi-ence anger, disillusionment, and aloss of motivation. They may becomeinsecure about their own jobs, non-committal, and defensive.

If the organization has been incrisis before the CEO’s firing, his orher departure will in one sense be arelief but will also leave the organi-zation feverish and bedridden. Senior

ZOË VAN ZWANENBERGVan Zwanenberg is CEO of theScottish Leadership Foundation, anorganization that aims to raise thequality and effectiveness of publicservices in Scotland by encouragingthe development of leadership at alllevels.

Recently the press has been filledwith accounts of the dwindlingtenures of CEOs in both the publicand private sectors. The departure ofa CEO has undeniable implicationsfor his or her organization, but theseimplications vary in severity depend-ing on the circumstances under whichthe CEO leaves.

The loss of any central figure inone’s life, whether at home or atwork, precipitates intellectual andemotional responses that can rangefrom grief to relief and from a senseof loss of direction to a feeling ofnewfound freedom. Of course, nega-tive responses tend to be the mostdisruptive, and in an organizationalcontext they lead to characteristicssimilar to those of a viral infection:uncomfortable but nonfatal symp-toms, a loss of energy and momen-tum, and a slow and fitful recovery.

There are three ways in which aCEO can leave an organization: volun-tarily, involuntarily (having been fired),or as a result of his or her death.

A voluntary departure is probablythe best-case scenario for the organi-zation. When a CEO leaves by his orher own decision, either to retire or totake a better or more challenging job,there is generally enough lead timefor both the departing CEO and the

How are the shrinking tenures of CEOsaffecting organizations?

managers may be like deer in theheadlights—frozen by their ownsense of guilt over their role in what-ever led to the CEO’s ouster andwaiting for a cure to be administeredfrom the outside.

The death of a CEO may be themost disruptive changing of theguard. There is grief and an awkwardperiod during which no one wants tomake the first move to pick up thereins. Senior leaders may avoid tak-ing any action for fear of being seenas disloyal to the departed, or a ques-tionable initiative that was favored bythe CEO but did not have universalsupport in the organization may bepushed through as a way to honor theCEO’s memory. Anyone who doespick up the reins, either temporarilyor permanently, may be comparedunfavorably with the departed CEO,particularly if he or she countermandsthe predecessor’s directions andwishes or introduces a completelynew direction. When a CEO dies, theorganizational system goes intoshock, and it needs intensive care toreturn to health.

Regardless of the circumstance inwhich there is a change of CEO, if ithappens with great regularity—ifthere are repeated infections in ashort time—one of two things canhappen, and neither is positive. Oneis that resistance is lowered and theorganization becomes more suscepti-ble to debilitating reactions, and theother is that employees become sojaded by the high CEO turnover ratethat they develop an immunity toany initiatives brought in by eachnew CEO.

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The loss of any central

figure precipitates a

range of responses.