A study was conducted by Harvard to assess the best-performing CEOs. The leaders at Zara, Mastercard and LVMH emerged as the best due to their weighted average in terms of longevity and performance. Some factors emerged from this survey on why so many CEOs fail. The first reason might surprise, but it is true that the longer one stays in the comfort of one top position, the lesser gets his/her effectivity at work. A case in point being Jeff Immelt under whom GE has suffered massive losses on several parameters. That is why the average tenure of CEOs has been falling as marketing research firm Equilar has shown in its findings. Another reason quoted has been that too much of early success can lead to either excessive risk-taking in the future or the onslaught of hubris leading to complacency. Top Management Teams (TMT) can also hinder growth as they may either try to prove themselves constantly to the CEO, or simply undermine him/her. Sometimes, CEOs may simply perform poorly as happened with Blockbuster or Kodak. The board needs to be proactive so a lack of vigilance on their part may also hinder growth. Sadly, sometimes all it takes to bring down a CEO’s reputation is some sort of a scandal as happened with Caterpillar’s Doug Oberhelman.

Source:https://knowledge.insead.edu/leadership-organisations/six-reasons-ceos-fail-9806

Uploaded Date:09 August 2018