Wednesday, July 9, 2008

CEO Troubles Down the Road

The CEO's 2ND Act.
By: Nadler, David A.,
Harvard Business Review,
Jan 2007, Vol. 85, Issue 1

Facing a familiar problem, the CEO can be expected to do what he was hired to do. Indeed, research presented in "Are Leaders Portable?" by Boris Groysberg, Andrew N. McLean, and Nitin Nohria (HBR May 2006), indicates that leaders succeed when the skills demanded in their new positions directly draw upon the executives' professional backgrounds and experiences. But familiar problems are inevitably succeeded by less familiar ones, for which the specially selected CEO is not quite so qualified. More often than not, the experiences, skills, and temperament that yielded triumph in Act I turn out to be unequal to Act II's difficulties. In fact, the approaches that worked so brilliantly in Act I may be the very opposite of what is needed to bring Act II to a happy resolution.

Leadership style is a function of years of development and experiences, and it is an outgrowth of personality and character. Achieving a dramatic change in leadership style is difficult for anyone, but it's particularly hard for people in their fifth or sixth decade who have been responsible for a long string of successes. Personality and character aside, such people have developed systems for leading, so to speak, that they can't bring themselves to jettison. In fact, when faced with resistance during Act II to their customary modes of acting, some leaders hang on more tightly than ever to the devices that have long kept them afloat.

Recognize that the board has a role to play in mentoring and coaching the CEO. Too often, the board takes a hands-off approach until it becomes apparent that the CEO is faltering.

• When faced with a crisis, recognize that you may need to think about a two-stage succession process. Consider bringing in a CEO specifically to handle the immediate problems. Make clear that once the crisis has been resolved, you may look for another CEO, one who is better suited to dealing with the next round of issues.

David A. Nadler ( is the chairman of New York-based Mercer Delta Consulting, a global management consulting firm that specializes in executive leadership, organizational change, and corporate governance.

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