Where do we go from here? Many companies are asking that question without clear leadership in place: 2019 was a record year for CEO turnovers, as were the first two months of 2020. While turnover hasn’t been as swift during the COVID-19 pandemic, what’s done is done. Some organizations are feeling the strain as they pivot through 2020’s twists and turns. But why are some doing better than others?
About 1,640 CEOs left their jobs in 2019. That’s a jump of 13% from 2018, and the highest turnover rate since 2002. The surge continued into 2020, with January’s total reaching nearly 40% more than January 2019. Unfortunately many of these turnovers didn’t come with a succession plan. Nearly half of U.S. CFOs haven’t named successors to fill their shoes when they leave, and they aren’t unique among the C-suite.
Even for those organizations who thought they were on a set, clear path in hiring a C-suite replacement have found business priorities turned inside out.
“For example, if a company that was performing well in a growth environment and brimming with confidence and cash was seeking a new leader before the crisis, the board’s objective might have been to find someone who could aggressively move the company into new markets by expanding its operations, driving innovation, and pushing the culture to take risks,” author and former CEO Dan Ciampa writes for Harvard Business Review. “But because of the coronavirus crisis, that same company now faces an economy that’s likely to be stalled for months, customers who are reluctant to buy, a supply chain that’s been devastated, and an organization that will need to be rebuilt after furloughs and layoffs. Instead of aggressive expansion, this company will need to cut product lines, rein in costs, and rebuild confidence both internally and externally. That scenario requires a different leader than the type the board had been envisioning just a few months ago.”
We asked our HT Cares! executive advisors what advice they offer organizations that have gaps in their executive leadership right now. What is the best way to move forward and turn this C-suite turnover into an opportunity?
Here’s what they had to say:
Judy Foley, Executive Advisor – COO, Supply Chain, Sourcing: “These are challenging times and you need to determine if you have the executive team that is able meet these challenges. Choose people who are line with the culture, who can achieve results under stressful times, and who know how to influence others to get on board with initiatives that help your organization to pivot to the new needs. Change is accepted much more easily when it is a matter of survival. Everyone wants to keep their job and help the company move forward and thrive.”
Cameron Wynne, Executive Advisor – Operations: “With the unprecedented challenges at the hands of COVID-19, turnover at the C-suite level should be welcomed, not feared, as an opportunity to pivot your business. This virus isn’t going away. The pandemic reality is upon us and the necessity for organizational redesign focused on this new reality and its many opportunities are paramount to future economic and ongoing success. The ability to manage and survive through this economic shift is not enough. Businesses must embrace bold leadership who will question the conventional, and who will pivot strategy and/or product based on economic, industry, and marketplace shifts to thrive in this changing market. To quote author Marshall Goldsmith, ‘What got you here won’t get you there.’”
Michael Francis, Executive Advisor – HR, Operations & Finance: “Historians, scholars, economists, professors and executives will look back on the disruptive changes that 2020 had on organizational leadership, structures and operations. From the ashes of adversity, rise new, challenging and accelerated opportunities. The question becomes: How did you respond? Candid discussions about the durability of the organization’s goals, leadership team, mission statement, operating policies, staff engagement and internal communications practices are absolutely required. While not all these need to be thoroughly vetted and solved immediately, each of them needs to be acknowledged and discussed in the final two quarters of 2020. The market, customers and staff will be waiting for unified executive guidance. This is definitely a time when real leaders lead out front.”
Shane Walsh, Executive Advisor – COO, Venture Capital: “The most common missed opportunity I’ve seen when hiring leaders is to overemphasize technical competence. In an executive-level role, your organization needs wisdom and leadership—both of which are developed through experience—more than specific technical knowledge. These openings now offer organizations the opportunity to reset themselves a bit; to hire for character and train for skill.”
Ken Eissing, Executive Advisor – CEO, Sales and Marketing: “Companies should view this time as an opportunity to significantly upgrade talent at the C-level within their organizations. Given the challenges of the last few months and how severely so many businesses have been impacted, there is world-class C-level talent currently sitting on the sidelines looking for their next challenges. Businesses should think through the skills and experiences that will be required to succeed in the new economic reality and aggressively seek out that talent who may have been unattainable to recruit just a few short months ago.”
Andy Lambrecht, Executive Advisor – CMO: “Whether you plan to hire permanently or not, your organization still needs to execute plans and move forward. An interim executive can help reduce the load on the team while bringing the added benefit of fresh insights and ideas from an outside perspective.”
Pivoting is tough in any environment. This year presents challenges the likes of which no business leader has seen before. If you find yourself wondering how to move forward, consider seeking the advice of our HT Cares! executive advisors, who have been assembled for that exact purpose. Perhaps a fractional or interim executive is who you need to snap out of decision paralysis and create a path forward. Or maybe this is the moment you can fill a key C-suite position by recruiting a previously unrecruitable business leader. Identify your new challenges and consider your opportunities to move forward with leadership that can breathe new life into your organization.