The average time a CEO stays in post these days is just five years, with a significant number staying only two, according to new research. Thomas Keil and Marianna Zangrillo, writing for MIT Sloan Management Review, set out to discover what is going wrong.
The authors interviewed more than 100 CEOs, top level executives, board members and recruiting firm leaders and concluded that, aside from poor choices, it is the absence of a definitive mandate that often sets up a new CEO to fail.
The consequences can be enormous for the organisation – lack of development, overall instability, loss of key players and huge financial cost, including finder fees that can reach seven figures. A Strategy& study showed botched appointments cause market value losses of more than $100bn each year.