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New Trends: The transitions of executives and the failures.

June 26, 2018

 

Recent Studies on leaders who demonstrated success and showed intelligence, initiative, and results in their previous roles reveals that within two years of executive transitions, between one-in-four to one-half of them are classified as failures. Cited as the main challenges are organizational politics. Many transitioning executives lament having not changed the culture at a quicker pace to combat these effects, and internal vs external transitions have little effect on any listed sentiments. Yet, other surveys suggest even with a deliberate goal, these matters are difficult to handle. 79 percent of external and 69 percent of internal hires report that attempts to change the company culture change is taxing.


Despite these challenges, in today’s corporate world leadership transitions are more frequent, yet new leaders feel limited on the help they receive. With the pace and magnitude of change, investors might be unsurprised by the constantly rising number of transitions in the corporate world. Research suggests that CEO turnover rates have increased to 16.6 percent in 2015, when it was only at  11.6 percent in 2010. Additionally, within the first two years roughly 70 percent of new CEOs restructure the management teams of the company they take charge of. These transitions can often be seen cascading through senior ranks. And roughly the same amount of leaders report that their organizations now experience an increasing amount of transitions than they did in the year prior.


Keith Knutsson of Integrale Advisors commented, “Executive transitions should be comparable to surgery; if not taken care of carefully and in a precise manner, it can cause complications many years into the future.” 

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