CEO turnover

Geoff Colvin’s article in Fortune this week was about problems that seem to crop up repeatedly in his interviews.  The one that caught my attention was the complaint he keeps hearing that “My Leader Won’t Lead.” If you have been reading my blog, this is one of my recurring themes. Leaders need to step out of the shadows and speak up. Colvin recommends as part of his Recession Checklist that CEOs “Stand Up and Be Seen.” He says that it’s an easy and powerful way to be effective. He cites the raised profile of Warren Buffett who has helped calm the markets during these tough times.  Colvin remarks that standing up and being seen does not require tons of investment and technological wizardry. I agree wholeheartedly. We’re not talking about celebrating celebrity CEOs, but building back CEO reputations and credibility when perceptions of this office are so low.

This morning I ran across an article in The Economist that went a long way in confirming what I already believe and hopefully outlined in “Resetting CEO Reputation” in the Huffington Post. The Economist describes how our rejection of celebrity CEO types resulted in too many companies full of “faceless” CEOs. I had to laugh out loud at this line: “Watch the parade of chief executives who appear on CNBC every day, or drop in to a high-powered conference, and you begin to wonder whether cloning is more advanced than scientists are letting on.” Pretty clever. The writer then carefully explains why most CEOs are faceless today and who’s to blame them! Everywhere you turn you find board-fired CEOs, public anger about overboard executive compensation and management consultants calling on CEOs to be more humble and Everyman. The Economist warns us: “Yet there is surely a danger of taking all this too far. A low profile is no guarantee against corporate failure… In general, the corporate world needs its flamboyant visionaries and raging egomaniacs rather more than its humble leaders and corporate civil servants. Think of the people who have shaped the modern business landscape, and ‘faceless’ and ‘humble’ are not the first words that come to mind.” A reasonable point. The article advises leaders to be bold, not bland. In another line that hit home, the writer says: “These are people who have created the future, rather than merely managing change, through the force of their personalities and the strength of their visions.” Less managing and more leading.

Essentially, Colvin and the Economist writer are calling for leaders who may be talented guys and gals operationally but who also recognize that they can lead us out of this unprecendented economic downturn by putting a face on their companies and being memorable without being too glitzy. As the article notes at the end, “There is no long-term comparative advantage in being forgettable.” Amen. If the two can be combined and why not, we can have our cake and eat it too.

One of my favorite all time subjects is CEO reputation. I spend alot of time thinking about how it is changing, are there new shifts, who is doing what, how they can improve reputation and other meaningful and meaningless thoughts. Over the past few months I have mentioned on this blog my growing sense that CEOs are finally leaving their bunkers and starting to engage with stakeholders. They certainly have been communicating internally but signs are pointing to the resetting of CEO reputations.

I was lucky enough to have something published yesterday on the Huffington Post blog site about CEO re-emergence. Take a read.

CEO turnover seems to be topical right now. Perhaps it is because quarterly CEO turnover results are being reported or because everyone is still interested in these captains of industry, despite the poor reputation of CEOs. In the past few weeks, I’ve noticed several articles about why no one at the top is playing musical chairs like they used to. Here is an article that I was recently quoted in on CEO turnover because of my keen interest in CEOs and what’s happening to their reputations.

Luckily I noticed an article on the last page (hard copy) of today’s WSJ “B” section on apparel CEO William McComb of Claiborne. Joann Lublin called him a “survivor chief executive” or what I might rename a survivor-in-chief. This nomenclature is presumably due to the fact that boards are not as trigger happy as they used to be because they cannot afford to rock the markets nor their stock prices anymore than they have been this past year. There are several other reasons why CEOs are remaining in their suites:

1. Boards are abiding by the proverb: “Better the Devil you know than the Devil you don’t.” Familiarity does not always breed contempt. It may breed job security and comfort instead.
2. CEOs themselves are less likely to be looking for new jobs because of the slim pickings and accompanying risk. There are no risk-free companies anymore.
3. There are fewer mergers and acquisitions. In most M&As, one of the CEOs usually leaves for greener pastures or the golf course. Just being sarcastic. Most CEOs do not want to be seen on the golf course these days.

Everyone is sitting tight right now to weather the economic headwinds. My sense is that CEO turnover will heat up again once the economy stabilizes and boards are willing to take on more risk without angering investors and raising questions from the media.