We’ve all met C-level executives that didn’t seem to have a firm grasp of how to make their strategy work. Maybe they weren’t the right leader for the moment. Maybe they weren’t able to resolve a critical blind spot that proved a fatal foil to their big strategy. Or maybe they had the charisma of an armchair.
We all have stories.
And we all know that too often politeness, politics or plain old inertia prevents much being done about poor executive performance until the problem becomes simply too big to ignore or becomes a global headline on 24-hour rotation.
Here’s what else that avoidance may cost in hard dollars and cents:
- Poor leadership costs our economy $360 billion each year in lost employee productivity;
- Poor leadership is responsible for up to 30 percent of employee turnover; and,
- As customer retention is related to employee retention, poor leadership can be pointed to as a cause of customer turnover.
In sum, poor executive leadership costs the average company seven percent of their annual revenue. For anyone serious about business, that’s a significant amount.
So what can be done?
Many wrongly assume that executive complacency is just a phase, and that the behavior will correct itself next quarter, or maybe next year. Unfortunately, that’s rarely the case. And with an average tenure for a departing CEO now at 9.7 years, this is not a chance corporations can afford to take.
Instead of waiting and wishing, corporations should take an aggressive approach to replace executives that aren’t moving the organization forward. If an executive is suspect, boards need to elicit feedback from all levels of the organization to be sure of their suspicions. If confirmed, they should act fast to find a highly-motivated and driven replacement to reorient the business on a more profitable trajectory.
They might even consider talking to us. We have an idea or two on how to find the right leadership to get your company on track and moving forward.