Business Topics

Churn at the Top Kills Culture

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Stability at the top of an organization has many virtues. Despite this, some enterprises go through CEOs and other department heads like Kleenex. 

Today, the average tenure of a CEO in the United States is 4.6 years, or just a little longer than a presidential administration. But for every man or woman who has been sitting in the corner office for decades, there are two or three who will be gone in a heartbeat. 

In many organizations, C-Suite leaders rotate out of the organization within one or two years, requiring the installation of an entirely new leadership team. And, with that change comes the inevitable refrain, “This one is the right one – they’re bringing incredible experience/ideas/perspective to the organization.” 

Consequently, the new company boss tries to install a few changes that typically don’t stick and is moved out in short order. Then the pattern repeats.

Why does this happen? 
Sometimes there are unrealistic expectations that are set. Other times, it actually may be a poor hire. But rotating leaders in and out costs your company much more than simply hiring bonuses. It kills culture in ways you don’t realize.

I spoke with a friend recently who is working in an environment where they’ve had five new CEOs in the last seven years. While some may view this issue as causing pressure, confusion and constant priority changes for the organization, this wasn’t the core problem. The churn created inertia, where employees simply waited out the new CEO’s tenure, knowing they would be leaving soon and any new idea or initiative would be killed by the next incoming CEO.

My friend’s analogy was spot on, stating, “It’s like a single mom or dad that has another new boyfriend or girlfriend. As a child, you know it’s temporary. You don’t need to respect their authority or become close to them. You do what is necessary to appease them in the short term until they are rotated out for the next one.”

This is what kills culture. It’s not that the new hire might not be a great talent, have great ideas, be a great leader or have a great vision. If there is a track record in the organization where leaders come and go, the new hire won’t be successful because they are the proverbial “new friend.” They will not be respected nor listened to as employees anticipate their time at the company will be brief. 

Under those circumstances, employees will fight to maintain the status quo and resist change, recognizing that any time they have followed the directives in the past those efforts were short-lived, upended upon the arrival of the next new leader. And just like the new friend, the same type of individual is picked every time, and the pattern continues. Leadership might not see it, but employees sure do. So while you may think you just haven’t found the right leader, often it’s the organization’s reaction to historical churn. And that cycle is incredibly hard to break.

How do you escape?
Do yourself a favor and talk to your employees about what type of leader they want. Find out what has worked in the past and what hasn’t from their perspective. Identify employees internally that have the potential to take a leadership role in a few years and determine what they need to get there faster. Take a different approach to finding a new leader, whether a temporary employee who is there to prep an internal staff member for the job or even a totally different leader from outside the industry that signals it’s actually different this time. Otherwise, you’ll just churn through yet another friend.

[About the author:]
Andrea Belk Olson is the CEO of Pragmadik, which helps organizations of all sizes, from small businesses to Fortune 500, and has served as an outside consultant for EY and McKinsey. She is the author of three books, including her most recent, What To Ask: How To Learn What Customers Need but Don’t Tell You.

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