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CEO Paths to failure

Over the years I've worked with a lot of CEOs – I've helped hire them, mentored them and watched them in action. It's a lonely job – even with a supportive board of directors, you have to be the chief cheerleader, strategist, therapist and mentor to your team. Despite the best intentions of all parties, some CEOs fail – often they aren't the first to leave as a high caliber team will vote with their own feet early in the process.

Stuck in traffic yesterday as a result of the wave of storms coming into California, I found myself thinking about a conversation with a good friend who recently left a company because of CEO issues. He had debated his departure for a while and from time to time had discussed the issue with me. I'd seen the underlying cause of the departure before – all too familiar as it was one of the reasons on my mental checklist of CEO failures.

Here's a few of the causes on my list.

  • Micro-management; there are times when micro-management is a necessary skill such as dealing with a major crisis for a company that simply has to be resolved in a given time period. Setting short deadlines with rigorous follow-up can be very effective in crisis resolution. But sustained over a long period of time, micro-management by a CEO can ruin the best of teams. An effective management team doesn't need micro-management – set goals and let people get on with them. Persistent micro-management is a big red flag that something is wrong in the team – either there is a critical weakness in the team or the CEO hasn't got the comfort level to step back and let go. Either way, it's a problem.
  • Being disconnected; a CEO who isn't in touch with his team and customers is heading for trouble. A good team knows what needs to be done and has excellent recognition of looming problems – a good CEO listens to their team and keeps taking the pulse of what's happening and what needs to be done. Ditto with customers – your customers will tell you a lot about what's going on in your market and in your company. You just have to listen! Once a CEO gets disconnected, the team loses faith and quickly figures out that they need a solution – often, this is leaving for another job!
  • Not stepping up to lead; ironically, this can stem from a CEO spending too much time trying to keep connected! Every decision has to be made by consensus – often with the process of getting to consensus being long and painful. Decisions flip-flop and the team flounders. A successful CEO spends the time to understand the issues, bring people along in their own though process but ultimately makes a decision… and moves on.

There are other causes on the list for sure but these three stand out for me – they are the most frequented paths to CEO failure that I've seen over the years.

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Comments

Peter Cranstone

Totally agree. Great post. Should be required reading by entrepreneurs, but most won't get it until they've failed and have started over.

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STU PHILLIPS
MENLO PARK, CALIFORNIA

Intense Brit, lived in Silicon Valley since 1984. Avid pilot, like digital photography, ham radio and a bunch of other stuff. Official Geek.

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