Succeeding The Long-serving Legend In The Corner Office
Mitigate the risks associated with handing off the baton
It’s no secret that life at the top of the corporate world is becoming more challenging. Last year, nearly 17.5 percent of the CEOs of the world’s largest 2,500 companies left their posts — representing the highest rate of departures that PwC’s Strategy& CEO Success study has tallied in its existence. In 2000, a CEO could expect to remain in office for eight or more years, on average. Over the last decade, however, average CEO tenure has been only five years.
And yet a substantial subset of CEOs manages to run the equivalent of a corporate marathon, lasting nearly three times as long as the average boss. Even as the life of CEO becomes nasty, brutish, and short, 19 percent of all CEOs manage to remain at the top for 10 or more years, with a median tenure of 14 years. Some of these long-distance runners, typically company founders or visionaries who transformed their organizations, serve for 20 years, and in some cases for many years longer. All of them have had impressive runs atop their company and created a legacy.
But what happens when the baton is passed to the next runner? Sometimes things go great when a long-serving CEO departs. When Apple’s legendary founder Steve Jobs stepped down eight years ago for health reasons and Tim Cook ascended to the top job, it was hard to see how he could fill Jobs’s colossal shoes — even though Cook had been an effective chief operating officer and was the clear heir apparent. But Cook has done well: Annualized total shareholder returns since he took over in August 2011 averaged an impressive 20.9 percent through 2018.
Please select this link to read the complete article from strategy+business.