Why CEO's Fail?


It’s a given fact that someone who has reached the top spot certainly is qualified (not necessarily formally educated), experienced, knowledgeable, ambitious, and has a burning desire to excel. One cannot climb to that position without these traits and much more. Failure of a CEO does not mean that he is not smart and lacks vision and is not a good executor.
CEO’s fail because somewhere down the line they lose their way. They become so much immersed in their dream that they sever ties with reality. They think they can do it, forgetting that, they cannot do it alone. Getting alienated from the core team, rubbing the Board the wrong way, believing in or creating a strategy that no one else understands, refusing to accept facts, challenging a market that needs a different approach are some other reasons why CEO‘s fail.
But CEO’s stumble mainly because they do not have the right people in the key areas. An article that Fortune published some 19 years back on ‘Why CEO’s fail?’ written by Ram Charan and Geoffrey Colvin states that ‘intellectual seduction’ is a major cause. A CEO believes that by hiring a highly talented person in a key position, failure is impossible, but he fails to remind himself that what happens if that key person fails. And when it happens, he is too shocked to react, so stunned he is by the occurrence.
And then comes the biggest factor; the inability to exercise emotional judgment. They know that a problem exists but they are unable to take the right decision at the right time and by the time they take it, it’s always too late. A CEO sometimes knows that X is not suited for the role and Y can do a better job but due to fear of antagonizing X, the CEO prefers to ignore the situation.
As Jack Welch, one of the most successful CEO’s ever, says, ‘we spend all our time on people. The day we screw up the people thing, this company is over.’
 And then who will need a CEO?

-          NZ

10.10.2019
BN: 153

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