“The revolving door of management change is spinning fast in the U.K. and U.S. Why are so many CEOs stepping down?”
This is something that Shares magazine recently noted. Board seats, CEO and executive positions, and strategic roles are being filled four or five times in a short time span. Executive search partners are scratching their heads, trying to find the next promising candidate. We need to understand what is really ‘contaminating’ the chair, in order to interrupt this repetitive cycle.
Organizations are living systems. Nothing works in isolation: all elements in an organization are visibly and invisibly connected to each other. If we want to understand what is really going on, we need to explore the entire system and the underlying dynamics, not just fix the symptoms. Many organizations are solely focused on short term results, where regularly the roots of today’s challenges are to be found in the system’s history.
Looking through a systemic lens, there are some key dynamics that are leading to high executive turnover, most of them as a result of these three important systemic principles:
Nobody can leave the system unnoticed
If you have ever seen Russell Crowe in Ridley Scott’s Robin Hood, you might recall him in the guise of Sir Robin Longstride giving the death notice of King Richard Lionheart to the King’s mother. When he hands over the crown to her, you see the pain on her face for just one moment, and then she crowns her younger son John by saying: “The King is dead, long live the King.” The witnessing noble and peasant crowd instantly kneels down for the new King.
The organization might kneel down to the newly hired or assigned leader, but on a deeper level, their attention and energy will still be connected to the previous one. Many organizations forget to say goodbye to people, honor their contributions, and create time and space for the transition. They assume that the people reporting to them will go back to normal right away, denying the fact that there is a new and unknown ‘normal’. Employees may have strong attachments to the long-held relationship – interestingly enough, even when it was not a positive one – and to the traditions and banter.
Examples of this could be:
• The sudden death of the founding CEO, or one of the leaders that had a significant contribution to the company’s identity or prosperity
• A top leader is being dismissed from one day to the other. The official story does not match the real reason (fraud, ethical behavior, etc.), there is no goodbye
• An executive is leaving the business unit they are leading to take a headquarter role, right before that business gets sold. Employees feel they have abandoned ship
A specific place in the system can only be occupied by one person
It is critical to make sure everyone is actually fully occupying the place that they have in the organizational system – not the one up, not the one down, not someone else’s seat – and taking the full responsibility that comes with it. Is anyone constantly overstepping their own role and assuming someone else’s area of responsibility? Is anyone leaving their seat vacant? We have seen critical seats being left open, either by organizations not filling them or by the person occupying the seat being distracted by something else. We witness leaders with one foot in their managers’ roles, micromanaging the employees to disempowerment. We observe informal influencing and lobbying processes outside of the order.
Some examples that lead to high executive turnover:
• The founding father has retired but is keeping an office in the headquarters, making it very difficult for the next CEO to take their place
• The previous CEO became the president of the board of directors and is still highly involved in strategic and tactical issues, overstepping his position and intervening in the CEO’s matters
• The CEO is totally distracted by an activist investor, leaving the internal part of their chair empty, resulting in power plays in the executive team. Battles result in winners and losers, losers leave the company
It was an artificially created seat in the first place. A special assignment – once created and continuously refilled – will lead to unintended consequences later
The system prevails over the individuals. Obviously, people are a highly valuable asset in an organization. However, the task of a CEO is to create the organizational format needed to achieve the company’s goals. A company’s purpose and ambitions for the next period in relation to its environment will define the right organizational design.
• It’s not a matter of creating space for all and giving everybody a sense of belonging and work.
• Creating special assignments in order to avoid the tough people decisions, will lead to constructional issues. The foundation of the entire system becomes shaky
Where a special assignment could have been the right decision to honor someone’s special contribution and valuable expertise in the first place, it is critical to dismantle the role as soon as that person leaves. Successors in that chair will not be successful.
Leaders who don’t see these traps will be unsuccessful in optimizing the system in the long run. Systems simply don’t tolerate ‘moving on’, ‘forgetting’ or ‘excluding’. They will employ correcting mechanisms and entanglements until the real issues are attended to. The system is stronger than the individual. The strongest CEO, the most well-intended executive leader, the highly promising headhunted talent will not be able to overcome what is, in reality, a misunderstood, distorted system.
ABOUT THE AUTHORS
Mieke Jacobs and Paul Zonneveld are transformational facilitators, experts in systemic intelligence, and co-authors of the new book EMERGENT.