83 per cent of businesses plan to replace their leader over the next five years.
A significant 83 per cent of business leaders expect to be replaced within just five years, according to a poll of business 503 CEOs commissioned by SkillSoft, a global e-learning company.
With high levels of authority and an even bigger pay cheque, it’s easy to think of the chief executive officer position as a job for life. But it would appear that the role is becoming increasingly fragile. Maintaining the position as CEO is becoming tougher as businesses are constantly seeking fresh talent with innovative and strategic minds to drive the business forward.
The same research indicated that the top spot was even more temporary in the largest of companies. A third of CEOs with more than 1,499 employees, anticipated leaving the business within just two years. Whether larger companies are more demanding of top talent and feel it necessary to review their employees’ progress more regularly, or that employees feel more pressure within a larger business, is yet to be decided.
On the contrary, only 5 per cent of organisations with more than 1,499 employees said they had no plans for replacing their leaders. And nearly a fifth (19 per cent) of companies with between 500 and 749 employees claimed not to have replacement plans.
Kevin Young, managing director of SkillSoft EMEA, commented: “CEOs need to up their game if they want to keep their roles in such a competitive market. Businesses are becoming more ruthless, especially after the recession, so business leaders need to ensure they are cutting edge and can outshine competing candidates. This is exactly why not only valuable experience, but training and development is absolutely crucial for leaders to maintain, update and learn new skills.”
SkillSoft specialises in on-demand training and e-learning solutions for global enterprises, government and education agencies, and small to medium-sized businesses. The company’s services and products can help improve both the long-term training and short-term knowledge transfer needs of companies of all sizes.
Can’t quite believe this is at all surprising to most people. 5 years is a lifetime in business. Very few listed companies would expect to have a CEO forever. Most CEOs would look for another move up the ladder within 5 years as well: bigger company, wider remit, greater challenge etc.
It generally takes two or three years for the new CEO to turn the business round or make the changes which the board were set on when appointing the CEO. It is pretty difficult to judge the effectiveness of the CEO in under 2 years. After 3 years the CEO may be thinking of escape route if the Board are worrying at lack of progress. If the CEO has done a really outstanding job he will by then have been targeted by the usual headhunters and be attracted to a ‘bigger challenge’
It is a pity that so many boards and management teams are so impatient that continuity is so often broken.
Absolutely agree with John! If the top guy on a third year already plan a route out how can he/she get attached to the company or even get to know the company’s culture? If not how can he/she really add value to the company? At the end of the day number is just one thing, does anyone really care about sustainable development rather just in the coming years financial figures? To dress up the financial is not hard but it may do more harm to the organization!