March 4

CEO Impact: How Much Does Their Leadership Affect Others?

I love working with CEOs.  They are a different breed of people.  It is impossible to walk in their shoes until you have walked in their shoes.  The pressure is tremendous, and they don’t get enough credit for the pressure that they withstand.  Don’t get me wrong, the rewards can be immense. But they are always subjected to a high degree of risk and pressure. Their job is always on the line.

According to a recent Equilar study, the median tenure for CEOs at large-cap companies was 5.0 years at the end of 2017. Looking back historically at the companies included in the study, that figure has fallen from 6.0 since 2013.

The reason I love working with a CEO is that their energy and presence make a huge difference (good & bad).  Everything cascades down. I was reminded of this when talking to a business owner who occasionally takes time off to climb mountains.  When he returned recently, he found that his number two person didn’t lead people the way he would have led them and there was quite a bit of turmoil and upset because of it.  The number two person is not the number one person.  In the absence of a CEO, talented number twos are incredibly challenged because they don’t have the same amount of positional influence.  It’s different and much more challenging for the number two to take the lead when the CEO will eventually be returning.

The impact that a CEO has on the people and the culture of the organization cannot be underestimated.  It is incredibly powerful. No one position can dramatically affect an organization than its chief executive officer.  Big change and innovation require outstanding leadership and if the CEO is not outstanding, the organization struggles with both.

“The quality of leadership, more than any other single factor, determines the success or failure of an organization.”

Fred Fiedler and Martin Chemersin Improving Leadership Effectiveness

Here’s a quick story to illustrate my point.  In 1777, near Princeton New Jersey, the American army was rapidly retreating from the advancing British army.  The Americans were reacting in total fear and could only run away.  But then, something changed. They stopped running because a general by the name of Washington showed up on the battlefield.  In awe, they looked at the outstanding leader. His look alone gave them courage. One man alone showed up at the right time and provided a different source of energy. Energy for men to turn around, to face their fears, and to fight the enemy.  Leadership impact!

CEO’s leadership energy greatly matters.  Employees notice and closely observe CEOs. When things get tough in your organization, who do your troops take after?  They are following your lead (more than you know). If the CEO is clear that it is their leadership ability that limits or enables the rest of the organization, they will see opportunities for their development and the development of their executive team.

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