A Brave New World: Shrinking Leadership Tenures
Like it or not, there’s a new leadership reality coming. The post-pandemic period has brought permanent changes and challenges to the U.S. workforce, including condensed CEO leadership tenures. For boards and executive leadership teams, the time to prepare is now.
Baby Boomers, those born between 1946 and 1964, continue to retire in record numbers. They are being replaced by talented, energetic, innovative and dynamic X-Gens (born 1965-1980) and experienced Millennials (born 1981-1996).
These new cohorts will naturally give you three-to-five years of leadership, readily stay for five-to-seven years, and optimistically may endure for only seven-to-ten years.
You heard me right. No longer will organizations encounter leaders who readily extend tenures beyond ten years. I know, I know, there’s always an exception to the rule, and this new reality is no different. However, what we have observed and what you may experience in your organization when a leader stays beyond ten years, is a palpable drop off in:
- Leadership efficacy
- Organizational impact
- Staff and stakeholder receptivity
That’s because the same leader with the same voice naturally dulls over time. So embrace this new leadership tenure reality, because while it may be different than in generations past, it’s giving organizations the opportunity to remain fresh, relevant and engaged with their target audience.
Best practices for a new reality
This new generation of leaders have unique and different aspirations and goal sets than their predecessors. They also maintain an aversion to overstaying their welcome and potentially missing out on the next frontier of challenge and growth. In fact, in order to achieve their highest career goals & aspirations (HCGA), an X-Gen or Millennial may pursue three or four leadership stints before heading off into retirement.
Given this reality, organizations can no longer find themselves ill-prepared for regretted losses or leaders who get hit by the proverbial bus. Boards and executive leadership teams must ready themselves, being mindful of few important realities and best practices to reach max tenure in the current marketplace:
- CEO tenures are highly correlated to boards that are duly engaged, fundraising focused and devoid of dysfunction and over-reach.
- CEOs stay where they are fairly rewarded, compensated, and otherwise treated with dignity, respect and professionalism.
- Boards that are strategic, advisory and governance-focused have the best chances at retaining their leaders.
- Boards must encourage an early commitment to and intentionality towards succession planning and management, with the ultimate goal of producing discernible results and board alignment between years three and five.
- Boards must make CEOs accountable for succession planning results at the ELT or C-Suite levels as well.
Over the next five-to-ten years, X-Gen and Millennial executive leadership turnover and transition rates will occur at breakneck speeds compared to their Baby Boomer predecessors. Long-tenured leaders, those who stay north of ten years, are tied to a bygone era that will never return. As a result, Boards need to adapt their strategic planning, governance and succession management initiatives accordingly.
I urge you to ask: Is your Board ready to navigate the challenges of a brand-new, shrinking era of executive leadership?