Oct 14, 2010

Why do failed CEOs keep getting chances?



Michael Brisciana asks Does Firing Guarantee Future Success?
why is it that once someone reaches a certain level in an organization, it seems that even if they “fail” repeatedly and get fired (sometimes several times), they seem to re-surface months later in a similar (or better) job at another organization? And what does this say about Boards, CEO’s, and other senior managers that they often put their faith in “re-treads” instead of taking a chance on talented, high-potential (but non-pedigreed) “new blood”?

Case In Point

Last week, Hewlett Packard hired Leo Apotheker as its new CEO — seven months after Mr. Apotheker had been forced out of rival SAP after only seven months at the helm.

One of the reasons for this is that organizations are risk averse systems. It is extremely unlikely that a VP in firm X would be hired as CEO of firm Y. There are two possible scenarios if firm Y is looking for a CEO. They would hire a current CXO to become their CEO or hire a CEO from any other firm to become their CEO.

Heads of internal businesses are often overlooked for top jobs because of internal politics issues or because they are identified too closely with one business - forcing Boards to look externally for a CEO. Successful CEOs are usually not available for hire when organizations need them :-) So organizations make do with average or fired CEOs.