CEOs have a high rate of failure when they step into a new role. Some estimates indicate outright failure of CEOs in the first 18 months of their tenure at 38% to 50%. Other sources suggest figures as high as 50-70%.

Entry into the CEO role can look different depending on the organisation size, whether they are an internal or external appointment, the sector, the type of company and many other variables. Research shows that internal CEOs improve long-term performance and engage in less strategic change, while hiring an outside CEO leads to more strategic change that results in lower long-term performance [2]. Many CEOs reach this north star due to their potential and their performance within their functional area of the organisation.

However, once a new CEO commences in the role, regardless of whether they have been an internal or external hire, oftentimes they face a steep learning curve as they confront issues like:

• Navigating Board relationships and behaviours
• Building Executive Team cohesion and effectiveness
• Understanding nuances of the company, territory, country
• Understanding regulatory and governance requirements
• Managing broader stakeholder relationships such as internal teams, external stakeholders and shareholders.
• Macro issues such as global trade regulations, understanding distribution channels etc.
• Identifying and implementing organisation-wide cost reduction programs.
• Assessing, adopting or adjusting and embracing the company culture

Experienced CEOs liken it to a pressure cooker environment, and whilst many believe they can learn on the job, this can lead to a wake of collateral damage without the right support.

Research from the University of Southern Carolina, indicates that the primary cause of external failures appears be an inability to develop trusting relationships, particularly with members of the Executive Leadership Team (ELT). Other sources assert that a whopping 82% of new CEOs fail because they don’t build relationships with their people.

Another critical relationship is that of the CEO, Board and Chair. Australian Institute of Company Directors, highlights that when the partnership between a board and CEO – and in particular, between chair and CEO – is dysfunctional, it is only a matter of time before it affects the organisation’s overall performance.

In times of high pressure, even the best leaders can revert to negative behaviours and fail to listen to all stakeholders. Stress can result in significant changes to behaviour patterns, which at the time may not be realised by the leader but can leave a lasting impact on their executive team, and the wider organisation. CEOs need to be able to maintain a sense of calm and order as they lead their organisations through challenges.

A CEO’s primary responsibility — company decision making—accounts for 45 percent of a company’s performance [1]. The flow on effect of poor decisions made by an underperforming or unprepared CEO, can be eternally damaging to a company’s reputation and amplify poor business performance.

Executive Coach Mentor, Scott Levy, indicates that feeling isolated is a reoccurring theme often cited by CEOs during Executive Coaching sessions. CEOs are often faced with weighty decisions that have lasting impacts, particularly on their people. Being the person responsible for these decisions can take its toll. 

Executive Coaching and Executive Mentoring both have key roles to play in supporting a CEO as they navigate their role. But often there is confusion around exactly what the difference is between the two.

The positive outcomes that can be gained from a successful executive coaching engagement are immense. According to Forbes “When leadership abilities are honed, the outcomes are multifaceted: improved strategic decision-making, amplified team dynamics and a consequent elevation in overall organisational efficacy.”

The benefits of establishing a trusted relationship with an Executive Coach extend beyond individual outcomes. In the vast majority of engagements facilitated by Stephenson Mansell Group over the last 26 years, outcome reporting demonstrates that the positive impacts extend beyond the individual to the Executive team, the wider organisation, and in some cases the industry and community.