Explore the intricate world of CEO departures, analyzing global trends, turnover rates, and offering strategic advice for departing executives to navigate their career transitions successfully.
CEO departures have become commonplace in today’s fast-paced business world, whether through voluntary resignations or involuntary dismissals. Successfully navigating such transitions is crucial for both parties involved—the outgoing executives and the firms they leave.
As a professional headhunter and executive coach, I’ve had the opportunity to closely observe CEO departures and the potential aftermath, allowing me to identify patterns over time. Frequently, individuals and organizations seeking advice on how best to manage these situations approach us. In this blog, I’ll delve into and share these valuable insights.
Global and Regional Trends in CEO Departures
In recent years, there has been a notable increase in CEO departures on a global scale. The rise in CEO turnover rates is a global phenomenon, influenced by various factors such as performance, scandals, retirement, and forced exits, with differences observed between regions.
Turnover Rates
- PwC Study (2020): A study of 2,500 major public companies globally indicated a rise in CEO departures. In 2020, the CEO turnover rate reached 14.3%, slightly down from 14.5% in 2019.
- US CEO Changes (2021): In the US alone, the first eight months of 2021 saw a record 922 CEO changes, according to a report from global outplacement and business and executive coaching firm Challenger, Gray & Christmas, Inc. Notably, the Technology sector saw the highest turnover (188), followed by Nonprofits (112), Financial (111), Government/Education (100), and Health Care/Products (95).
Reasons for Turnover
1. Retirement and Internal Moves
- The analysis found that 10.2% of all departing CEOs retired, while 8.7% transitioned into other roles within their companies, usually as chairpersons or other members of the C-Suite.
2. Gender Dynamics
- Female CEO Appointments: The percentage of new female CEOs reached 11% in the US during the initial eight months of 2021, up from 8.6% in 2020.
3. Forced Exists
- Global Comparison (PwC): A PwC Strategy & CEO Succession study (2018) revealed a global rise in CEO turnover rates, with nearly 20% being forced exits. This trend is more pronounced in North America, where involuntary turnovers accounted for 31% of total CEO departures, contrasting with just 15% in Europe, the Middle East, and Africa (EMEA).
4. Regional Insights
- EMEA Region: CEO departure data for the Europe, Middle East, and Africa region isn't consolidated. However, studies highlight significant CEO turnovers. For instance, in the UK's FTSE 100 companies between 2007 and 2018, 43 CEO changes were recorded, primarily due to resignations or dismissals for poor performance, illness, or scandals.
- Germany: Among the top 30 DAX-listed companies increased by 30% in 2017. Notably 37% of departures we attributed to performance-related reasons. Insights on Forced Exists
CEO departures are a global phenomenon, subject to numerous factors, including performance, scandals, retirement, or personal decisions. Regional disparities exist in turnover rates and reasons, emphasizing the complex nature of CEO transitions worldwide.
Advice for Departing CEOs
Embarking on a new chapter as a departing CEO brings forth a myriad of possibilities, and partnering with seasoned headhunters presents unique avenues for exploration. In navigating this pivotal transition, strategic approaches play a key role. Here, I outline key strategies tailored to guide your journey beyond the executive suite.
First and foremost, pinpoint Your Unique Value Proposition: Understand what sets you apart and how best you create value for a company. Your unparalleled skills, experiences, and strengths serve as the compass guiding your next career trajectory.
1. Update Your Brand: Reinvent and update your brand to reflect your current skills, abilities, and experiences. Platforms like LinkedIn offer an ideal space to refurbish your CV and showcase your industry expertise.
2. Expand Your Network: Never underestimate the power of networking. Engage with peer executives, industry colleagues, former clients, and other contacts to unearth potential opportunities.
3. Reflect and Refine: Take time to reflect on your past experiences, strengths, and areas for improvement. This reflection fuels growth and refinement.
4. Leverage Professional Guidance: Engage with executive coaches, career advisors, or headhunters to gain valuable insights and a renewed perspective for navigating the job market.
5. Stay Positive and Confident: Embrace the inherent uncertainty with a positive outlook. Conveying readiness to embrace novel challenges sets a compelling tone for potential employers.
6. Stay Informed and Adaptable: Keep abreast of industry shifts, trends, and innovations. Demonstrating adaptability and a proactive learning ethos captivates potential employers.
7. Develop New Skills: Identify skill gaps to bolster your candidacy. Pursuing further education or certifications in these areas heightens your appeal to potential employers.
8. Financial Readiness: Assess and fortify your financial health. A solid understanding of your finances eases job search stress, ensuring a more focused pursuit.
9. Define Clear Objectives: Define attainable career goals encompassing roles, industry preferences, company values and compensation expectations. These established targets act as your compass, fostering a determined and unwavering path forward.
10. Maintain Professionalism: Regardless of past circumstances, maintain a dignified stance. Avoid disparaging remarks about former colleagues or companies, underscoring your commitment to professionalism.
The Inner Game
Embarking on a new chapter, particularly amidst professional transitions, beckons not merely a phase of change but an opportune moment for self-exploration and growth. Here I offer a holistic approach, offering strategies to navigate this transformative journey.
1. Embrace the Situation: Look at the transition as a time for self-discovery and exploration rather than mourning the loss of the position. Embrace it as an avenue for self-discovery and exploration of other possibilities.
2. Seek Professional Guidance: Enlist the help of a professional coach or counselor to facilitate the healing process and reorient your professional compass.
3. Structure Amidst Uncertainty: A routine promotes stability and comfort during uncertain times. A structured schedule can serve as the anchor that grounds you when everything else feels up in the air.
4. Adopt Mindfulness: Embrace mindfulness practices to anchor yourself in the present, fostering self-awareness and reducing anxiety about the future.
5. Stay Positive: A positive mindset is integral to overcoming challenging situations. Affirm your abilities and values and believe in your power to shape your destiny.
6. Networking for Support: Leveraging professional connections, especially from fellow executives who've undergone similar experiences, can provide invaluable insights and emotional support.
7. Reassess Career Goals: Take the time to realign your career aspirations, navigating towards roles that resonate with newfound objectives.
8. Invest in Skills Development: Up-skill or re-skill to align your capabilities with the current job market trends, boosting confidence and employability.
9. Prioritize Self-Care: Incorporating stress-relieving activities into your routine, such as yoga, meditation, exercise, reading, etc., fosters emotional resilience ensuring a solid foundation for mental and physical well-being.
10. Be Open to New Opportunities: Remain open to diverse opportunities. You never know what exciting journey a new opportunity could lead you on.
Having thoroughly examined the world of CEO departures, these modifications aren't just statistics—they're narratives intertwining personal choices, industry dynamics, and pivotal shifts. Amidst global trends unveiling rising turnover rates and diverse regional nuances, there is transformative power.
Contact Petter Kleppe or the Norway executive team to help provide you or your organisation with strategies to navigate these transitions, turning periods of change into avenues for professional and personal advancement.
