Average CEO tenure at S&P 500 companies (in years) Aconsistent picture emerges from lists of top CEOs. In HBR’s Best-Performing CEOs ranking, Pablo Isla of Inditex, the parent company of Zara, Ajay Banga of Mastercard and Bernard Arnault of LVMH stand out for both performance and longevity. Between the three of them, these CEOs have served for 50 years marked by strong performance.
While the average tenure of HBR’s global top 100 CEOs is 17 years, the average tenure of S&P 500 CEOs is now around five years, a drop of 20 percent since 2013. Most such leaders tend to fail or get pushed out of the job long before the likes of the global top 100 even start to wobble. Longlasting iconic leaders are the exception rather than the rule.
The prevailing arguments used to explain success or failure mostly concern the CEOs’ personalities, especially transformational leadership characteristics, such as passion, risk-taking and tenacity. The failures are believed to be due to simple incompetence, rigidity, hubris or narcissism, traits that made the CEOs deaf to the changing world around them.
I argue that the “singularity hypothesis”, that it’s all down to the iconic man or woman at the top, is a myth. The reality is that much of a CEO’s success or failure can be ascribed to context. Specifically, I outline six factors below that contribute to the CEO’s success or failure, based on my research into, and teaching of, top executives.
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Listen To Your Customers
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The hand that feeds
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Survival secrets
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Plan backwards
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For a sweet deal
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Beyond the call of duty
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Focused on reality
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