STRACKHOUSE: We’re seeing CEO Darwinism taking hold–a survival of the fittest.
It’s a white-hot market for CEO talent, so highly qualified CEOs will move to more compelling opportunities. They don’t really work for the money anymore. It’s beyond that. It’s more about whether they like the work they’re doing and whether they are passionate about the company.
If the board has to worry about retaining the CEO, then it hasn’t done a good job of structuring a package that is effective. Also, the match [of the CEO] has to be pretty seamless, not only with the board, but with the entire management team and culture of the company. The analogy I like to use is a kidney transplant. Unless you have the right blood type and tissue match, you’re at great risk.
The biggest cost is the opportunity cost. People worry about who will be their new leader. Sometimes you lose other good people when the CEO leaves. It takes three to five months to conduct a search, then it takes another year or so for the CEO to integrate into the organization. These are costs that don’t show up on the company’s financial report.
With the significant wealth being created, many talented executives that can lead organizations with the level of complexity in the market today are going to opt out for quality-of-life reasons. That is more of a trend now than them wanting to be a CEO.
