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In Era of Shortened CEO Tenure, New Study Offers Keys to CEO Success

July 17, 2017

CEO pay may be rising, as reported in a recent Ticker post, but CEO tenure is getting shorter due to investor impatience in a rapidly changing marketplace, according to the recent Dow Jones Newswires article, “For CEOs, High Pay, Higher Anxiety.” Research by Crist/Kolder Associates cited in the article shows that in the first five months of 2017, 13 of the world’s largest companies (each with a market value of more than $40 billion) brought in new CEOs. This is more than twice the number of leadership changes seen in the same period last year, and many of the changes were driven by investors.

From January through June 2017, activist shareholders had launched at least nine campaigns in the most intense season since 2014, according to FactSet, a research firm cited in the article (for more on this, see the recent Ticker post on activist funds catalyzing board, C-suite turnover). “Growing shareholder clamor for quick results comes as new technologies are upending entire industries,” note the authors—describing a trend Harvard professor Clay Christenson has called “disruptive innovation.”

So how can a CEO survive in this environment? In the recent Harvard Business Review article, “What Sets Successful CEOs Apart,” researchers delving into the big data of 17,000 assessments of C-suite executives reveal decisiveness, ability to align stakeholders, adaptability and reliability as the four key behaviors of successful CEOs.

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