When a CEO Should Resign

According to a Harvard Business Review article by Xueming Luo of the University of Texas at Arlington and two associates, the average optimal CEO tenure is just 4.8 years.

Doesn’t this seem a very short period of time for a CEO to have a measurably beneficial impact on the changing and complex organization?

Let’s take a closer look at the thinking behind the assertion that lines up with much of our Leadership Training Programs research…

The five-year term recommendation was made because, on average, it is at that stage that CEOs become more interested in avoiding losses than taking the risks that might result in significant gains. The status quo becomes a bit too comfortable as they get more solidly established in their position. A new CEO could bring new energy, a fresh perspective and, ultimately, more effective leadership. And, yet, CEOs who have stayed long-term with an organization are highly skilled at maintaining positive relations with the work force.

As a CEO, evaluate your strengths so that you can find a balance that suits you, your temperament, and your organization.

If you sense you are overstaying your effectiveness, move on to the next challenge.