Impact of Leadership Transitions on Companies

Don't fire your CRO!! Research which analyzed over 150 B2B organizations, found that more than half (𝟱𝟲%) experienced a decline in their growth rate in the first full year after CRO turnover. This statistic becomes even more troubling when considering that 𝟲𝟮% of companies report flat or declining growth following a CRO change. External hires, which are typically seen as a way to inject fresh ideas and energy, actually led to a 𝟳.𝟭% decline in growth rate. It’s a costly mistake. Too often, companies turn to CRO turnover as a quick fix when growth stalls, but the disruption this causes can grind initiatives to a halt. New CROs bring their own “playbooks” and often make significant changes that don’t align with existing growth strategies. Rather than looking outside the organization for a solution, our research suggests a more strategic approach: ↳ 𝗦𝘁𝗿𝗲𝗻𝗴𝘁𝗵𝗲𝗻 𝗥𝗲𝘃𝗢𝗽𝘀: Revenue Operations (RevOps) is the engine that powers effective decision-making. When RevOps is optimized, CROs can leverage better data and insights, making them far more effective in their role. ↳ 𝗣𝗿𝗼𝗺𝗼𝘁𝗲 𝗳𝗿𝗼𝗺 𝗪𝗶𝘁𝗵𝗶𝗻: Internal candidates tend to perform better than external hires when stepping into the CRO role. Perhaps counterintuitively, we found that even when internal candidates didn’t have prior CRO experience, they still outperformed external hires. The reason is simple: they understand the business and its unique growth challenges, which allows for greater continuity and less disruption. ↳ 𝗜𝗻𝘃𝗲𝘀𝘁 𝗶𝗻 𝗟𝗲𝗮𝗱𝗲𝗿𝘀𝗵𝗶𝗽 𝗗𝗲𝘃𝗲𝗹𝗼𝗽𝗺𝗲𝗻𝘁: Too often, companies fail to develop a robust succession plan. By investing in leadership development and creating clear pathways to the CRO role, organizations can ensure smoother transitions and maintain momentum in their growth initiatives. 𝗪𝗵𝘆 𝗶𝘀 𝗖𝗥𝗢 𝘁𝘂𝗿𝗻𝗼𝘃𝗲𝗿 𝗶𝘀 𝘀𝗼 𝗱𝗮𝗺𝗮𝗴𝗶𝗻𝗴 𝘁𝗼 𝗴𝗿𝗼𝘄𝘁𝗵? When a CRO departs, growth plans and key initiatives are often paused or abandoned. It also has a ripple effect on the rest of the commercial leadership team, leading to further turnover. Even when new CROs bring valuable skills, their strategies may not align with the company’s goals, causing even more disruption. 𝗖𝗥𝗢 𝘁𝘂𝗿𝗻𝗼𝘃𝗲𝗿 𝗶𝘀 𝗲𝘅𝗽𝗲𝗻𝘀𝗶𝘃𝗲, and it’s critical for companies to take a hard look at their operating environment before deciding to make a change. Ask yourself: 𝘏𝘰𝘸 𝘴𝘵𝘳𝘰𝘯𝘨 𝘪𝘴 𝘰𝘶𝘳 𝘙𝘦𝘷𝘖𝘱𝘴 𝘵𝘦𝘢𝘮? 𝘐𝘴 𝘵𝘩𝘦 𝘥𝘢𝘵𝘢 𝘳𝘦𝘭𝘪𝘢𝘣𝘭𝘦? 𝘋𝘰 𝘸𝘦 𝘩𝘢𝘷𝘦 𝘢 𝘤𝘭𝘦𝘢𝘳 𝘴𝘶𝘤𝘤𝘦𝘴𝘴𝘪𝘰𝘯 𝘱𝘭𝘢𝘯 𝘪𝘯 𝘱𝘭𝘢𝘤𝘦? The bottom line is simple: don’t view CRO turnover as a quick fix. Firing your CRO without addressing the underlying issues can often do more harm than good. If a change is necessary, promoting from within should be your first option. At the end of the day, stability in leadership—combined with strong RevOps—can deliver far greater results than constantly seeking new leadership.

There were two stories last week about potential executive leadership changes at JPMorgan Chase and BlackRock. There was uncertainty over the success process. This made me think about the risks when succession planning processes are lacking whether at a managerial or executive level. The impacts of when succession for key roles is uncertain include operational disruptions, loss of organizational knowledge, and diminished stakeholder confidence. Without a clear plan, companies may struggle to maintain stability and continuity during leadership transitions, potentially affecting overall performance and morale. To mitigate these risks, I recommend leaders take the following actions to establish an effective succession planning process: 1) Evaluate critical roles within the organization and identify potential successors, considering their skills, experience, and leadership potential 2) Invest in development programs that enhance the skills and capabilities of identified successors. Provide mentoring and coaching opportunities to prepare them for future leadership roles 3) Ensure the succession plan is a living document by regularly reviewing and updating it to reflect changes in the organization, market conditions, and individual progress. By proactively addressing succession planning, leaders can reduce the risk of not achieving success and enhance the resilience of their organizations. What do you believe is critical to an effective succession planning process? #RiskManagement #Talent #Strategy #Leaders Longview Leader Corporation

Have you ever had a leader leave just after “take-off” of a new initiative? 🛫 In my experience, many leaders only stay in a position for 2-3 years before they are promoted or leave the company for a different job. This high level of turnover in leadership can have profound implications for a business. It can impact trust, instill a culture of fear and instability, and even affect financial performance. While we can reduce turnover by creating good workplace culture, offering professional development opportunities, competitive compensation and benefits, and good performance management and feedback systems, it is imperative that we also encourage and require leaders to promote long-term sustainability that doesn’t rely on the individual leader, but rather on systems. In addition to good succession planning, companies should ensure new leaders are onboarded to established systems. This design promotes stability. While every leader has their own leadership style, they should not disrupt established business systems until the team and leader, together, have proven a better way based on controlled experiments. New systems are communicated. Work instructions are updated and teams are trained in the new way of doing things. Let’s work together to keep the airplane on course no matter who is in the pilots seat! ✈️ #lean #findleansolutions #stability #leadership