And, by the way, retention packages run out and it amazes me that firms often have no plan for when they do and then are surprised that the folks that were only hanging on until they received the related benefit leave.
5. Having no trained replacement
I get why this happens with CEO hired guns but not why it also happens with founders. With hired guns they are simply there to do a job and it is up to the board to assure succession. With boards generally focused either tactically or on the annual party the board meeting has become they shouldn’t be a surprise they don’t have their act together when a CEO leaves. However, founders and those that just painstakingly turned a company around actually care that the firm survives them.
Despite this, I could count on one hand with most fingers left over, the number of CEOs I’ve seen mentor a replacement. The CEOs are paid millions supposedly because they are so unique, yet they seem to act like another warm body could easily do their job even though everything we see suggests that isn’t at all the case.
Even suggesting they mentor someone will often be met with looks suggesting the idea is a foolish one. But yet, having met with many of these folks after they’ve stepped down, not doing so is noted as one of their biggest regrets largely because the firm they once nurtured is on life support.
Darwin award for companies that repeat mistakes over and over, and over…
I often wonder if there is a Darwin award for companies as I’ve seen so many repeating these same five major mistakes. Misusing compensation, not understanding how salespeople work and think, not having a clue or protecting their critical corporate assets, and not prioritizing a plan that will assure their firm survives them (this last is a problem shared with boards). I’d suggest a class, but I’d want to title it in a way that the folks I’d want to attend would likely think was derogatory.
In any case, I hope my list of five ways a CEO can kill a company gives you some insight into firms that you might want to avoid working for, buying from or investing in.
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