For a variety of reasons, turnover on the part of U.S. CEOs continues unabated. According to Challenger, Gray & Christmas, Inc., a global outplacement/coaching organization, 888 CEOs departed American companies in the first eight months of 2021, just nine fewer than over the same period in 2020.
The exodus was particularly pronounced in August, as 118 vacated their posts, nine more than had been the case 12 months earlier. Andrew Challenger, senior vice president of Challenger, Gray and Christmas, told Consulting magazine that many factors are contributing to these transitions, not the least of which is that companies are “poaching” from one another.
He added that enterprises are also looking to hire leaders who have a firm understanding of the factors leading to the talent shortage that exists at many companies at present, and how to rectify it. The bottom line, Challenger told Consulting, is that new CEOs will be asked to “recreate the workplace for a COVID world and beyond.”
Certainly there is an eagerness to take on new responsibilities on the part of some CEOs, Amazon’s Jeff Bezos foremost among them, has led them in different directions. Moreover, many CEOs have reached retirement age, as reflected in the fact that the average age of those in such positions dropped from 59 in 2018 to 58 in 2019.
Before the pandemic, economic factors and questions about CEOs’ adaptability, especially in the tech sector, were mentioned as factors contributing to this migration. But whatever the case, it is unquestionably an ongoing trend. In 2019 alone, a record 1,640 CEOs departed their posts, which includes 172 in October, an all-time monthly high that was surpassed when 219 CEOs stepped down in January 2020. This proved a portent of things to come, as such C-suite luminaries as Disney’s Bob Iger, Hulu’s Randy Freer and IBM’s Ginni Rometty also departed in the first half of 2020.
Certainly, CEO transitions can be delicate, as was apparent when one occurred at Netflix in 1999. That’s when Reed Hastings approached Marc Randolph, the company’s CEO and the man with whom he had co-founded the organization two years earlier, and asked him to step aside so that Hastings himself could take over.
Randolph would later tell Entrepreneur.com that it was “incredibly painful and disappointing,” but admitted to NPR in 2019 that the transition was “in many ways … the start of a renaissance at Netflix.” The company, which once rented DVDs through the mail, transitioned over time to streaming and production and is now worth over $240 billion, and has 200 million subscribers worldwide. Randolph remained as the president at Netflix through 2003. He now mentors founders of early stage companies.
The point, again, is that these transitions occur for any number of reasons. CEOs must not only be alert to new opportunities, but also aware of their own strengths and weaknesses. A guy like Randolph had to do a brutal self-assessment and understand what was best for him and his company. Others have and will do the same, as this great CEO migration continues.