One reason CEO turnover is so high: The job is rarely all it's cracked up to be, according to a recent episode of McKinsey & Co.'s podcast, "Inside the Strategy Room."
The January episode features Carolyn Dewar, co-lead of McKinsey's CEO Excellence practice, and Vik Malhotra, former chair of its Americas region. The two are also co-authors of the book "CEO Excellence" with Scott Keller, for which they interviewed 67 "outstanding" CEOs.
Many CEOs they spoke with said they could have performed better their first year if they managed their time and energy differently. They were taken aback by the role's high demand and specifically struggled to engage the board and connect with stakeholders, which can be hard to understand how to do well until you're in the role, Mr. Malhotra said.
More than two-thirds of interviewees said they were unprepared to be CEO, Ms. Dewar added. Even after leading large operations in the past, the CEO role brought unexpected challenges.
"The buzz of the honeymoon period wears off quickly, so if your motivation was to get the CEO job, not to have the job for an extended time, know that the buzz will wane," Ms. Dewar said. "It's truth serum time: 'Do I want the job because I want to be picked and that will be validating for me?'"
The expectations, scrutiny and loneliness hit hard, Ms. Dewar said, noting that 30% of CEOs don't make it past their third year. She called for organizations to better prepare incoming leaders for their new reality — and to start doing so a few years out.
She also offered four "key dimensions" of preparation that can help ease a future CEO's transition into the role:
1. Assess your motivations and expectations: Do you fully understand all aspects of the role, including its impact on your family, and if so, do you still want it?
2. Expand your perspective on your company and industry: Excellence in your previous role is rarely enough.
3. Round out your profile "with humility": Objectively assess your own capabilities and seek outside feedback to understand how you can grow into the company's vision.
4. Understand the selection process: Don't shy away out of fear you'll offend the current board and CEO with new ideas. Present a clear, bold vision, and practice answering questions personally and authentically.
Listen to the full episode here.