Pick A CEO Who Truly Fits The Company

"Turnover of chief executive officers--a prime indicator of wrong leadership--was 50% higher coming into this recession than at the start of the previous one, in 2001. Several statistics cited in the new book The Right Leader: Selecting Executives Who Fit (co-written by one of the authors of this article) likewise indicate that as we entered the current recession, more and more companies were discovering that they didn't have the right leaders to guide them through normal economic conditions, let alone those we face today. Among them: Some 40% of new CEOs are fired, or 'retired,' within their first 18 months, and 64% of them never make it to their fourth anniversary on the job. The average cost of replacing a CEO after 18 months ranges from $12 million for small-cap firms to $52 million for large ones. And not having the right leaders costs American industry an estimated $14 billion a year, not even counting the price to shareholders in lost market capitalization and increased stock volatility, and to businesses themselves in being left demoralized, floundering and ripe for the picking."