Most Common Reasons Why CEOs Fail– Venture Capital’s Perspective
After quite a bit of discussion was sparked on an earlier blog post in March around the 7 Reasons why early and growth-stage CEOs fail (http://www.bostonsearchgroup.com/blog/7-reasons-ceos-fail/ )in technology-driven innovation-stage companies, we thought we’d get the venture capital perspective. Below are the results. The two biggest reasons behind CEO failure revolved around a CEO’s inability to balance revenues and burn-rate (23%), tied with the CEO’s inability to hire well at the VP level, with repeat VP-level failure/turnover (also ~23%). The balance of forced ranking of CEO failure include categories such as–
- New CEO didn’t integrate with rest of incumbent team
- Business model changed (different horses for different courses)
- Leadership fatigue (plateauing company for too long a period)
- CEO “Peter Principle,” and
- CEO getting sideways with Board of Director(s)/ board chemistry
- Tags: CEO, leadership, Leadership Transition, survey, Venture Capital
Neil Lorenson
wrote on April 29, 2009 at 4:14 pm
Good article which removes some of the mystery behind the pink slips for founder CEOs. What does “getting sideways” mean?
Reading the above reminded me of a related article on how to know that the axe is coming down.
http://smartstartup.typepad.com/my_weblog/2008/01/the-dreaded-lun.html
Venture Capital Survey:Top Reasons CEOs Fail | BSG Blog
wrote on April 30, 2009 at 4:04 pm
[...] Most Common Reasons Why CEOs Fail– Venture Capital’s Perspective [...]
Clark Waterfall
wrote on June 5, 2009 at 11:39 am
“Getting sideways” is a catch-all phrase for either losing trust of the board, not being able to persuade the board that your direction is the right one and never resolving the issue with them, etc.