What's undermining CEOs?
The role of CEO is now almost impossibly demanding. Long hours, continuous stress, ambiguity and risk in a turbulent environment. Responsibility for company performance, culture, employee wellbeing, shareholder and stakeholder demands. Under the spotlight 24/7. The health of top executives is at stake. It affects organizations, the economy, society and even the planet.
Read our report: The CEO Struggle: The View From the Top.
Naohiro "Nakki" Furuta is CEO and Managing Partner of Amrop Jomon Associates in Japan, and a member of the Amrop Global Board. He is interested in the cumulative effects of pressure. “A CEO needs time to relax or escape.” An overseas business trip once provided temporary relief from offices, computers, and phones. Universal connectivity has cut off that escape route. When a CEO is deprived of downtime, attrition can set in. “Day by day, it's manageable. But over 6 months or a year, it builds and passes a threshold you can’t manage.”
Fredy Hausammann, Managing Partner of Amrop in Switzerland, confirms that a CEO’s struggle is rarely labelled as a health issue. “Usually, it's a 'company crisis: strategy, reputation, the CEO has lost the trust of the organization'. Most have been suffering stress for some time, but it's not yet surfaced as that. By the time they must step down, they will be physically or mentally unwell.”
“Their main focus is on results, on EBITDA and growth, on whether they will be maintained as CEOs,” says Emilie Boullet Lacoste, a Partner with Amrop NESS in France. Under siege, CEOs wall themselves in. “They have difficulty admitting that they don't know.”
Virtual bits and bytes have tangible outcomes. Many organizations have still not fully solved post-COVID hybrid working as they strive to balance employee autonomy with control and cultural bonding. “That clouded environment adds to the plate of CEOs,” notes Sandy McKenzie, a Managing Partner of Amrop UK. “You're dealing with morale issues: big and difficult decisions in large organizations.”
Could you be trapped in a vicious cycle?
In a pressured environment, a CEO can quickly get caught up in a downward spiral.
- External pressures bear down on the firm and the CEO: The CEO must address persistent demands from share- and stakeholders, intense and unpredictable interactions, short-term financial imperatives, fluctuating ESG requirements, and AI ambiguity.
- Corporate systems are complicated and disempowering for the CEO: CEOs face complex, risk-filled decisions, the need to leverage diverse resources and knowledge. Resource constraints and other blocking forces limit the CEO's scope to make changes.
- The CEO is further compromised by his/her entourage: Boards may favor charismatic, autocratic leaders, undermining democratic/collaborative CEOs. An aggressive, short-term, competitive culture means CEOs conceal their difficulties.
- The CEO becomes isolated: A lack of genuine support from boards, C-suite teams and the CEO's own challenge-avoidance all create isolation. A minority of CEOs turn to addictions or other compulsive behaviors.
- Performance degrades, reinforcing the cycle: Burnout erodes the CEO's strategic thinking, creativity and relationships, harming company culture and performance. The organization’s performance and reputation degrade, placing further pressure on the CEO.
“Organizations don’t care enough about the health of their CEOs,” says Joseph Teperman, Managing Partner of Amrop in Brazil. “The CEO is alone and always has been: pressured by the board, the market, employees.” Surely the chair should help? “100%,” says Roland Theuws, Global Leader of Amrop’s Energy and Infrastructure practice. “But those are the same people that can kick you out.” The CEO must take the risk of opening up, “It’s part of the job. So, it must be clear from the beginning that the dialogue is there.”
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Read our full report: The CEO Struggle: The View From the Top