I read a great many CEO CVs. Increasingly, I find myself wondering whatever happened to the chief executive who joined a good business, stayed for ten or fifteen years and made it considerably better.
So many executive careers now seem to be presented as a succession of impressive turnarounds. A struggling business acquired by private equity, a new CEO appointed, costs reduced, operations restructured, EBITDA improved and, three or four years later, a successful exit.
Then on to the next one.
These are often substantial achievements, and I don’t wish to diminish them. Turning around a failing business requires considerable skill, courage and determination. There are some exceptionally capable executives who have built successful careers doing precisely that.
But I do wonder whether we have become rather too impressed by this particular model of leadership.
When did fixing something that was broken become more celebrated than building something that was already good?
The attraction of the turnaround
Part of the answer, I suspect, is that turnarounds make compelling stories.
A CEO inherits a business in difficulty. They identify the problems, make some difficult decisions, change the management team, improve financial performance and ultimately create significant shareholder value.
There is a clear beginning, a period of decisive action and a measurable outcome. It makes for an impressive CV.
Private equity has undoubtedly influenced this. Its investment model generally works to a defined timescale, with value creation and an eventual exit as central objectives. Executives are understandably measured against these outcomes.
And there are some very talented leaders operating in that environment.
But the language of executive achievement has become increasingly dominated by transformation, restructuring, accelerated growth, EBITDA improvement and successful exits.
I’m not convinced these are always the best measures of leadership.
There is also the question of context. Improving profitability in a poorly managed business may involve addressing problems that have developed over several years. That can require difficult decisions, but the opportunities for improvement may be relatively obvious.
Taking an already well-managed, profitable business and making it substantially better presents a different challenge.
There may be no obvious inefficiencies to eliminate, no failing management team to replace and no immediate crisis around which to unite the organisation.
Improvement has to come from somewhere else.
What about the business that wasn’t broken?
Consider a different CEO.
They join an established, profitable business with a good reputation, loyal customers and a capable management team.
There is no immediate crisis. No urgent requirement to restructure. No burning platform demanding dramatic intervention.
Over the following ten years, they build on what is already there.
They develop the next generation of leaders, strengthen the organisation, improve decision-making and identify opportunities for growth. They invest in people, customers and the business itself.
Some years are better than others. There are setbacks, difficult decisions and periods when the market is less accommodating. But the business continues to develop.
Perhaps turnover doubles, profitability improves and the organisation becomes stronger and more resilient.
Just as importantly, the business retains the qualities that made it successful in the first place.
Is that not an equally impressive achievement?
I would argue that, in some circumstances, it is considerably more demanding.
There is a particular skill in recognising what needs to change without feeling compelled to change everything. In knowing when to intervene and when to leave good people to get on with their jobs.
And in having the patience to build something over time.
An incoming CEO may feel an understandable pressure to demonstrate their value. Shareholders, the board and employees are watching, and there is an expectation that a new leader will bring fresh thinking and make a difference.
Sometimes the most valuable early decision is to resist that pressure.
To spend time understanding why a business works, who makes it work and which aspects of its success might be put at risk by unnecessary intervention.
This isn’t an argument for standing still. Successful businesses can become complacent, and markets rarely allow organisations to remain unchanged indefinitely.
But there is an important difference between making changes because they are necessary and making changes because a new CEO feels the need to establish their authority.
Have we confused activity with leadership?
I sometimes wonder whether we place too much value on visible intervention.
A newly appointed CEO who announces a restructuring, replaces several senior executives and introduces a new operating model is clearly doing something. Their impact is immediate and relatively easy to identify.
A CEO who spends time understanding the business, listening to its people, developing relationships and gradually improving performance may appear rather less dynamic.
Yet their judgement may be every bit as good, perhaps better.
We seem to have developed an expectation that leadership should be demonstrated through action, preferably action that is both significant and measurable.
The first hundred days have become particularly important. New CEOs are encouraged to establish momentum, communicate their priorities and demonstrate early results.
There is merit in that. A CEO who avoids decisions or fails to establish direction can quickly lose credibility.
But perhaps we have become too focused on the speed with which someone makes an impact, rather than the quality and durability of that impact.
Some decisions produce immediate financial benefits while creating problems that only become apparent several years later. Others require investment, patience and a willingness to accept that the benefits may not be fully realised during the CEO’s tenure.
Developing people is a good example.
Building a genuinely capable leadership team takes time. It involves coaching, delegation, allowing people to make mistakes and gradually increasing their responsibilities.
The results may be substantial, but they are rarely dramatic.
One of the ironies of effective leadership is that the better a CEO becomes at developing and empowering others, the harder it can be to attribute success directly to them.
Their achievements become those of the organisation rather than the individual.
Surely that is something we should be encouraging?
Are we rewarding the wrong things?
There is another aspect to this that I find interesting.
Have we inadvertently created an executive market that rewards people for moving on?
A CEO who delivers a successful turnaround and exit every four or five years can accumulate considerable personal wealth, an impressive CV and a reputation as someone who creates value.
Each successful transaction becomes another achievement, another opportunity and potentially another substantial financial reward.
Compare that with someone who spends fifteen years developing an already successful, privately owned business.
They may have created considerably more value, built a stronger organisation and developed a generation of capable leaders. Yet their achievements are less visible, their career appears less eventful and they may receive comparatively little recognition beyond the business itself.
Indeed, the executive who remains in one organisation for fifteen years can sometimes find themselves having to justify that longevity when they eventually enter the job market.
Have they become too comfortable? Are they sufficiently adaptable? Can they succeed somewhere else?
Meanwhile, someone who has moved between four businesses in the same period may be praised for their breadth of experience and ability to deliver change.
There is something rather curious about that.
Fifteen years in one business can be treated as a potential weakness, while four businesses in fifteen years can be presented as evidence of success.
Of course, the financial rewards available to executives in private equity-backed businesses are not inherently unreasonable. They reflect the ownership model, the risks involved and the outcomes expected.
But incentives influence behaviour.
If the executive market consistently places greater value on short-term transformation and successful exits, we should hardly be surprised when ambitious executives build their careers around those opportunities.
Someone who has spent twenty years moving between businesses, delivering change and preparing for transactions will have developed a particular set of capabilities.
Those capabilities may be highly valuable, but they are not necessarily the same as those required to lead an established business through ten years of steady development.
The question is whether we are rewarding the type of leadership that businesses actually need, or the type of leadership that the executive market has learned to celebrate.
Longevity is not the same as success
Of course, staying in a business for fifteen years doesn’t automatically make someone a good CEO.
There are long-serving executives who become too comfortable, resist necessary change or fail to recognise what is happening around them.
Longevity can reflect loyalty and commitment. It can also reflect a lack of ambition or an unwillingness to challenge established thinking.
Equally, there are turnaround specialists who leave businesses fundamentally stronger than they found them.
I don’t think the distinction is really between short-term and long-term leadership.
It is between improving the numbers and building the capability of a business to continue improving them.
The best CEOs do both.
But when assessing executives, I think we should pay considerably more attention to what they have built, rather than simply what they have changed.
Did they develop people who went on to become successful leaders? Did they establish a business capable of performing without their constant intervention? Did they strengthen its culture and customer relationships?
And perhaps most tellingly, what happened to the business after they left?
A CEO may deliver excellent financial results during their tenure, but if the organisation struggles once they depart, we should question how much of that success was embedded within the business.
By contrast, a CEO who leaves behind a capable successor, an effective management team and a business that continues to prosper has demonstrated something rather important.
They have built an organisation that is not dependent upon them.
To me, that is a considerable achievement.
A particular consideration for family businesses
This distinction becomes especially important in family-owned businesses.
Many of the families we work with are not looking to sell their businesses in three or five years. They are thinking about the rising generation, the continued success of the organisation and their responsibilities to employees and the communities in which they operate.
They are often successful businesses already.
Their challenge is not necessarily to find someone who will transform everything, but someone who can understand what has made the business successful and build upon it.
That requires commercial ambition, certainly. It also requires judgement, humility and respect for what has gone before.
An incoming CEO must be capable of challenging established thinking without assuming that everything established is wrong.
In a family business, there may be practices and relationships that appear unusual to someone arriving from a more corporate environment. Some may genuinely need reviewing. Others may be an important part of why the business has succeeded.
Knowing the difference is critical.
Family shareholders may also measure success differently.
Financial performance matters enormously, but it is seldom the only consideration. Reputation, employee relationships, customer trust, independence and the ability to pass a strong business to the next generation can be equally important.
A CEO who concentrates exclusively on maximising short-term financial performance may therefore be pursuing an objective that is not entirely aligned with that of the owners.
They need to recognise that a family business is more than a financial investment, while understanding that sustainable profitability is essential to its future.
That doesn’t mean a CEO with private equity experience cannot succeed in a family business. Far from it.
Some will bring exactly the commercial discipline, strategic thinking and experience that the business needs.
But it does mean we should understand what really motivates them.
Is it the opportunity to lead and develop a business, or the excitement of the transaction and the next exit?
Neither motivation is inherently wrong. They are simply different, and that difference matters.
Perhaps we need to reconsider what impresses us
As someone involved in advising families on senior leadership appointments, I think our own profession has a part to play.
We encourage candidates to quantify their achievements, demonstrate impact and provide compelling evidence of the value they have created.
Quite rightly. Boards need evidence of what someone has actually achieved.
But perhaps we have allowed the most dramatic achievements to become the most persuasive.
An executive CV is, after all, a carefully constructed account of an individual’s career. It naturally emphasises successes, particularly those that can be expressed in financial terms.
What it tells us less about is the context in which those achievements were delivered.
How much of the improvement came from the CEO’s leadership? How much was already underway? What was the condition of the business when they arrived? And were the results sustainable?
I also think we should become more interested in the less immediately measurable aspects of leadership.
How did the CEO develop their people? How did they handle disagreement? How did they balance the needs of shareholders with those of the business? What did they choose not to change?
A CEO who has doubled EBITDA in three years will understandably attract attention.
I would be just as interested in the CEO who inherited a good business, doubled its size over ten years, developed an excellent leadership team and left it in better shape for the person who followed.
Indeed, depending on the business and its shareholders, I might be more interested.
Perhaps we should be asking candidates fewer questions about what they transformed in their first hundred days, and more about what they built over their first thousand.
There is also a responsibility on boards and shareholders to be clear about the leadership their business actually requires.
Is the organisation genuinely in need of transformation, or does it need someone capable of developing an already successful business?
The best appointment isn’t necessarily the most impressive individual in the room. It is the person whose experience, judgement, motivations and approach are best suited to the business and its future.
For some organisations, that will undoubtedly be an accomplished turnaround specialist.
For others, particularly established family-owned businesses, it may be someone whose greatest strength is the ability to build patiently and consistently upon what is already there.
And perhaps that type of leader deserves rather more recognition than they currently receive.
The real test of leadership isn’t simply what a CEO changes while they are there. It is what they leave behind.
I suspect some of the very best CEOs are still quietly getting on with the job, too busy building successful businesses to be writing impressive CVs.
About the Author
David Twiddle is Managing Partner of TWYD & Co, leadership advisers to families in business. An experienced entrepreneur and head-hunter, David has spent much of his career working with business owners, boards and senior executives. Through TWYD & Co, he advises family-owned businesses on senior appointments, succession and board effectiveness, with a particular interest in the relationship between leadership, ownership and long-term business success.