Donna Bates The West 190923

Knowing When to Pass the Torch: The Value of Leadership Change

The subject of when a leader should stand away from their post has received increased relevance in the ever-changing world of corporate leadership. Long-serving CEOs and leaders are being re-evaluated in a world where change is constant and adaptation is essential. In this post, we will look at the importance of timely leadership transition and how it may help organizations develop and succeed. We will also draw on the knowledge of Donna Bates, an integrity expert and business consultant who knows the vital role that leadership changes play in an organization’s journey to excellence.

The Paradox of Longevity: When is Long, Too Long?

Fiona Hick – Former CEO, Fortescue Metals
Fiona Hick – Former CEO, Fortescue Metals (Source: West Australian Newspapers: Fiona Hick Credit: FRANCES ANDRIJICH/Supplied)

Long-serving CEOs have traditionally been lauded for their stability, richness of organizational expertise, and experience. The dynamic nature of today’s economic environment, on the other hand, needs leaders who can adapt quickly to change. In 2023, prominent politicians such as New Zealand Prime Minister Jacinda Ardern and Western Australia Premier Mark McGowan willingly resigned from their offices owing to pandemic-related tiredness. Their actions, made when they were still at the pinnacle of their political careers, highlighted the topic of when it is appropriate to step down from positions of leadership.

CEO exits in business range from sudden departures to lengthy farewells. Alan Joyce, the former CEO of Qantas, stuck to his post despite the company’s declining performance, resulting in a ruined reputation. Fiona Hick’s unexpected departure as CEO of Fortescue Metals Group, on the other hand, underscored the necessity of open communication between executives and their boards. These instances show how the timing of a leadership transition may have a substantial influence on an organization’s trajectory.

Some CEOs in sports appear to keep their roles permanently, despite diminishing team performance. Trevor Nisbett, the West Coast Eagles’ long-serving CEO, has persevered despite recent hardships, announcing his retirement more than a year in advance. This raises concerns regarding the influence of long leadership tenures on organizational growth and change adaption.

The Perils of Prolonged Leadership

Trevor Nisbett – CEO, West Coast Eagles Football Club
Trevor Nisbett – CEO, West Coast Eagles Football Club (Source: West Australian Newspapers: Trevor Nisbett has announced he will step down as West Coast CEO when his contract expires in 2024. (Richard Wainwright/AAP PHOTOS) Credit: AAP

Leaders who remain in their positions for a lengthy period of time may unwittingly impede an organization’s success. Lack of accountability and unrestrained authority may lead to poor decision-making, ethical errors, and business scandals over time. The longer a leader continues in a position, the less institutional checks and balances are in place, leading to a culture of rubber stamping.

Furthermore, long-term CEOs may deter innovative and ambitious individuals from entering the organization, resulting in a leadership pipeline bottleneck. Stagnation of innovation can occur when the CEO rejects required changes or fails to recognize the need for change, thereby limiting the growth of the organization.

The Right Time for a CEO to Exit

two white male hands holding a batton

Determining the appropriate moment for a CEO to step down is a highly personal decision impacted by personal, professional, and business objectives. A leader with integrity will, ideally, commit to the post, strive towards predetermined results, and recognize when it is time to transfer the torch to a worthy successor. Succession planning is critical for enabling a seamless transfer and allowing the organization to continue on its path to success.

Finally, understanding when to undertake leadership change is an essential component of good leadership. Long-serving leaders must be cognizant of the dangers of remaining in power for too long. Accepting change at the appropriate moment may result in organizational regeneration, innovation, and development. Donna Bates, a business consultant and integrity specialist, knows the importance of leadership transitions in establishing integrity and guaranteeing an organization’s long-term success. In today’s quickly changing corporate environment, her ability to support executives through these transformations is crucial. Organizations may position themselves for continuous development and success by recognizing the significance of leadership change.

CLICK HERE to read the article in The West Australian.

Donna Bates

Donna is a Strategic Planning Consultant, whose talents have been refined over 25+ year corporate career.

She is an Award-winning, Business & Marketing Growth Strategist who specialises in consulting with company's going through growth, change & upheaval.

Being a “legacy leader” she has mentored talented people across a wide spectrum of industries globally, helping them to grow & pivot their businesses, to stay relevant & profitable.

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