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Yash Gupta
Business School Dean

Yash Gupta

Yash Gupta is Professor and Dean of The Johns Hopkins Carey Business School.

Changing Times, Changing Leaders

Some CEOs get stale because they begin to recycle the ideas that made them successful in the first place. When they start in the role, they have a good understanding of the environment, the opportunities, and the challenges. But later, as the environment changes, they might be unable to adapt. Just consider the past year. The business environment is vastly different from what it was several years ago. Any CEO who hasn't adjusted to this new landscape, or who isn't suited to handle the changes, is not going to meet with a lot of success.

To stay fresh and current, CEOs must scan the environment at all times. They just can't remain focused on their own companies and their own viewpoints. When they become successful, they must guard against the hazard of overconfidence. Otherwise, they can lose that freshness and that edge they need to continue being competitive and innovative.

Company boards can play an important part in having the right CEO in place for the right amount of time. Board members must always bear in mind why they hired a particular CEO. If the objectives have changed, if the reasons for hiring the CEO no longer apply, then it's probably time for a new chief executive. When you have an entrepreneurial organization, you require a CEO with an entrepreneurial mindset. When it becomes a mature organization, then you need a professional manager to run the operation. The CEO's responsibility can change dramatically as the company itself changes, as in the case of Anne Mulcahy. The skill set that was needed when she took over Xerox is not the same skill set needed now. Board members must stay attuned to these situational shifts.

The board can also insist on bringing a more diverse group of employees to the company - people from all over the world, not just from the same pool of talent. This injects new ideas and new blood into the organization, and in turn it creates a wider pool to choose from when a new CEO is needed. Being able to select a talented successor from within the organization provides a sense of stability and continuity. That's something a company will desire if it has a legacy that it wishes to preserve.

By Yash Gupta

 |  May 26, 2009; 4:06 PM ET
Category:  Succession Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati  
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