Wall Street Journal Bookshelf, The Evolution of Leadership (reviewing Claudius Hildebrand & Robert Stark, The Life Cycle of a CEO: The Myths and Truths of How Leaders Succeed (2024)):
Chief executives have distinctive life cycles—like butterflies and frogs—and each phase has certain qualities worth identifying and paying attention to. That, at least, is the thesis of The Life Cycle of a CEO: The Myths and Truths of How Leaders Succeed.
Claudius Hildebrand and Robert Stark, both business consultants, base their book on a massive research project they undertook aimed at analyzing the performance of “every twenty-first-century CEO of the S&P 500 throughout the years of their tenure.” They ended up studying more than 2,000 chief executives, tracking their experience over time. The statistics drawn from the study tell a striking story.
I was a skeptic when I first heard about this research. … [Do CEOs] really achieve peak performance in years 10-14? …
Launch. In year one, new CEOs not only enjoy a honeymoon but also pick some low-hanging fruit to improve performance. …
Calibration. In year two—also known as the sophomore slump—73% of the CEOs who had a successful start in year one do worse …
Reinvention. Years three to six are the period during which the early moves of successful CEOs start to kick in, building trust inside and outside the company. …
Complacency trap. Years six to 10 are a time of both celebration and danger. Chief executives begin to believe their own press and find it harder to evaluate the policies that made them successful. …
Legacy. If you survive the complacency trap—many CEOs do not—you are ready to soar in years 10 and beyond. Here’s where the conventional wisdom, which holds that 10 years is the optimum length of CEO tenure, falls most noticeably short. The authors found that 58% of those who made it beyond year 10 beat the S&P 500, a higher percentage than at any other stage. And the results in the legacy years were “also a good deal less volatile than performance in any other stage.”
