Bad bosses don't get the boot

New research shows that top bosses very rarely get the sack, and hardly ever as a result of poor performance...

Last Updated: 06 Nov 2012

The survey from management consultant Booz & Company covers the world’s largest 2,500 companies over the last decade. In all that time, only 2.1% of bosses were dismissed annually for poor performance. So much for the ruthless glare of shareholder scrutiny that we are all supposed to live in these days.

Here at MT we are nothing if not fair minded, so the first thought that sprang to mind is that perhaps all those bosses are doing such a good job that they wouldn’t get fired for slacking. But even when the data is reduced to those companies in the bottom 10% of shareholder return values, bosses still face a less than 6% chance of being given the boot because of this. One rule for them, and one for us? Maybe; it’s certainly unlikely that attempts to use these figures in your own defence at appraisal time will do you any good at all.

It also emerges that the USA, far from being the toughest environment for bosses to be in, is one of the most benign, with CEO tenure averaging 8.3 years in 2007, and a whopping 9.4 years over the full decade of the survey. The 10 year average for CEOs in Europe is a mere 6.6 years by comparison. Maybe those US firms are onto something though – it takes time for even the greatest strategy to bear fruit.

The last myth to be busted by the big-brains at Booz is the idea that outsiders make better bosses than company lifers. In the UK’s top 300 companies, CEOs brought in from outside were twice as likely to face ‘forced succession’ (ie the bullet) as those promoted from within.

Of course, this could be down to the simple fact that company veterans know the politics and power games more intimately than those poor innocents from the world beyond reception. There’s nothing like knowing where the bodies are buried for keeping people on your side…

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