 Uncovering
the Roots of the Crisis in Leadership
Short-tenured CEOs and a lack of long-term thinking have contributed
to an international leadership crisis, Fred Steingraber, '64,
former chairman and CEO of A.T.
Kearney, told members of the
International
Roundtable at Gleacher Center on February 17.
The leadership crisis extends from the political arena to the
religious community to the corporate boardroom, Steingraber said,
and affects not only in the U.S., but also the United Kingdom,
other European countries, Asia, and Africa. In the business arena,
Steingraber attributed the problem to several causes:
• CEOs now serve only four to five years—not enough
time to develop or revamp a company.
• Due in part to short tenure, today's business leaders
are more focused on short-term performance than on a company's
long-term health.
• Executive compensation plans have become heavily laden
with options, which also pushes executives to focus on short-term
goals. The average CEO in the 1980s made 20 times what an average
employee in his company earned. A couple of years ago, that figure
jumped to 600 times. The rate has fallen in the last couple of
years, but still not to where it was in the 1980s.
• Nearly half of all companies go outside the firm for
new CEOs, yet 40 percent of external CEOs leave within 18 months.
• Only 21 percent of companies have plans to develop internal
CEO candidates.
• The ideal CEO candidate is between 35 and 50 years of
age, but the number of people in this age group is dropping.
Despite all these challenges, Steingraber pointed to today's
GSB students as those who can make a difference in leadership
in the future, noting that the best CEOs have a balance of ambition,
competence and integrity.
—Phil Britt
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