How to prevent your Star executives leaving
In a tight labour market, CEOs and HR Directors are concerned to retain their good leaders. As an Executive Search firm, we have a magnifying view on why C-suite Executives choose to leave, and what organisations can do to mitigate this.
We analysed our past searches for CEO’s, CFOs, CMOs, CTOs, CCO’s and all other members across the C-suite. Our analysis supports that good executives don’t leave because “a headhunter called me.” If they were happy in their work, they would not go down the path of writing resumes, attending multiple interviews and all the distraction that comes with fitting in psyche tests. Nor are star executives “quietly quitting,” where this buzzword refers to retreating from career or business ambition and not wanting to go above and beyond. Star executives tend to be AAA personalities and they actively seek career challenge.
The Top 3 reasons executives choose to leave
1. The quality of relationship with the CEO, Chair or other Direct manager
Executives don’t leave companies – they leave bosses. This could be the CEO who reflects on a weak relationship with the Chair, or a Chief Marketing Officer that reflects on a weak relationship with their CEO. Executives are conscious not to burn bridges and are unlikely to tell you in the exit interview that they left because of a suboptimal relationship with their boss.
The number one thing that companies can do to retain their executives is to ensure that the direct manager builds a relationship of mutual trust and respect with their employee, and provides positive feedback that they value the employee’s contribution.
2. Career development
C-suite leaders tend to be highly driven, A-type personalities. They thrive on new challenges. There are only so many years that an ambitious executive will be content in their role. While organisations invest considerable thought and resources into career development for junior and mid-level managers, they run out of ideas for their C-suite. Somewhere along the way, the company throws in an executive course, perhaps at Stanford or Harvard. There’s nothing a C-suite executive loves more than doing that residential course at Stanford or Harvard. It’s going to look great on next year’s resume….
Organisations should think harder about how to provide their C-suite executives with broader general management challenges. This isn’t about giving your CMO the extra responsibility of Corporate Affairs, or giving your Supply Chain Manager the facility in Papua New Guinea. These ideas give them more work but keep them in their functional domain without addressing their core need for general management growth. Could your ambitious CMO or CFO run Sales? Or New Zealand? If they want the CEO role as their next step, and they have potential, then organisations should think harder about how to develop them as broader general management executives.
3. Relentless change and Burn out
We’re seeing a lot more of this. Organisations hurtle from one big change initiative to the next. First there was that Big Restructure that was on top of the executive’s daily job; then there was a company wide cost out transformation, also on top of the executive’s daily job, and so it goes. There is no time to breathe and get back to ‘normal.’ With each change, the executive loses people resources, cuts budget, and still has to deliver the same (or greater) goals.
Executives need a break from the relentless grind – turning up to the same job, to do the same grind, from the same fish bowl. If the organisation can’t give them a break by putting them into a new role, they’ll find their break externally.
Money is seldom the catalyst for leaving. At the level that Executive Search operates, leaders are highly paid. If the first three reasons are not pressing, then a great remuneration package helps as a retention tool. But if any of the first three reasons are operating, then remuneration, perks, massages, social events and development courses are misplaced as retention tools. There is always an employer out there willing to pay more remuneration, or your executive may even leave for less remuneration.
The morale of the story: stars do not leave because they are headhunted. They leave because they don’t have the right relationship with their boss, are not challenged, or need a stress break.
