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When CEOs Step Up to Fail
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This is an MIT Sloan Management Review article. In recent years, leaders at such high-profile companies as Xerox, Procter & Gamble, Lucent, Coca-Cola, and Mattel have flamed out early in their tenures. Why did such promising and previously successful individuals fail so quickly in the CEO role? And why is such failure happening today with relatively high frequency? The individuals in charge bear some of the responsibility, of course. But the authors' research also uncovers other major forces at play. First is the impact of the predecessor CEO's actions on his or her successor's performance. Although outgoing CEOs do not intend to contribute to the failure of their successors, their personal needs and actions can lay the groundwork for derailment. A second force is often the succession process itself. The outgoing CEO may be responsible, having failed to prepare a successor adequately; and the board is also often guilty of lack of oversight. Third, new CEOs often have narrow expertise and are unable to set a proper context as leaders. The authors explore these issues and offer advice to outgoing CEOs, directors, and incoming leaders that may help them avoid the troubles that some companies have faced in making a leadership transition.