2024 is on track to record the highest number of CEO departures, according to data from Challenger, Gray & Christmas, since the firm started tracking executive turnover in 2010. CEOs leaving publicly traded companies made headlines throughout the year, including Intel's (INTC) Pat Gelsinger, Starbucks's (SBUX) Laxman Narasimhan, Nike's (NKE) John Donahoe, and more.
Harvard Business School executive fellow Bill George, who is also the former CEO of Medtronic, joins Seana Smith and Brian Sozzi on Catalysts to discuss what the record-high CEO turnover signals about the market.
"The irony is that the economy is very strong right now, and I think boards of directors are really triggered [by] shareholder pressures, [like] a missed quarter [or] a difficult time," George says, adding that he thinks many of the big names that were ousted due to failed turnarounds were not given enough time to succeed.
George adds, "A good CEO today not only has to know how to run the business internally, make the numbers, build a very strong organization behind him or her, but I think they also have to be keenly attuned to external events." He explains, "This is where many of them are not prepared for what's coming at them."
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"It's not just that you have a five-year plan like we used to have, and you stay the course. You really have to be very adaptive to what's coming in your marketplace with your customers and to external events. That is the key, and that's where I see many CEOs falling short; they aren't able to adapt rapidly to those external factors coming at them."
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This post was written by Naomi Buchanan.