How Long is a Leader a Leader?

January 23, 2012 at 7:27 pm

There has been so much discussion lately about the merits (or lack thereof) of term limits for board directors. The argument goes as follows; boards become stagnant, colloquial and non-independent after too much time together. On the other hand there is a great value at having experienced directors who understand the company they are involved with and are familiar with the other members they serve with. Thus, the perfect amount of time to serve is a fine balance between familiarity and exposure as compared to being a neophyte.

The same underlying tendencies and dynamics can certainly hold true for CEOs and in fact, leadership of a variety of sorts. How long can any leader be expected to innovate and make astonishing new contributions? I began asking this question in response to the unfolding CEO predicament at Research In Motion (RIM) that finally resulted in the announcement of the resignation of co-CEO’s Jim Balsillie and Mike Lazaridis yesterday. Lazaridis founded the company in 1984 and Balsillie joined him in leading it in 1992. That is a long-time steering a ship trough the turbulent and ever-transforming world of communications and technology.

In the preeminent work on the topic of leadership tenure Donald Hambrick and Gregory Fukotomi of Columbia University described discernable phases, or seasons as they called it, of an executive’s tenure in the job. They describe the following 5 seasons: (a) response to mandate, (b) experimentation, (c) selection of an enduring theme, (d) convergence, and (e) dysfunction.

The convergence phase is characterized by an ingrained strategy largely because what has worked in the past is still assumed to be the way forward. Convergence will lead to dysfunction if drastic changes are not made and this is what is currently transacting at RIM. While the board has replaced the Co-CEO’s the big question in the markets today is whether the replacement, Thorstein Heins, has the breadth of experience to take the company back to the season of experimentation in order to test new ideas and strategies. In general I am a huge proponent of promoting from within but in the case of RIM it might have been wise to inject some new blood into this scenario.


Entry filed under: Business, Uncategorized.

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