Because CEOs perform so many tasks for their company, it is common for them to make some mistakes.
(article continues below)
However, there is a difference between simply making mistakes and not being cut out for the job.
What are CEOs responsible for?
CEOs are expected to perform many duties on a daily basis, including:
- Establishing priorities for capital investment
- Setting strategy that includes buying and selling businesses
- Changing direction in the face of new and strong competition
- Building moral and ethical tone of company
- Driving company growth
- Enhancing profitability
- Maintaining relations with employees, customers, shareholders, stock analysts, congressmen, heads of governments, regulators, union officials, and the media
It is very likely that CEOs will make some mistakes while performing these duties, so don't be so quick to remove them over something minor. It is easy to tell whether these mistakes are worth getting rid of your CEO or not – are the mistakes significantly harming your company? Does the CEO continue to make the same mistakes, without bothering to fix them? If so, finding a replacement may be an option.
Strengths and Weaknesses
Every CEO will have strengths and weaknesses, and it is the board's duty to become aware of them while evaluating performance. Once the board is able to identify the CEOs weaknesses, the CEO should try to fix them instead of completely ignoring them. A CEO who does not make an effort to fix their weaknesses is not worth keeping around.
Stand By Your CEO
If the board gives the CEO a chance to correct their mistakes, they will be able to have a better overall performance. A CEO who works hard to fix their mistakes shows drive and determination, and once the mistakes are fixed, their skills and talents that they bring to the company will become more significant. CEOs are not always available, so finding a new one is extremely time-consuming, not to mention expensive. There is also a chance that the new CEO will demonstrate a worse performance than the previous one. Always try to work with your current CEO before searching for a new one, because one that is willing to work with you will be able to identify and correct their flaws in order to be fit for the job.
When to Give Up
A CEO who is not willing to work and fix their mistakes should automatically be removed – anybody who refuses to work with you should not be working for your company. Leadership, judgment, and character are also essential qualities for any CEO. If the CEO fails to bring any of these qualities to the environment, finding a replacement is the best solution. CEOs must always have these qualities as they hold such an upstanding role, and lacking them will only hurt the company as a whole.