Strong Supply Chains Through Resilient Operations

CHAPTER 4Principle 3: Create Resilient Teams by Leaning into New Ways of Working and the Benefits of Diversity

CEOs Thrive When Their Employees Do

Worried about being seen, the CEO sneaks into a dusty shack on the bad side of town, under a sign reading “Tarot. Palm reading. Astrology.” Inside, an ethereally dressed woman takes the executive's hand and stares into it. Amazingly, she immediately homes in on the executive's biggest issue. She says, “You're wondering if you're going to be fired.”

It wouldn't happen this way, would it? We all want to believe that CEO tenure depends on more than pseudo‐science and intuition. But why do CEOs get fired? Our colleague Alex Liu analyzed CEO departures from 200 companies over two five‐year periods: from 2011 to 2016 and from 2016 to 2021 (see Figure 4.1). The total amount of transitions remained relatively stable at 150 and 155, respectively. But the number of involuntary departures increased from 41 to 52. Furthermore, the involuntary departures triggered by causes other than financial factors increased nearly fivefold.¹

Figure 4.1 Why CEOs get fired

Sources: ASX, Capital IQ, and Kearney analysis.

As Alex wrote, “This suggests that CEOs are becoming increasingly vulnerable to being removed from office for issues such as turning a blind eye to toxic corporate culture or failing to address socially irresponsible behavior among their ...