The C-suite has become the hot seat. With CEOs under enormous pressure to deliver the outstanding performance investors demand--and to satisfy other, often conflicting constituencies--it is no wonder that the pace of CEO turnover is accelerating. The latest Booz Allen Hamilton CEO succession study found that 15.3% of CEOs worldwide and 16.2% in North America left office in 2005. That's an increase since 1995 of 70% globally and 54% in North America. What's more, a third of the departures in the most recent survey were "nonroutine"--that is, they occurred before the scheduled succession date, usually because of performance problems.
Typically, the early departure of a CEO leads to the recruitment of someone thought to be better equipped to fix what the last CEO couldn't, or wouldn't. The new leader arrives with a mandate to change course or, in the most extreme circumstances, to save a sinking ship. The board places its confidence in him because of the present dilemma's similarity to some previous challenge he dealt with successfully, such as reshuffling a portfolio, slashing costs, increasing market share, or negotiating with regulators.
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