CEO evaluation is mission-critical

Posted by on May 16, 2012 in Executive Evaluation, Uncategorized

Boards of directors often agree to spend tremendous resources to find the perfect CEO — and then fail to evaluate their chief executive’s performance.

The neglect can be costly. Think strained working relationships, continually poor job performance and executive turnover. In the last decade, the average term of a CEO has shortened from almost 10 years to a little more than seven years, and about one-third of those exits are because of dismissal, according to a report about CEO evaluation from Oliver Wyman.

Formally evaluating the CEO is mission-critical to his or her success and to the success of the organization. Assessments provide unfortunately rare insight into strengths, weaknesses and overall performance. They also give the board and the CEO a chance to discuss and agree upon the executive’s priorities for the year ahead.

It “helps to ensure that everyone shares common expectations for performance,” notes Joshua Mintz on

The process of CEO evaluation — something we at IntoGreat Management Partners specialize in developing — is almost as important as the evaluation itself. It needs to be handled carefully and deliberately. It should reflect an organization’s unique history and work culture, business objectives and overarching strategy.

The process needs to cover five basic steps:

  • An agreement about why the evaluation is being conducted. Is it solely to set compensation based on the CEO’s past performance, or will is it also designed to be used for professional-development purposes?
  • An agreement about how the evaluation will be conducted. For example, who will be responsible for gathering internal feedback? What is the timeline for the evaluation? How much time will be expected of the CEO and his or her evaluators?
  • An agreement about which aspects of the executive’s performance will be assessed and how they’ll be measured.
  • An agreement about how the results will be shared with the CEO and how the executive and board will work together to develop an action plan for the upcoming year.
  • Just remember: the devil is in the details — which is why you should contact IntoGreat Management Partners.

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