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 Boardsource.com.
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:
Just remember: the devil is in the details — which is why you should contact IntoGreat Management Partners.