In today’s dynamic business landscape, the pivotal role of leadership in steering an organisation towards unprecedented success is more evident than ever. The latest Leadership Capital report from The LCap Group sheds light on the pivotal role of leadership in driving business success.
Key Leadership Changes
At the heart of these insights is the transformative power of strong CEOs. These individuals are not just leaders but change agents, sparking positive shifts within the senior leadership team. An early change at the CEO level often leads to further modifications within the SLT, emphasising the importance of surrounding oneself with the right mix of experience and competencies.
The frequency of CFO changes is also interesting to note, with almost two-thirds of businesses altering this role during their hold period. Top performers tend to replace their CFOs earlier and more frequently, highlighting the strategic importance of financial leadership in driving growth and value creation.
Leadership change is a common denominator among top-performing companies, with a staggering 98% of them making at least one change. These upper quartile businesses not only embrace change but do so proactively, ensuring they have the right leadership team in place from the outset.
Moreover, the focus of these top performers extends beyond internal leadership dynamics to include commercial and external-facing roles. The presence of a Chief Marketing Officer on the senior leadership team, for example, is a distinctive trait of the most successful businesses, underscoring the value they place on strategic, commercial, and marketing leadership.
Timing the Changes
However, the timing of leadership changes is also a critical factor. Late changes, especially in key positions like CEO and CFO, are often indicative of poorer performance, suggesting a loss of direction and a reactive approach to leadership challenges. In contrast, early changes, particularly in the CTO role, enable businesses to leverage technology effectively, contributing to sustained year-on-year growth.
The report also highlights the nuanced approach top performers take towards hiring, prioritising situational experience over domain knowledge. This strategy allows these companies to navigate the complexities of the value creation journey more effectively, distinguishing them from their less successful counterparts.
Interestingly, the role of the Chair is often overlooked, with changes skewed towards the early stages of the hold period. This raises questions about the strategic focus of firms, particularly in the later stages of their development.
Interested to find our more?
The Leadership Capital report from The LCap group, offers invaluable insights and hard-hitting facts and figures into the pivotal role of leadership in shaping the success of businesses. To delve deeper into these insights request your own copy of the report here>>
And if you’re interested to explore how these learnings can be applied to your organisation, get in touch with a member of our team today >>
