The Telegraph
Tuesday , July 20 , 2010
Since 1st March, 1999
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Tied to the chair
Illustration: Uday Deb

Job hopping at a junior level is something almost everybody does. You will find lots of literature on it too, particularly these days when you find two contradictory trends of both pink slips and new opportunities.

At the top level, however, there is very little that has been said. Many of the traditional reasons don’t apply. For instance, “To escape poor leadership” is often cited as one of the most important reasons for switching jobs. If you are the CEO, you can hardly say that; you’re the boss and can’t blame a nebulous chairman or the board of directors.

This is why a CEO changing jobs has acquired an unhealthy odour. It is generally considered an admission of failure; the man in the hot seat found his swivel chair too hot for him. He was booted out by an unusually active board.

According to a study by, 31 per cent of CEOs get fired for mismanaging change; 28 per cent for ignoring customers; 27 per cent for tolerating low performers; 23 per cent for denying reality; and 22 per cent for too much talk and not enough action.

Fortune magazine has another set of reasons. Failed CEOs, it says, could be guilty of one or more of the following sins: people problems; decision gridlock; bad earning news; missing in action; and off-the-deep-end financials. “When a CEO really goes down in flames, there is always more than one reason,” says management thinker Ram Charan.

If truth be told, there is really one reason: you have snarled up your relations with your board, the only people who matter in the selection and retention of the CEO. Technically, this is done by the shareholders. But they are essentially rubber stamps. Shareholders are powerless, particularly in the Indian context. How often has it happened that a company has changed its registered office and moved its annual general meeting to some obscure spot to avoid embarrassing questions?

In very many cases in India, the CEO is actually the largest shareholder, so the question of removing him doesn’t arise. In the US, even when Indian entrepreneurs provide both the money and technological expertise to set up a company (particularly in new economy areas), they appoint an American as CEO. This is not being democratic, just pragmatic. The CEO is supposed to sell the company — to customers, the government, the media and investors. A WASP will generally do a better job than an ABCD. (For those who don’t mind being politically incorrect, the expressions stand for Western Anglo-Saxon Protestant and America Born Confused Desi.)

So should CEOs never hop jobs? There are certain circumstances in which you can do so without leaving a blot on your career. First is when you are a professional in a family-managed business and you discover that the owner doesn’t have a sense of ethics. You can go to town with the information (everybody knows it anyway). But that could achieve nothing. Getting out may be the only option.

The second situation is when you are the CEO of a small company looking for higher things. You can either grow your company or grow yourself. Moving to a bigger company as CEO is an option. Maintain your relations with your former colleagues, however.

There is another reason sometimes cited by management pundits: to gain industry exposure. The CEO who moves from an auto manufacturer to a fast-moving consumer goods company may excite some wonder. People will watch how he manages to sell soap instead of sedans. But he is not going to come down in their estimation unless he falls flat on his face.

That is one thing that no CEO can afford to do: show that he is incapable of doing his job. Such a mistake means that he must join the ranks of advisors and not leaders. Why do you think there are so many management consultants and academics around?


The main reasons for hopping jobs (%)

• Downsizing or restructuring in the company 54

• For new challenges 30

• To escape poor leadership 25

• Poor relationship with a manager 22

• For improved work / life balance 21

• Contributions to the company not valued 21

• For better compensation and benefits 18

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