Michael Harrison: Limit the pain chief executives should endure

Pity the poor chief executive. Five words that you seldom hear spoken in polite conversation these days, so mistrusted is the corporate world and, by extension, those who run it. But spare a thought for the lot of the CEO, which too often is nasty, brutish and, increasingly, short.

Last week alone, two further scalps were added to the scrapheap of ex-chief executives: Chris Hsu of the software group Micro Focus and Diana Hunter of Conviviality Retail, owner of the Bargain Booze and Wine Rack chains, both of whom parted company with their employers on the same day.

They and their erstwhile counterparts in other quoted companies know there will be more sackings to come, more errant and under-performing chief executives finding that they no longer possess the requisite skill for the job or unexpectedly discovering a desire to pursue other opportunities.

In the past eight years, the life expectancy of the average FTSE CEO has shrunk from 8.3 years to 4.8 years, according to the most recent analysis by PriceWaterhouseCoopers.

The recruitment consultants Korn Ferry calculate, meanwhile, that if you are sat in a CEO’s chair right now you have a 17% chance of being replaced at some point in the next year. How sorry should we feel for these titans of industry brought low by the vicissitudes of modern corporate life and the increasingly precarious nature of survival in the C-suite?

Jack Welch, the legendary boss of General Electric, claimed in his biography Straight from the Gut that being a CEO was “the nuts”, adding for good measure: “You get paid a lot, but the real pay-off is the fun.”

The first half of that sentence is certainly true — pay among FTSE 100 CEOs has increased five-fold since the 1990s. But the bit about it being fun? By the nature of the job, most are lonely and isolated and many, one suspects, are not particularly happy either despite the pecuniary perks of the job.

They are prone to fits of depression, brought on by the pressure and time demands of the job. Within the organisations they command, they have few allies but plenty of rivals, just itching to show they can do the job better. Outside their organisations they have very many advisers but fewer friends. Even when they are off the job it can be lonely.

There are some well-adjusted CEOs who leave the office at 6pm to return to the bosom of their families. But they are outnumbered by those who have little home life because they are permanently on the corporate circuit or their family is hundreds of miles away, or in another country altogether.

There are coping mechanisms available to help handle the stress and demands of the job, especially for those newly-promoted. One is to understand that the transition to being leader is invariably a bigger one than you suspect — any would-be boss who thinks they are ready for the job is probably not.

Another is to appreciate that managing externally is a much bigger and more time-consuming part of the job. A third is to avoid micro-managing. The fewer direct reports, the better. And a fourth is to remain grounded: hubris is one of the biggest killers of CEOs.