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CEOs Head for the Exits Amid a Changing Workplace Landscape

As the world emerges from the pandemic, CEO turnover is on the rise.

​Dan Springer went on CNBC in June to explain how he was going to turn around DocuSign following a disappointing earnings report that sent the company's stock into a tailspin. Eleven days later, he was out of a job.

DocuSign, the San Francisco-based software company that allows people to sign documents electronically instead of using pen and paper, had initially thrived during the pandemic when in-person interaction was discouraged. But the business's growth rate slowed as people once again become more comfortable interacting face to face.

Springer concedes that it may look as if he was pushed out. The truth, he says, is more complicated. Springer says he told DocuSign's board of directors last year that he wanted to leave, and the company had quietly searched for a successor since January, without success. Springer says the board chair, Maggie Wilderotter, decided it would be better if he left. "She wanted to send a message that we aren't dawdling—we are moving ahead," Springer says.

Springer admits he didn't want to leave DocuSign at that time, but he eventually agreed to resign. "It wasn't the decision I would make for the company," he says. "That's why you [as a CEO] have to have people around you that you trust and then you say, 'OK, if that's what you guys feel, I'll get on that bus and be supportive of that.' "

Rising Departures

DocuSign, which declined comment, certainly isn't the only pandemic darling that fell on hard times and switched leaders. Earlier this year, Peloton Interactive announced that Barry McCarthy would replace co-founder John Foley as CEO. Foley was named executive chairman but resigned from that role in early September as part of a big executive shakeup. Peloton's stock had collapsed by more than 90 percent by mid-September from its January 2021 record price of $167.42 per share, and has sagged more than 70 percent this year.

Overall, CEO turnover is rising as the world emerges from the pandemic. A total of 832 CEOs departed their posts through July of this year, the highest total for the first seven months of a year since 2019, according to Chicago-based outplacement firm Challenger, Gray & Christmas. The 2022 departure totals are up 8 percent from the 770 CEO exits announced through July of last year.

Turnover at the top is affecting organizations ranging from small family businesses to Fortune 500 behemoths. Starbucks, Gap, Pinterest, Under Armour and Southwest Airlines have all seen their CEOs leave this year.

Some transitions appeared to go smoothly. For example, the longtime CEO of Southwest was succeeded by a company veteran. Other changes have proved bumpier. Gap, which was already facing shrinking sales and excess inventory before the pandemic, is searching for a permanent replacement for the departed leader who was attempting to reverse its fortunes.

"Companies are starting to get a grasp on what the world is going to look like post-COVID," says Andy Challenger, senior vice president at Challenger, Gray & Christmas. "They're starting to get a touch of clarity that allows them to make decisions around bringing in new leaders."

Challenger also attributes part of the increase to CEOs who had been wanting to leave their positions but delayed those plans to navigate the COVID-19 crisis at their boards' request. And like many other employees who have joined the Great Resignation, some CEOs are burned out or re-examining their lives post-pandemic.

22-1696 ATW 9-24 CEO Turnover_Graphic_560x666.png

COVID-19 Fatigue

Springer says that even though DocuSign flourished during the early days of the pandemic, working there at the time was very difficult.

"It was incredibly challenging to meet the demand," says Springer, who adds that employees felt the stress of scrambling to meet customers' increased expectations while dealing with their personal circumstances.

"Like a lot of people, I was also tired," Springer says. He recalled thinking that it might be time for new blood at DocuSign. On Thursday, DocuSign announced the appointment of former Google executive Allan Thygesen as its new CEO.

More than three-quarters of C-suite executives (76 percent) say the pandemic negatively affected their well-being, and 69 percent say they are considering quitting for a job that better supports their health, according to a study released this year by Deloitte, a global consulting firm, and Workplace Intelligence, a Boston-based research firm.

'Companies are starting to get a grasp on what the world is going to look like post-COVID. They’re starting to get a touch of clarity that allows them to make decisions around bringing in new leaders.'
Andy Challenger
The road for CEOs doesn't look much smoother in the post-pandemic world. CEOs are facing high inflation, a possible recession and a restless and empowered workforce in which many employees are unionizing, quitting or pushing back against long hours and in-person work. That's on top of the demands unique to their companies and industries.

CEO turnover is likely to remain high if the economy weakens and the country dips into a recession. "We tend to see a lot of turnover at the top and bottom of business cycles," Challenger says.

More Complex, More Difficult

The mounting challenges facing CEOs transcend the current environment because the position has fundamentally changed.

"The role of the CEO is more complex now and more difficult now than at any point in corporate history," says John-Paul Pape, global practice lead for CEO transformation at Accenture, a global consulting firm.

A decade or so ago, CEOs were mainly expected to run the company smoothly and reward investors and shareholders with healthy profits. That's still part of the job, of course. But beyond that, CEOs are now measured by the diversity of their workforces, their companies' stances on political and social issues, their efforts to end climate change and their support for charitable endeavors.

CEOs are also beholden to a new cadre of constituents, including employees, suppliers, customers and local communities. Technology is rapidly transforming, and leaders are grappling with how the metaverse and artificial intelligence will fit into their companies' future. And not only must CEOs have business smarts and savvy, but they also need emotional intelligence and empathy, too.

Of course, CEOS earn generous compensation and other perks, though that may no longer be enough to keep them in such roles. "One CEO said to me, 'I just didn't sign up for this,' " Pape says. He adds that many of these executives spent 30 years getting to the top only to find that "it's a different world and a different time."


Research by consulting firm Korn Ferry shows that the highest-ranked companies in terms of overall effectiveness have CEOs and senior leaders with the following qualities:

1. Tolerance of ambiguity
2. Adaptability
3. Risk taking
4. Independence
5. Openness to differences
6. Trust
7. Power to make an impact
8. Curiosity
9. Builds effective teams
10. Engages and inspires

Who's Next?

When looking for CEOs a decade ago, boards were typically seeking individuals who fit into one of two categories: someone who could maintain the business or someone who could reinvent it for the future, says Tierney Remick, co-leader of the global board and CEO practice at Korn Ferry, a Los Angeles-based consulting firm. Now, Remick says, they must do both.

"Not everybody's trained to do both," Remick says. "But it's an ability you need. You have to run the business for today while consistently thinking about how to evolve as the market changes."

That may not be easy to find. Some companies that announced CEO departures haven't decided on permanent replacements. And in some cases, the new leaders will face an especially difficult task.

For example, just as COVID-19 was hitting in 2020, Gap elevated veteran executive Sonia Syngal to the top spot to revitalize the San Francisco-based retailer. Since then, the company has reported disappointing sales, earnings and margins, and its stock has lost more than half its value since the beginning of the year. Gap announced Syngal was leaving in July and gave no reason. Gap's executive chairman, Bob Martin, will serve as interim CEO. On a conference call, Martin said the company was seeking a new leader who could take Gap from "defense to offense" and is "a very modern-minded transformative executive."

'The role of the CEO is more complex now and more difficult now than at any point in corporate history.'
John-Paul Pape

Gap isn't the only retailer that needs a new CEO. The sector was especially blighted by COVID-19 and has experienced notable CEO turnover. Julie Wainwright, who founded The RealReal online luxury consignment shop, stepped down as CEO this summer. The company hasn't turned a profit since going public in 2018; its stock was trading at around $2 a share in mid-September, and has never hit the $28.90 a share that it reached on its first day of trading.

Under Armour announced in May that its CEO, Patrik Frisk, would exit the role in June. Stock in the Baltimore-based sportswear maker has fallen 60 percent since the beginning of the year. The chief financial officer will take over the role temporarily and will be considered, along with others, in the search for a successor.


Bill George, former CEO of health care technology company Medtronic and a Harvard Business School professor, has written a series of books on how leaders can find their purpose. His latest is True North: Emerging Leaders Edition (John Wiley & Sons, 2022), which he wrote with Zach Clayton, founder and CEO of Three Ships, a Raleigh, N.C.-based digital marketing agency.

True North offers advice on finding your purpose, along with stories on leadership featuring multiple CEOs, including General Motors' Mary Barra, Microsoft's Satya Nadella and Levi Strauss' Chip Bergh. SHRM's workplace editor, Theresa Agovino, spoke with George about his new book.

Why did you write the book?
There's a major change in leadership from the Baby Boomers to the emerging leaders—Generation X, Millennials and Gen Z—and I think we're going to see a massive change in the way they lead. We've moved away from the kind of all-powerful leader who directs everyone to leaders who are much more like coaches who have a high level of self-awareness and emotional intelligence. A lot of the people in the book are Baby Boomers, but they are forerunners of the new way of leading.
Do you think that being a CEO is harder today than when you were at Medtronic in the 1990s?
Much harder. We had this era of shareholder primacy. CEOs were focused on their quarterly earnings, earnings per share, their stock price and their financials. A lot of them got away with making good financial numbers but left the company not in good straits because they weren't investing for the long run. Today there are multiple stakeholders: employees, customers, suppliers, surrounding community. Meeting the needs of all those stakeholders is much more challenging than getting your stock price up, but it's also much more effective for the long term.

Many of the people you praise in the book are women. Why aren't there more female CEOs?
We push women into staff roles. You could be head of human resources or diversity. You could be head of communications. Why haven't women been given big line [of business] roles? Why haven't they been given a big division to turn around or let them run a major business? Women who are in these roles are performing exceptionally well.

How do you find your North Star?
The first thing is to know yourself, and I know that sounds easy. Most people don't. You come from a life story. You've come from a heritage. You come from parental influences, coaches. You faced really difficult times, which we call crucible. These are very, very formative influences. You have to gain self-awareness, and often you gain that through introspection and honest feedback. You have to go through that process before you understand your purpose, your North Star. It's got to be a deeper purpose than making money, gaining power and getting a title. If your only goal is to get to be CEO, then I don't want to work with you.

What are the qualities a CEO needs now?
They need to know who they are on a deep level and to accept themselves for who they are. They have to have compassion for their own weaknesses. They need to have courage—and courage means being willing to make a decision and go against the grain to put it all out there and maybe lose. They need to have compassion for the people they serve, and they need to have passion for the business. I'm assuming that people are smart, but they don't have to be the smartest person in the room. They can hire smarter people. —T.A.

New Directions, Different Skill Sets

There are many reasons companies choose to bring in outsiders to lead their businesses, Remick says. Sometimes, no existing executive is ready for the post, so the board seeks an outside CEO to prepare the next generation. Another reason is a pivot in the business model.

"It's not necessarily a negative," Remick says.

Pinterest says its new CEO was selected to bolster the company's efforts to make it easier for users (or "Pinners") to purchase the merchandise on the social media platform. "The vision is bigger than one person, including a founder," Ben Silbermann, co-founder and former CEO of Pinterest, said on an August conference call.

Last June, Bill Ready was appointed Pinterest's CEO and Silberman was named to the new position of executive chairman. Ready is an experienced e-commerce executive, having formerly served as Google's president of commerce and Venmo's CEO.

"In our next chapter, we are focused on helping Pinners buy, try and act on all the great ideas they see. Bill is a great leader for this transition," Silbermann said in a statement.

Of course, not all CEO transitions are designed to completely overhaul strategy or bring in new blood.

According to Challenger, Gray & Christmas, the hot labor market is a key reason why an increasing number of CEOs are leaving for new roles in different companies or even within the hierarchy of their current organizations.

"Companies are increasingly reporting talent shortages at every level of their organizations," Challenger says. "The skill sets that many CEOs have are in high demand. A quality candidate could get poached even from within."

Other CEOs are leaving because they had steered their companies through the pandemic and were ready to move on. That was the case at Southwest. Earlier this year, Gary Kelly stepped down after more than 17 years at the helm and was replaced with company veteran Bob Jordan. Kelly will remain as executive chairman.

"I think now is really the perfect time," Kelly said in an interview with CNBC. "We've stabilized."

Theresa Agovino is the workplace editor for SHRM.

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