CEO turnover and chronic corporate underperformance are examined through the lens of Transgenerational Response.
The criteria for investigating Transgenerational Response in corporations consisted of identifying a Critical Corporate Incident, the number of corporate generations and the resultant corporate financial performance.
The evidence presented in the case studies illustrates how a Critical Corporate Incident has produced the consequential effect of chronic financial performance in the years following the incident.
These case studies have not presented the “actual” adaptive responses, inherited attitudes and behaviours that have subsequently embedded themselves in a new corporate culture, post the Critical Corporate Incident, to the detriment of the long-term health and performance of each firm.
Examining CEO turnover and chronic corporate underperformance through the lens of Transgenerational Response means that business leaders can identify how a historic event has affected the performance of their firm in subsequent generations. With this knowledge in hand, they will be able to examine the inherited attitudes and behaviours, organizational policies, strategy and adaptive cultural routines that have combined to consolidate the firms chronic under performance.
This is a highly original, evidence based, idea that has the potential to reshape our current understanding of CEO turnover and underperforming firms. It will help business leaders identify how a historic event has affected the performance of a firm in subsequent generations.
Martin Reeves, Senior Partner, Boston Consulting Group and Director, BCG Henderson Institute, supplied critical feedback during the development of this article.
Oliver, J. (2017), "Is “transgenerational response” a hidden cause of failed corporate turnarounds and chronic underperformance?", Strategy & Leadership, Vol. 45 No. 3, pp. 23-29. https://doi.org/10.1108/SL-01-2017-0006
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