A recent internal survey of CEO turnover conducted by executive recruiter Russell Reynolds Associates found that retail CEOs change jobs 30% more frequently than Fortune 1,000 CEOs in general, said Brenda Malloy, managing director and global retail practice leader of Russell Reynolds Associates, at the closing session of the National Retail Federation’s 101st Big Show on Jan. 18.
The study, which surveyed 81 U.S.-based companies with at least one billion dollars in revenue over a five-year period, also revealed that retail CEOs had 80% turnover within two years, pointing to a marked “lack of stability and innovative capacity in the C-suite,” Malloy said.
“Direction and culture are the two most important thing that as leaders we have to focus on,” said Stephen Sadove, chairman and CEO of Saks, Inc. “Oftentimes it’s not the people that need changing, it’s that there’s no clarity of direction for the organization or clarity for the culture that the organization wants to have.
The importance of culture is “critical,” Malloy said. In order to monitor a CEO’s ability to create a good corporate culture, she said Russell Reynolds Associates utilizes an online survey that measures this capacity by gauging five factors: openness, discipline, strategic orientation, performance orientation and relationships.
Burberry CEO Angela Ahrendts said that when she took the helm at Burberry six years ago, her leadership philosophy was to focus on the brand as a priority while building trusting relationships at the same time.
“We want everyone to work for a higher purpose and that the brand,” she said. “But it’s also putting the human touch back into business because we knew that connecting people around a single vision is the greatest asset we have.”
Brian Devine, president and CEO of Petco Animal Supplies said that leaders surround themselves “with people who have their own opinions” who are also willing to share them.
Guitar Center, Inc. CEO Marty Albertson echoed that sentiment, advising retailers and executives alike to “have the courage to voice your opinions” and “fight for your views” when facing recalcitrant bosses or directors.
But overall, consciously developing a healthy corporate culture is the major challenge facing retail CEOs — and it should be at the very top of their agendas, whatever that culture may be, said Albertson.