Nearly 60% of CEOs plan to replace a member of their senior leadership team within the next six months, and CFOs top the list, according to an October report from Boston Consulting Group.
That share rises to 70% of those at the largest companies in the study. Meanwhile, 43% said they have no such plans.
The second edition of BCG’s CEO Insomnia Index is based on a survey of 645 CEOs at companies with $100 million or more in revenue, conducted June 18 through July 5. Of those, 110 work in healthcare, a BCG spokesperson confirmed to Becker’s. The firm also surveyed 500 nonexecutive employees June 23-25 and analyzed five years of CEO turnover data from the S&P 1200. The report does not break out findings by industry.
Here are seven things to know:
1. Only 63% of CEOs said they are confident their senior leadership teams can execute their vision over the next two to four quarters. Asked why, CEOs cited “capability gaps” and competing agendas. “My direct reports don’t have the skills to do their jobs,” one respondent wrote.
2. CFOs were the executives CEOs most often said they plan to replace (16%), followed by COOs, CHROs and chief marketing officers (12% each). Chief commercial officers (11%), chief technology officers (10%) and chief digital officers (9%) rounded out the list.
The CFO finding echoes BCG’s first index, released in April, in which 26% of CEOs named the CFO as the C-suite colleague posing the greatest threat to their own job security.
3. BCG partly tied the expected shake-ups to AI. CEOs need to determine who on their team is reinventing their function around AI and who is “simply layering new technology onto old ways of working,” the report said.
4. Near-term pressures are also shaping CEOs’ priorities and 60% said those pressures take up a disproportionate share of their time, up 3 percentage points from the first index. That share rises to 68% at the largest companies. The board was most often named as the main driver of those pressures (39%).
5. The report’s central finding is the trust gap between CEOs and their workforces. Nearly 90% of CEOs said they are confident their employees trust their leadership, but only 46% of employees agreed. The gap widens when it comes to well-being: nearly 70% of CEOs said employees trust them to put employee well-being first when deciding how to fund business priorities, compared with 36% of employees. Even so, nearly 60% of CEOs said they are not concerned about rising employee “disgruntlement,” and many said they are already doing enough to keep employees satisfied.
6. The disconnect is sharpest around AI. Just 15% of CEOs said they worry their approach to AI transformation could erode employee trust, while 40% of employees said their CEO has not been transparent enough about how AI will affect their roles and careers.
That trust appears to shape effort. Half of employees who said their CEO’s approach to AI increased their trust are more willing to go above and beyond at work than they were three months ago. Among employees who said it eroded their trust, fewer than 10% said the same.
7. Overall CEO stress eased, falling 2.5 points to 64.2 out of 100. Still, 34% of CEOs said they have considered stepping down at some point in the past six months, and nearly half said they often or very often put off activities that support their physical and mental well-being.
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