How Long is it Healthy for a Leader to Stay in Place?

The China Daily presented the move currently underway to extend the time the Chinese leader can stay in post as being “necessitated by the need to perfect the party and the state leadership system”.

                                                                                              © Getty Images

History shows us that most leaders, and especially political and business ones, have a certain ‘shelf life’.

Interim leaders rarely suffer from this problem because their remit is defined. It regularly changes the organisation they are operating in, which means someone with a different skill-set will carry on after they have completed their contribution.

 

For chief executives or national leaders, 10 years is pretty much the sell-by date ‘rule-of-thumb’. By this time, burn out and/or loss of focus is occurring. Good examples of the effect would be Margaret Thatcher (11 years), Tony Blair (10 years), Sir Terry Leahy (14 years at Tesco, then vanity empire building and eye off the ball at home). Angela Merkel (12 years and counting, and looking less up for it by the day).

John Stepek in MoneyWeek has phrased it all succinctly and made it relevant to investment, especially in China with the latest machinations referred to above.

Long lived power in one pair of hands tends to get out of control. This is summed up by the saying: Power tends to corrupt and absolute power corrupts absolutely”.  The historian and moralist, Lord Acton, expressed this opinion in a letter to Bishop Mandell Creighton in 1887. He went on to say that  “Great men are almost always bad men.”

Although we may have a view on how the American Presidential system works, they do adhere to a strict limit of two, four year terms of office as a maximum which seems to avoid the leader overstaying their welcome.

One 2013 study from the University of Texas (Xueming Luo, Manuri and Andrews: How Does CEO Tenure Matter?) suggested c. five years is the ideal time for the incumbent to remain in office. Prior work suggests 8-10 years as the maximum.

So why is China, against heavy historical evidence, apparently going in the opposite direction? This is in spite of local evidence of what happens when power is concentrated for so long in one person and the carnage that this can bring? Do c.50,000,000 fellow citizens being sacrificed to the cultural revolution not count for much? Or is the new justification headlined at the start of this article trying to indicate that the move is to avoid that kind of problem in the event that the Chinese economy overheats and/or the hopelessly inefficient centrally controlled old industries collapse; resulting in massive unemployment and growing dissatisfaction with the party (God forbid!)?

In the world of interim management, at senior level, the issue never really arises. True, timing an exit is important. Leaving the client with the outcomes achieved, successor identified and ‘ground-in’ and yet still not there long enough to start picking up any ‘Z-grade’ or local chores is optimal. The whole concept of interim work is effectively “self-redundancy”. Often the problem is the reverse – working with the client long enough to ensure the change you are engaged to achieve has been satisfactorily established for the long term. Where culture change is required to work in parallel with newly embedded strategy being effectively implemented; this can frequently be tricky.

So, power needs a sell-by date. If it is there too long, it starts to mutate. ‘In extremis’, it can go cancerous.

On the other hand, with good timing, saying farewell can be breathtakingly good and a great way to sign off a successful piece of work. Knowing when to leave is the final act of a great leader. Staying too long brings Lord Acton strongly into play.

 

 

 

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