Today, in 2022, companies know all too well the challenges of staffing a full workforce. Labor shortages have crept into virtually every sector of business, from construction and engineering to retail and professional services. There are numerous reasons behind the stark labor market, but they don’t change the reality: open positions dominate the landscape. That includes vacancies at the highest level: in the C-suite.
The Great Resignation touched the C-suite in a variety of ways. Some executives retired, using the pandemic as an escape hatch. Others suffered burnout to the degree that pushed them out of their role. Still more used the opportunity to job jump into better or higher-paying roles. They left behind vacancies that many companies are still struggling to fill.
A vacant executive role is a recipe for disaster. Left untended for too long, companies will begin to feel the top-down effects of an empty leadership seat. Here’s a look at the problems that can quickly manifest.
- Lack of critical oversight. Without someone at the top managing different business lines or critical operational aspects of the company, things begin to unravel—fast. Direction comes from the top down, and without an executive to dictate high-level strategy and steer the company towards success, that burden falls down the chain of command. While some Director-level professionals may be up to the task, far too few can keep things running smoothly. Moreover, it’s difficult to plan long-term when you’re reliant on stopgap oversight.
- Loss of focus on the mission. Executives are responsible for unifying the various segments of business around a top-level strategy. The protracted loss of an executive puts strain on other leaders and, by turn, other segments of the business to help pick up the slack. Worse, a rudderless line of the business can deviate significantly from the broader mission, pulling apart the hard work of other lines. In simpler terms: it’s difficult to get to where you’re going if you can’t raise the anchor.
- Systemic confusion/mistakes. Loss of leadership invariably disrupts the business at a systemic level. What happens when the CFO is no longer there to provide finance oversight? Who determines the approach to an operational effort when the COO steps down? Who’s keeping the company tech-compliant in the absence of the CTO? When confusion abounds, mistakes are unavoidable. Without someone to set the tone at the top, these problems quickly become systemic.
- Brain drain/talent exodus. Loss of executive leadership can cast doubt on the company. The longer the seat remains unfilled by a qualified leader, the more uncertain workers will become about the organization’s direction—and their future at the company. It’s not uncommon for talented individuals to seek positions elsewhere, in advance of any fallout. Brain drain following the loss of an executive can cripple a company, which makes it imperative to find a replacement who can quell concerns, provide guidance and instill confidence quickly.
- Core business instability. Losing high-level leadership invariably means others will need to take up the mantle in their absence. Only another executive can truly burden the duties reserved for the C-suite. As other executives work to fill in the gaps, their own areas of focus can suffer. And while a collaborative approach may patch the hole of a vacant seat in the near-term, the strain will shake a company’s core if that seat isn’t filled.
- Reputation and appearance. How does the loss of executive leadership look from the outside? While stakeholders are sympathetic to succession planning, leaving an executive position open for too long can quickly sour opinions. It looks weak to competitors. It’s unnerving to shareholders. It’s suspicious to potential hires, vendors and partners. Filling the position with a qualified replacement shows everyone on the outside looking in that you’re vested in attracting and retaining talent at the highest levels.
Of course, these individual problems all spawn numerous other destabilizing issues. Mistakes can stem from a lack of critical oversight, leading to bottom-line losses. Brain drain not only leads to a weaker staff, it could be a boon for your competitors. It all boils down to a simple concept: the longer an executive seat remains vacant, the more companies have to lose.
In an ideal world, companies will begin succession planning well-before a top-level executive leaves. In imperfect situations, interim executives play a fundamental role in maintaining the status quo. In either case, working with an executive search agency expedites the time between an executive’s departure and their replacement. It’s not only the quickest solution—it’s often the best.