Lessons on CEO burnout, how to spot it, how to resolve it

Part of being an effective leader is to constantly evaluate yourself. It can be difficult to objectively determine how you’re doing– to see yourself as others see you. The problem of leadership burnout is that no one is going to tell you. No one is going to come into your office and tell you that you’re losing your edge. You’re going to have to self-monitor to make sure that you are on top of your game. What are the consequences of burn-out? Have you seen it? Here is what I saw.

A CEO was within 5 years of retirement and had grown his company from 30 employees to 200 in a decade.  He had an empowering style and had built a strong management team. As he shifted his thoughts to retirement, he became distracted, such as engaging himself in a local business group, where he was elected president. He didn’t know it, but his shift was more about burn-out then he thought.  His hours in the office diminished and he frequently missed management meetings.  A recession occurred and revenue dropped.  The issue was brought up at meetings, but he brushed it aside.  The other owners were afraid to be insistent on action, so the problem endured and the company went deep into debt.  Finally, as the company’s lender threatened to close the note, the minority shareholders snapped and demanded the CEO step down, or they would leave the firm.  Faced with the reality of owning a business without its key players, he abruptly stepped down and left the company.   Not exactly the way to exit from a highly successful career and start retirement.

Here is a better way. A founder and CEO of an environmental consulting firm established a one person one-vote stock structure.  Fundamental was the desire to be relevant, and to attract talented and aggressive professionals. Without saying it, this set up a culture of free and open dialogue. The company grew from 10 employees to 800 employees with 100 shareholders.  Having seen a dramatic rise in his wealth, the CEO began slowly selling his shares several years before retirement and was no longer an owner. Yet, he continued to be employed and contribute– sustaining the respect and admiration of his team. He had less responsibilities and was no longer the CEO, but he was able to reduce his focus, avoid burn-out and plan a graceful exit.

For more on this phenomenon, how to recognize burn-out and what to do about it, read this article by Sam Bacharach that talks about five signs a leader is burned out.