Dean Reinemund Quoted in Wall Street Journal Article about the Pressures on Today’s CEOs

12.7.2010 Article, General, School News

Corner Office Turned Pressure Cooker
Reposted from The Wall Street Journal | By JOANN S. LUBLIN

Jeffrey Kindler, who stepped down as Pfizer Inc.'s chief executive on Sunday, citing burnout, is the rare CEO to say that the job wore him out.

In fact, occupying the high-powered cocoon known as the corner office is more stressful than ever, thanks to a greater emphasis on globalization, stiffer competition, heightened government regulation and the weak economic recovery, say former CEOs, corporate directors and management experts.

Compared with four years ago, pressures on CEOs "are substantially different—especially in certain industries," said Steve Reinemund, who retired in 2006 as PepsiCo Inc. CEO "It's still pretty tough out there," adds Mr. Reinemund, dean of Wake Forest University's business school.

As a result, many CEOs now look at the corporate throne "as a position with a limited term of office," said Jeffrey Sonnenfeld, a senior associate dean at Yale University's School of Management. "They rarely seek to stay a minute more than a dignified decade."

To cope, a few CEOs cut short their tenure. The head of a mid-sized mutual insurance company intended to retire in early 2013 after serving since 1999. But during a board succession-planning session three years ago, this chief announced he felt "frankly burned out" and wanted to leave within a year, said Beverly Behan, a New York corporate-governance consultant. "It was the most emotional board meeting I had ever been in," she added.

His announcement forced the board to accelerate its succession timeline. But an internal candidate wasn't ready to take command. So the burned-out CEO ran the business until early 2010, said Ms. Behan, who declined to name the executive or company.

Some corporate directors monitor whether the No. 1 executive is working too hard. While Daniel Vasella ran Novartis AG, "we were concerned he was travelling around the world all the time, and it was affecting his family life," recalled William W. George, a former director of the drug maker who led Medtronic Inc. until 2001. "We said, 'Make sure you take care of yourself.' He monitored it [his travel] better," said Mr. George, now a Harvard business school professor of management practice. Mr. Vasella remains Novartis chairman.

A U.S. spokeswoman for Novartis said late Monday that Mr. Vasella couldn't be reached for comment in Switzerland.

Mr. George still serves on the boards of Goldman Sachs Group Inc. and Exxon Mobil Corp., where he said independent directors often privately discuss the pressures facing their CEO. "The job is a lot more stressful than when I had it," he said.

Executive recruiters also measure CEO candidates' ability to handle stress. Joseph E. Griesedieck Jr., a vice chairman of search giant Korn/Ferry International, said he assesses how well prospects deal with stressful situations. "You look for the person's ability to accept new challenges by measuring their learning agility and ability to deal with complexity," he said.

Michael Bonsignore, retired CEO of Honeywell International Inc., suggests that stressed-out corporate leaders exercise vigorously. Without his own 45-minute daily regimen, "I don't think I would have been as effective," recollects Mr. Bonsignore, who stepped down in 2001. "The exercise was a tremendous release of pent-up energy, physical as well as emotional."

Write to Joann S. Lublin at