How often have we seen the following scenario:

A new person is brought in as chief executive officer of an underperforming financial institution. For a while, he is the toast of the town, considered a miracle worker.

Then, in what seems only a short time, the CEO is out, and the name no longer elicits praise but often brings no recognition at all.

To answer this, one first must ask: What are the intangibles that make a CEO great in the first place?

Sometimes it is an indescribable talent for motivating people like no one else can.

Why can one orchestra conductor stand in front of musicians and wave a baton with little more than mundane results, while another can elicit beautiful music?

In banking as in music, we do have some clues:

The CEO or conductor knows each individual's role so well that he can empathize and help improve the performance of that role.

The leader is such an understanding person that he or she relies more on semi-psychiatric skills in accomplishing goals, listening closely and then exhorting the staff like a coach assuring players "you can do it."

Sometimes it involves caring, like visiting all departments regularly or showing up at the operations center in a sweater on New Year's Eve so employees can see the boss will not be partying that evening while they work.

It also involves acting like the head of a big family-everyone's successes bring the CEO joy and everyone's woes or disappointments bring sadness.

But what makes great CEOs go stale? What happens to rob them of their effectiveness?

Some causes are easy to see:

The ego takes over. Someone who felt as mortal and prone to mistakes as the next while climbing up the corporate ladder now feels infallible.

The CEO develops a new goal that supersedes managing the bank's performance-such as building a reputation as a civic leader or arranging for a son or daughter to be the next CEO.

Getting so worried that he or she will not be remembered and appreciated-and so convinced no one could possibly fill those big shoes- that no suitable management succession plan is developed.

But all too often there is a far simpler reason why the initially successful CEO fades as time passes.

What are some of the other reasons why CEOs are replaced?

Becoming so friendly with staff members and fellow officers over the years that they can't take the harsh steps necessary to fine-tune the bank for today's competitive environment.

Developing too many skeletons in the closet en route to achieving performance goals-like the CEO who has built a bank through acquisitions and along the way made promises to management of the acquired banks that can't be kept without hurting the bank's bottom line.

Sometimes the CEO has made one or two boneheaded decisions that cannot be corrected, no matter how small they may be.

I heard recently of a CEO who, in an effort to cut costs, reduced the salary of a loyal staff member with 30 years experience by $3,000 a year. Once that got on the grapevine, the CEO's effectiveness was compromised, and the board realized that only by dismissing him could morale be restored.

In effect, the next CEO was in the right place at the right time.

But times change and someone who was a hero when cost-cutting or morale rebuilding was the bank's goal can be a dud when the shop has been streamlined and building new business becomes the first priority.

Here is where CEOs must step back and look at themselves in the mirror, no matter what success they have had up to now. Otherwise, they too may become last year's perfect CEO, which in today's environment is as valuable as yesterday's newspaper.

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