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2019: The year of CEO exodus

2019 was the year of CEOs, as many top-level leaders across the board lost their jobs or were forced to step down after steering their companies to great heights

The main reason for leadership change is the fact that more and more younger leaders are taking over the reins of companies Other reasons include investor pressure, turbulence during turnarounds, and scandals, along with accelerating product and innovation cycles Sir Tim Clark, President of Emirates Airline announced plans to retire in June 2020, immediately fuelling talks of who will take over the reins of the world’s largest mammoth A 380 operator

The demand for competent, contemporary leadership has always been strong, but never has it been more in focus until now, when technological disruptions are driving industries and the importance of prudent vision is more crucial than ever. 2019 was the year of CEOs, as many top-level leaders across the board lost their jobs or were forced to step down after steering their companies to great heights. As per Challenger’s CEO data, CEO changes in the first eight months of 2018 saw a 15% increase from a year earlier and was on track to be the biggest year for CEO turnover in 17 years. 

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October meant over

Even with the U.S. economy expanding, tenured company leaders left their jobs in 2019.

CEOs of high-profile companies who lost their jobs last October included Adam Neumann, WeWork founder before the company withdrew its IPO filing, Devin Wenig of eBay, Ramesh Tainwala of Samsonite, and John Flint of HSBC just 18 months into his job.

The rationale

So, what’s happening? Why is leadership change so frequent? The main reason for this, according to the Challenger data, is the fact that more and more younger leaders are taking over the reins of companies, what with the need for a new direction, plenty of disruption, system changes and the growth of technology. Investor pressure, turbulence during turnarounds, and scandals are other major factors, along with accelerating product and innovation cycles. 

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Examples from the region

The MENA region, too, has seen its fair share of leadership change, with the aviation sector facing much turbulence. In May 2019, Etihad CEO James Hogan stepped down after 11 high-flying years with the Abu-Dhabi owned airline. According to the CAPA Centre of Aviation, airlines in the region have stagnated for a while now, after being the world’s focus for aviation sector growth and innovation. “Etihad, for several years actually the fastest growing airline (from a smaller base), has dramatically changed strategic course over the past two years, following setbacks with Air Berlin, Alitalia and Jet Airways, and has actually reduced its seat numbers in 2018,” it said. 

More recently, Sir Tim Clark, President of Emirates Airline announced plans to retire in June 2020, immediately fuelling talks of who will take over the reins of the world’s largest mammoth A 380 operator. Clark is stepping down after 17 years at the helm and 35 years at the company, according to a report by CNBC. Clark, who turned 70 last month, is credited with the growth and expansion of the Dubai government-owned airline, establishing it as one of the world’s largest carriers. 

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Post his retirement announcement, Sir Tim Clark described 2019 as “a year of recalibration” as Emirates reacted to the news that Airbus was to stop production of the A380 Superjumbo and focus on enhancing customer service.

“This was a year of recalibration in terms of our fleet and network plans, when it became clear that the A380 programme will cease. Emirates’ dynamic approach to capacity deployment – during the southern runway renovation at Dubai International, as well as in response to the capricious forces of politics and socio-economics throughout the year – demonstrated our agility and yielded results. We’ve also stayed focused on delivering our “fly better” promise to customers through enhancing our product and service proposition at every touchpoint,” Clark said in a statement.

Larger Questions

Industry insiders wonder whether Clark’s departure will lead to a change in strategy for Emirates, and what its direction will be, going forward. In this context, it is unclear whether the airline’s plans to expand its fleet by 30% by the end of 2025 will stay on track after Clark’s departure. As of October, Emirates had a fleet of 270 aircraft, including 12 freight. In addition to its order of 30 Boeing jets at the Dubai Air Show in November, the airline announced an order of 50 Airbus A350-900 jets at a value of $16 billion at list prices.

Read:Emirates announces $16 billion deal for 50 new Airbus jets: Departure from the A380?

According to IATA data, in Feb-2019 the Middle East had the unique global distinction of going backwards in terms of year on year revenue passenger kilometre growth. IATA also says of the Middle East market: “Broadly speaking, passenger volumes have been moving sideways for the past 12-15 months now.” 

The question now is: Will the change in leadership give organizations the much-needed lease of life?