Missing in Action: The Fallout of CEO Absenteeism

A CEO’s physical presence is integral to company success

In the high-stakes world of biotech startups, a CEO’s presence—or lack thereof— shapes the company’s culture and potential success perhaps more than any other single factor. Yet, startup CEOs are often pulled away from day-to-day operations to focus on external activities like fundraising, working tirelessly for the company’s future. Even if employees generally understand the need for this external focus, CEOs must accurately assess and address the damage inside the organization when they aren’t present to shape the company’s culture.

I’ve watched startups begin strong but end in lackluster performance, and even failure, the more distant the CEO became. Of course, the science needs to work, but even strong science regularly fails to overcome a weak culture. Flourishing cultures have stronger innovation, collaboration, problem-solving, work ethic, output, and engagement.

I’ve seen numerous examples of absent CEOs, from the company that hadn’t seen its CEO in almost a year, or the company that would send out emails from the CEO that sounded nothing like them. Perhaps CEOs would like to think their on-site presence isn’t particularly important; but I’m here to say that a CEO’s physical presence is integral to company success. Just ask employees and investors!

The most effective leaders know how to balance their time between internal and external responsibilities. When this balance is off-kilter, it can affect credibility, employee morale, turnover, productivity, and even innovation. Here’s a closer look at the specific challenges and actionable steps CEOs can take to avoid the pitfalls of absentee leadership.

The Downside of CEO Absence:

  1. Lack of Visibility / Loss of Credibility: Employees rarely see the hard work their CEO is doing for the company. Instead, they see an empty office and a lack of visible leadership. The CEO loses touch with the daily efforts and challenges of their people. A dysfunctional pattern emerges: a mutual feeling of being unnoticed and unappreciated that can harm both the CEO and employees and cause them to act defensively. To employees, the absent CEO loses credibility. Without having a finger on the pulse of what’s happening within the organization, how can the CEO provide credible feedback about anything?
  2. Helicopter Leadership: When CEOs intervene sporadically, they often act on incomplete information, leading to poorly informed decisions. Resentment builds as employees feel they must manage the CEO’s reactions, which takes them away from their work. The sporadic presence of the CEO also leads to operational bottlenecks. This leads to slower response times and decision-making. Even with delegation, helicopter CEOs often overrule decisions, creating delays and further eroding morale.
  3. Lower Morale and Engagement: There’s a perceived sense of unfairness when the CEO is not present but is expecting others to be. This disparity breeds resentment. Questions like “If the CEO isn’t coming in, why should I?” start to surface. Employees begin working remotely more frequently, and those who must be present in the lab or office feel the brunt of this leadership void. Low morale and engagement result. Furthermore, a perception that the CEO doesn’t work hard can develop and lead employees to adopt a more relaxed attitude, coming in late or leaving early, which lowers overall productivity.
  4. Hindered Mentoring and Growth: When senior leaders start working remotely because they see their CEO doing so, it prevents employees from optimal learning through observation and direct interaction, thereby stunting growth and development. This has a significant impact on junior employees, because they often learn best when they can pop in and ask their manager a question instead of having to set up a call or lose precious time waiting for a meeting to happen.
  5. High Turnover and Poor Hiring: Employees start moving to the door as they become more disconnected and disenchanted, usually stemming from not feeling valued or appreciated by the CEO. Hiring also becomes challenging when job candidates see disengaged employees. It’s often palpable.
  6. Vision Drift: Work will continue without the CEO’s presence, but given enough time, it will stray from the company’s vision, leading to misaligned efforts.

What’s the Solution?

  • Get into the Office: Rediscover your love for the mission and the people. Balancing fundraising and other external work with internal responsibilities is crucial.
  • Plan and Prioritize: Audit your time to find a balance. Allocate specific days for external meetings and conduct phone calls from the office to maximize interaction with employees. While you can’t do 1:1s with everyone every week, how frequently can you meet? A good rhythm is every 2 weeks for direct reports and all others once a quarter. Also, think about company-wide communication. What should you be communicating, what communication channels should you use (HINT: use multiple channels), and how frequently?
  • Find a mentor: Find a CEO who strikes a balance between external and internal activities and learns from them. Before engaging with a CEO mentor, do your diligence and ask several people in an organization about the culture and the CEO’s impact on it.
  • Evaluate Your Performance & Job Fit: If the people aspect of being a CEO is not appealing, perhaps being a CEO isn’t a good fit. Consider additional roles where you can leverage your strengths, like business development, consulting, or Venture Capital.

The best CEOs I’ve worked with are well-rounded. They realize it all doesn’t come naturally, but they know where they need to focus, grow, and devote their time. It’s challenging and there are times when they feel pulled in many directions, but they remain aware of their role in the company’s success. As management guru Peter Drucker famously said, “Culture eats strategy for breakfast,” and your culture is hungry!

Lori Dernavich is an Executive Coach with two decades of experience partnering with life science leaders and their organizations to develop the leadership skills they’ll need to scale successfully. Explore client testimonials!