I was recently asked by a new CEO what others in the role found most surprising particularly during their first year in the seat; an interesting question since many view the Chief Executive as the most prepared of all the leaders to take the helm. On reflection, three aspects of a CEO’s role stand out as having confounded many we’ve advised, and it is worth considering how to prepare for and get ahead of these new realities to ease the transition and accelerate your time to action and results.
Moving Inside Out. The Big Value Shift to the External CEO.
When she was promoted to CEO of a global manufacturer, Sharon had moved from running a business unit to leading Human Resources as she was groomed for the top seat. In these roles, her head was in the business, driving results and managing execution. Once she was promoted, she was instantly thrust into the spotlight as a prominent pick to run the company. Her long career of successes had prepared her to lead the company through their strategy. What she didn’t count on was the very public role she was about to play.
Even the most experienced senior leaders who have interfaced with customers, led sales networks, or been on the speaker circuit at industry events find that moving into the CEO seat means a significant shift in how and where they spend their time. Once promoted, their role moves from focusing on their organizational relationships to engaging in activities to position the company and brand to a range of external stakeholders. As they step into this unexpected limelight, many have found themselves back on their heels with new demands of representing the “face and voice of the company” through community relations, non-profit and foundation events, media interviews, and speaking engagements. Beyond the formal role, one CEO shared that the minute he got the job he went from relative anonymity in his community to “people stopping me at the supermarket to ask me about our latest ad campaign or see if we were hiring.” He was struggling to balance his very public face of the company CEO with the privacy he had always enjoyed.
Some CEOs embrace this role, using social media as a platform to build a brand message. Others use it to advance a social agenda that is important to both the company culture and to them personally. For example, Dow’s newly named CEO, Jim Fitterling (who recently came out as a gay man) is driving a culture of inclusion, customer centricity, sustainability and operational efficiency using speaking engagements, media interviews and attendance at LGBTQ and other events. This has been met with strong approval by employees and investors, elevating brand equity and employee engagement.
In this era of transparency, authenticity and customer-centricity, the CEO external brand is now a key driver of value to the company. Now more than ever, the partnership between the CEO and a strong communications/PR leader has become strategic – and essential – to making the right moves as they assume they shift to the role of Communicator in Chief.
Build the A-Team. The Need for Speed in Lining Talent Up With Strategy.
In the first year of his role as the CEO of a large health company, Rob labored to get his executive team performing together as the Affordable Care Act created instability in their markets. The challenge he faced was that he had inherited an intact team when he was promoted, most whom were within a few years of retirement. Additionally, the outgoing CEO had moved to the board chair position and was still actively involved through long-standing relationships. Until the team began to turn over, Rob spent precious time trying to advance a new agenda with a team who was married to the past.
Though many understand all too well that the strength of the executive team is a direct reflection of their own strength as a CEO, several we’ve worked with have felt hamstrung with long-term legacy leaders, or direct reports brought in by the former CEO. Others found that the new strategy they were forming surfaced talent gaps on their team – they simply didn’t have the players to take them forward. There are 3 approaches we’ve seen those CEOs take as they rev up their agendas. One is to live and work with the existing team. Two is to slowly transition the team by restructuring and prompting retirements. Three is to aggressively rebuild the team within the first year.
Each of these comes with risks and benefits and should be considered based on the company’s tolerance for disruption. However the biggest “aha” experienced by most of the Chief Executives we’ve worked with is that in looking back they see clearly that they should have taken more aggressive action, sooner, to make changes to their team and bring in stronger players capable of supporting their agenda. Those who waited and attempted to work with existing or legacy team members ultimately paid the price in lack of productivity and time to value. The amount of time spent making the case for change and fighting old battles diminishes the benefits of institutional knowledge and proximity. No one EVER has told us that they wish they’d waited longer.
As a rule of thumb, we have found that making key moves on important executive roles should happen within the first year. Don’t get left behind by softening the blow or easing off the band aid.
Build Your Kitchen Cabinet. The Importance of Internal and External Partnerships.
Back when President Andrew Jackson was in office, the Kitchen Cabinet was a mocking reference to the circle of non-political advisors he assembled as he worked to unseat established officials. Today it’s standard practice for C-level executives we work with to seek the counsel of trusted advisors, both inside and outside of their companies. The Kitchen Cabinet has become a necessity.
For new CEOs navigating the first year, having neutral perspectives to inform decision-making helps to counter the jockeying that occurs around them. Every message they receive is “managed information,” packaged for a purpose. Most of the time, the “truth” is hard to come by, and they must rely on performance metrics and concrete data to guide their thinking.
In addition, transitioning from “management” into “strategic leadership” is a challenge for many, and this new dynamic leaves new CEO’s feeling more alone than they’ve been during the climb to the top, especially at a time when support and advice is much needed. Securing experienced advisors who don’t have “skin in the game” can accelerate the path to success and avoid the hidden mine fields.
It’s often said that when you’re the CEO, “the mic is always on.” Some find it challenging to manage board relationships and find their voice with influential analysts as shareholders closely watch how the new CEO is navigating. To stay balanced, most new CEOs lean heavily on their CFO and CHRO, who are relatively neutral partners, unlike P&L leaders who are accountable for metrics that can interfere with an enterprise point of view. In addition, CEO Clubs, discussion groups and networks of peer advisors are forums to test ideas, get advice, hear how others are handling a situation, or prompt new thinking. CEO’s we advise report that having a coach to hash out their thoughts before they go “prime-time” became invaluable in their success.
Donald Rumsfeld famously quipped that there are known knowns and there are known unknowns, but the biggest threats were the unknown unknowns. What CEO’s wish they knew before getting into the seat has little to do with running a sound business, and everything to do with how they lead.