15 Jul 2009
If you go back six or seven years, a typical executive board would give an incoming CEO six months to find out how a company works, six months to develop a strategy and six months before they looked at results and started to assess them on performance. In the current economic climate, this timeframe has been dramatically reduced, and in some cases you’re looking not at six weeks, but six days for each of these.
Today’s situation is vastly different than ever before, which means a CEO’s priorities and approaches in their first 100 days must be different. The board is likely to be far more heavily involved with strategy and setting the agenda than previously, and the CEO will be expected to execute it as soon as possible. We’re in a change environment, so for the CEO it is a case of quickly identifying what they can live with for the longest and what they can’t live with at all. They need to quickly assess their direct reports and decide who is capable of driving through the necessary change. And they need to be benevolent to and respectful of the workforce but candid about any change.
Most companies that are changing their CEO at the moment are doing so as a result of crisis rather than succession planning or because of growth opportunities. It is likely, therefore, that any incoming CEO will be on a period of at least three months’ gardening leave so, after the euphoria of securing the person who will hopefully get the company back on track, everyone is left in limbo. When the CEO does arrive, it is vital that they meet with the board immediately to reiterate what has been previously agreed and consider whether it is still the right strategy and direction for the company since 90 days is a very long time in this economic climate.
Discuss with the board where the predecessor went wrong. Was it due to bad investments, a poor judgement call or perhaps he or she didn’t have the right people around them? It is important to be perceived as strong and to show you are able to move rapidly and be decisive. If you want to introduce new products or services or launch an initiative that you believe will help the business, make sure a return on investment will be seen sooner rather than later. In the old days, a payback period of two and a half years may have been acceptable, but in this short-term, result-oriented world, you’ll have to shave this back to six months.
The CEO needs to get involved with operations as soon as possible and organise their direct reports and the next layer down. This means getting to know the strengths and weaknesses of a lot of people. In highly complex businesses, some CEOs decide to use a headhunting or management assessment firm to come in and assess their top 50 people. This doesn’t mean the CEO withdraws from this vital getting-to-know period, but if they tried to do it entirely on their own it would prove too time-consuming and take them away from running the business. Using an external party also means that they have opinions from one consistent source and, given there is only so much a direct report will tell their boss, they may also glean more about the individual and the company by taking this approach.
CEOs should also remember that while they were serving their notice period, the COO, CFO, CMO and other C-suite personnel will have reported directly to the board, and that line of communication is still likely to be open. It may well be that the board uses this channel to find out how the CEO is getting on in the early days and you should be appreciative of any feedback from this and act on it where necessary.
In the current climate, one of the most important ‘C’ people to get to know is the chief HR officer. If they are doing their job well they will have their finger on the pulse of the organisation. They are often the go-to person for everything from gossip to good ideas, so can provide you with a shortcut as to what is going on inside the organisation. Arrange to meet with them once every two weeks and encourage them to be frank in their feedback to you.
In the current circumstances, CEOs need as many ways as possible to shortcut the information about the company, its culture, how it operates and its people as well as be able to zoom in on the issues they are likely to face. Devise as many ways as possible to accelerate what traditionally can prove to be lengthy processes.
There is only one way to communicate when you’re an incoming CEO, and that is to over-communicate. Even if employees snigger about the CEO being on the voicemail again, giving yet another update, this is infinitely preferable to them having no information. Over communication breeds confidence whereas a lack of communication can breed panic. Potentially, a new CEO equals major changes in everyone’s life. Can we extend the house? Should we send the children to private school? Are we able to go on vacation this year? – these will all be topics of conversation in every household as employees wonder what the new guy at the top is going to do.
So one of the first leadership challenges CEOs face is releasing the tension and calming the situation down. When people don’t know what’s going on, they feel tremendous anxiety. Also think about your body language and demeanour; if a CEO looks worried when they emerge from their office, it sends out a negative message.
With an increased focus on transparency, open and honest communication is best but you must also be benevolent. When you talk about what you are going to do, it is important to communicate that what you are doing is in the interests of protecting the business on behalf of everyone and not for short-term profit.
The technology available to CEOs means there is no excuse for not being close to people – not necessarily physically close but communicatively close. Communicating through voicemail is far better than communication through email. Remember that people listen to words based on voice inflection, but they read words based on their mood. You’ll achieve a far higher consistency of message using voicemail.
Communicating a little but often can be highly effective in the early days. One of the things that is important to employees at the moment is making sure their bosses know how hard they are working and sending one-line congratulations for a job well done is a good way of doing this.
While technology is an immensely valuable tool for a CEO of a global company, it doesn’t give you license to become a virtual CEO. There will be a lot of demands in the first 100 days but it is important to spend time – or at least schedule visits – to overseas offices so you can appreciate not just the business culture but the familial and personal cultures of the countries you are in. Embracing a global culture is a requirement to show that you are serious about having an impact on the business from a local region’s perspective.
While the first 100 days are all about putting in place the building blocks for the future, it is also important to acknowledge the company’s past. The organisation may be going through a period of transition but many people at the company will be proud of its heritage. Previous successes should be celebrated, and explain that what ‘we’re’ going to do is return the company to the good times. Always use ‘we’, and remember that the word ‘I’ should never cross the lips of an incoming CEO.