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4 Lessons for New CEOs on Choosing a Leadership Team

One of the most important things a new business leader does is assemble his or her leadership team. But new CEOs and chairmen typically will only go as far as their hand-picked team will take them. How does one decide whom to choose? 

200402207-001Like many CEOs and chairmen, Tim Ryan has been working on building his leadership team. The PwC Vice Chairman and US Markets, Strategy and Stakeholders Leader has been named U.S. chairman for the company. These 4 principles, which he relied on to put together his new leadership team, would also provide good guidelines for new CEOs.

1. Enshrining diversity. As he talked with partners, staff and clients for this exercise, Ryan kept hearing that “people wanted this team to lead not just from the top, but to lead with them to serve our clients, our people, and our communities.” So he emphasized including “a diversity of minds” on his new team who would talk “with people rather than … at them. With an inclusive approach, the sum is far larger than it parts.

And he meant various kinds of diversity. Thus of the 20 members that Ryan handpicked for PwC’s new leadership team, 35% are women, 40% are minority members, 25% “bring an international perspective” or were born outside the United States, and one is an LGBT representative. Plus, three of the 20 “didn’t grow up at PwC” and so “bring a very different perspective on the world,” and two of them are young enough to “have more than 20 years to go until they hit retirement age.”

2. Focusing on skill sets. One way for a new CEO to put together a team is to “put names in roles,” Ryan said. But his approach is to “figure out what are the skill sets that are necessary to achieve our mission and our objectives. These skill sets are what should drive selection of a leadership team.” For instance, Ryan said, “If your objective is to transform the organization from a technology perspective, which many companies are doing, this may lead you away from a number of people who don’t have digital skill sets as a leader.”

“If your objective is to transform the organization from a tech perspective, this may lead you away from a number of people who don’t have digital skill sets as a leader.”

In fact, Ryan said, one large-bank client recently took such an approach in changing its mind about a top executive who’d been the internal heir apparent for the CEO job for about a year. “Given where the industry is going and how fast the business model is changing,” Ryan explained, “they came to the realization that he may not be the best person. They stopped thinking about the individual and started thinking about skill sets.”

3. Owning your decisions. Ryan said that a new chief must, in the end, make his or her own decisions—and “own” those decisions—about who is on the new leadership team. “It’s important to get input from a number of stakeholders, including your board and your people and partners, and outside stakeholders,” Ryan said. “But at the end of the day, you’ve got to make the choices. Leading an organization is challenging, and you want a team around you who can help you accomplish what you want. You have to make the calls so that you’re comfortable.”

4. Valuing listening. It’s even more important in the top job than elsewhere on the ladder, and Ryan believes that “listening versus talking over people will help a leader become more successful.” Successful chiefs, he said, understand that “if they’re listening, about 80% of the answer is there, and his job is to assemble those data points and get the remaining 20% so you can go forward. And your people and clients are closest to where the action is” to enlighten that way forward. But listening well “is a skill that most people don’t develop overnight. If you value that skill, you do it through observation and history.”

New business leaders like Ryan have long roads ahead as they begin their tenures. But if they can start out with sound principles like these, their odds of success are much better.



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