Mistakes can be costly for a first-time CEO. In our research for “The CEO Next Door: The 4 Behaviors that Transform Ordinary People into World-Class Leaders,” we found that on average, boards remove underperforming CEOs in roughly two years.
If you find yourself hitting inevitable headwinds, how do you make it past this hurdle? The answer lies in cultivating better relationships with your board.
Over the last 10 years, we have compiled comprehensive research, including quantitative analysis of thousands of CEO assessments as well as qualitative interviews. We asked CEOs about the missteps they had made. We weren’t surprised when the CEOs listed “failure to manage the board” as one of the top three. But we found that CEOs who had strong board relationships extended their runway, leveraging the credibility they built with the board.
“harnessing the knowledge, relationships and resources of a group of board members helps you achieve the full potential of the business.”
To develop successful relationships, a new CEO needs to jump right in when it comes to establishing a leadership role with the board. But one of the biggest problems within new CEO/board relationships can be the lack of shared context. To solve this problem, a CEO should focus on getting to know the board at the outset, gaining an understanding of power dynamics and developing an engagement plan with each board member.
To help CEOs navigate this process, we’ve identified six common board-member profiles:
The Engaged Partner knows he is not managing the business, but is there to give advice and accountability. If a board doesn’t consist of at least three-quarters engaged partners, a CEO should look to proactively add and develop a few more to add to the board, as the engaged partner will help a CEO be his or her best.
The Quiet Expert has knowledge and experience but needs to be asked to give input. While this board member has more competence than influence, engaging him by proactively asking for input or putting him in situations where his expertise can be utilized is the best course of action.
The Rubber Stamper aligns himself with the CEO and the most powerful board members. This board member is looking to get hired on additional boards, which means he is always trying to be agreeable. Overlooking a rubber stamper is unwise for a new CEO. The best way to work with a rubber stamper is to know who he sees as influential on the board, especially as big decisions are being made.
The Micromanager wants to prove his value, and sometimes superiority. This board member can be dangerous for a CEO because the micromanager’s behavior can weaken the CEO’s power and cause undue disruptions on the board. If the micromanager is merely misguided, a CEO can give assignments that suit the micromanager’s skills and align with the business. If this board member is disruptive, a CEO can look for others to coach him or have him removed.
The CEO-in-waiting is after the CEO’s job. A good way for a new CEO to determine who on the board falls into this category is to ask who else was seeking the job. Once a CEO-in-waiting is identified, the best action is to be open and find ways to use his skills and expertise so he can add value.
The Activist is put on the board by a hedge fund or private equity firm. This board member has a specific agenda. Because the activist is loyal elsewhere, an effective way to deal with her is to find common ground and build from there.
The new CEO who can decipher the power, goals and motivations of board members early on and then use that intelligence to engage effectively can orchestrate a performance in the same way that the best conductors do. As Robert Spano, conductor of the Atlanta Orchestra, said to us, “A great conductor does a lot of listening to deeply understand his performers: what they think, what their concerns are, what’s motivating and disappointing them. The conductor does all of that with the sole purpose of serving the vision of the music.” Similarly, harnessing the knowledge, relationships and resources of a group of board members helps you achieve the full potential of the business.