In the last 15 months, 128 new executives took the reins at America’s 1,000 largest companies. While the firms may be different, there are a few things every new CEO can do to ensure success, according to Paul Winum and Deborah Rubin, senior partners and practice leader co-heads, Board & CEO Services, at RHR International. They’ve helped hundreds of leaders successfully navigate the transition and offer their insights:
Why is the first year so critical for a new CEO?
A CEO transition is a critical inflection point in any organization’s history. The first year of that transition presents a great opportunity to propel the organization forward, re-recruiting and re-purposing the senior team and, in fact, the entire organization. The foundational partnership with the board and investment community is also established in the first year of a new CEO’s tenure. If these key objectives are well managed, the new CEO is positioned to lead the organization forward, making important deposits in the metaphorical relationship and credibility bank. Conversely, if these critical tasks are not properly negotiated, it can be an uphill battle for the new CEO.
What are key markers of success or failure in year one?
There are three primary tasks incoming CEOs have to succeed in doing. First, they must develop clarity of strategic priorities with the board and install the organizational culture and processes that will accelerate progress toward the business objectives, engaging the workforce toward those objectives. Second, they need to ensure that their organization has the necessary talent in key leadership roles to execute the strategy and that those individuals are aligned on key business goals. Third, at the personal level, the new CEO needs to develop a deep understanding of the requirements and expectations for the position and accelerate his/her personal transition into that role.
How well the CEO accomplishes these three things can be measured through a combination of pulse checks with the board, leadership team and larger workforce and measurable
progress toward business performance measures. An outside resource working in partnership with the CEO, board and CHRO can help immensely through the first year of the CEO’s transition and integration. This transition and integration work is frequently overlooked during the CEO succession process but is as important to the company’s success as picking the right leader.
What’s the most common mistake in the first year?
Not moving quickly enough to ensure the right people are on the senior team and not focusing sufficiently on building alignment and trust among this group. The first mistake significantly slows down progress toward plans the CEO has for the organization. Under-investing in the second creates complexity and dysfunction at this level and for those lower in the organization that is harder to reverse than it is to prevent.