The announcement of a new CEO is an exciting time. Exciting for them personally as this is usually a culmination of many years effort, exciting for their family who have supported them along the way, exciting for the Board who have endorsed this individual and hopefully, exciting for the organisation who look forward to the upcoming ‘reign’ of the new leader. I imagine they are hoping for less of the Games of Thrones type of reign and more of the Tim Cook or David Thodey style!
The infamous book title of “What got you here won’t get you there” applies to new CEOs now more than ever. When the Fortune 500 was launched in 1955, according to a 2013 BCG report, CEOs had 4-7 KPIs to achieve each year. Today the same CEO will have 25-40 KPIs. Employee engagement scores in the 1990s, according to sources such as Gallup, were in the 60th percentile. Today they measure in the 40th percentile and in many countries, are dropping. This creates the challenge of harnessing the energy of an increasingly disengaged workforce.
When Maile Carneige, became the CEO for GOOGLE ANZ , she admitted in an interview that she has to unlearn many of her previous leadership practices – that may have been best practice only five years ago. She realised that to succeed in her new role she needs to master some new characteristics quickly.
Experience in supporting new CEO transitions as part of the our consulting services shows that the role of CEO (also read Managing Director, Country Manager as titles to whom this equally applies) demands different leadership to the leadership required at any other career stage. Here are four areas that commonly show up for these individuals.
- Developing an intense sense of curiosity.
The economic world is changing so fast as society adopts technological and service disruptions. Traditionally, business disruptions happened in five to ten-year increments. Due to Internet 2.0, crowd sourcing abilities and crowd funding platforms such as KickStarter, today are taking two to three years and having international impacts with speed. Our recent experiences with Covid 19, has shown how disrupted the whole world can be within a four-month time period.
When warehousing industry leaders such as AMAZON announce they are targeting the healthcare industry, specifically the dental segment of that healthcare industry, as a future segment they want to dominate, then every business leader should be on notice that their industry is up for potential disruption. Curious leaders will actively seek to learn from as many different industries, leaders and other go to market strategies as possible. Staying pure to tradition and assuming that will work fine can only lead to economic threat for the company they lead.
- Connecting the dots
CEOs and other business leaders have an abundance of information. They often have too much information if anything.
Being able to stop, stand back from the deluge of data and take time to make sense of it all is a characteristic many leaders fail to amplify.
Distilling all the information into ‘What does this mean for our company…” is one of the most important practices for a new CEO. This includes being able to hold both short and long term views, which if course may contradict each other, is vital as they are responsible for guiding and directing the strategic implementation of short and long term strategies.
One question I regularly pose to clients is, ‘What would GOOGLE or AMAZON) do if it owned your business….’? There is no right answer of course but thinking about it means the leader is forced to connect dots they might otherwise ignore.
- Look, listen and learn…continually.
In the PALDER framework, highlighted in the ‘Foreigner In Charge’ book series, used supporting business leaders transitioning to new roles, the “Look, Listen and Learn” phase is a crucial step in understanding the organisational needs, the leader has inherited as part of their new role. This step requires the leader to take time to meet with a range of stakeholders, at the center and edges of the organisation to truly hear and understand what is happening for them.
A mistake often made by new CEOs is flawed thinking that once the strategy has been set there is no more need to engage with their stakeholders. Egon Zendher, the international head-hunting firm, ranks the ability to continually connect on a relationship level with stakeholders as essential for CEO success. Rajeev Vasudeva, CEO of Egon Zendher, said in an interview, the ability to continually connect “requires humility and emotional intelligence from leaders who are being asked to manage more diversity in the workplace across a mix of cultures and generations”.
- Building daily habits to ensure personal strength and resilience
The journey to becoming a successful CEO is a fast, furious and demanding one. Our experience shows that many new business leaders lose their energy and drive about 18 months after commencement. They will then leave the role within a year from that point. The well documented failure rate of CEO transitions backs up our anecdotal experience.
Successful leaders take time to build personal habits and disciplines that effectively and positively support how they actually consistently show up as a senior business leader. The world they lead in can be described as a VUCA world: (volatile, uncertain, complex and ambiguous). Therefore, the only thing the CEO can actually control is how they manage themselves and their behaviour.
Habits that underpin strong CEO performance include daily exercise and time reflecting on what has been done and what needs to be done. Regularly seeking feedback on their personal performance; spending time with the most important influencers and talent within the organisation and actively taking time to learn through reading or being coached. The 2014 study into Daily Habits of Exceptional Leaders demonstrated the consistency and efficacy of these habits across many industries and countries.
Assuming the most senior role in an organisation is a rewarding and fulfilling career step. It is also the most important leadership transition the organisation needs to support. A failed CEO impacts more than just the individual. It ripples to the wider organisation, employees, customers and sometimes entire industries.
Will you relish or perish?
If you would like to talk with us about how to best support the transition of leaders please contact us.