First-time CEO transitions are more complex than most anticipate. On the one hand, 40% of all new leaders fail in their first 18 months. Couple that with the massive difference between the CEO role and any other role and you get even greater risk of failure for first time CEOs. This is why it’s so important to ease first time CEOs into their new roles, ideally with the CEO Transition Three Step:
- Fuzzy Front End. New CEOs named, but not in job yet.
- Early Days. New CEOs in job. Prior CEOs still around office as Board Chair.
- Full Stride. Prior CEOs still Board Chair, but not in office.
Fuzzy Front End
The Fuzzy Front End is the time between new CEOs being named and actually starting their jobs. This is a chance for new CEOs put in place their own personal 100-day action plans, jump-start new relationships, and build their own strengths.
Personal 100-Day action plans for new CEOs should map out their internal and external stakeholders, their own messages, and communication plans for the time before they officially take over, their early days, and first 100-days. Additionally, they should map out their personal development plans.
Personal Development Plan
Strengths are a combination of innate talent, learned knowledge, practiced skills, hard-won experience, and craft-level caring and sensibilities.
Talent. Innate talents are what they are. They’re not going to change. Still, it’s important for new CEOs to own their talents and not try to be anything other than what they are.
Knowledge. They can learn a lot during their Fuzzy Front End, especially around:
- How the board works and how the current CEOs works with the board
- How the current CEOs works with other key outside stakeholders including investors, analysts, customers, and collaborators
- How the current CEOs works with the executive team and other internal stakeholders
Skills. Newly named CEOs can use this time to practice their communication skills, especially with regard to their boards, and key external and internal stakeholders. Even if newly named CEOs have communicated with these groups in the past, it wasn’t as CEO.
Experience. Closely related to practicing skills for people promoted from within is gaining specific experience by running portions of some of the board meetings, and sessions with external and internal stakeholders.
Craft. Craft-level caring and sensibilities are built through apprenticeships. For newly named CEOs, apprenticing to outgoing CEOs means spending time with them during the Fuzzy Front End and early days.
Decision Rights
Just like only one person can be flying a plane at a time. Each organization is best served by one CEO at a time. Thus, it’s important for newly named and outgoing CEOs to coordinate decision-making. One way is for the current CEOs to own all decisions that impact current things – current execution, and the newly named CEOs to own all decisions that impact things that will happen after they take over – future plans.
Early Days
It’s often helpful for prior CEOs to stick around for a period of time after the new CEOs start. Certainly Ajay Banga appreciated Bob Selander doing that when he took over at MasterCard. In this case, they created a second Fuzzy Front End for Banga by his joining the company as COO for six months before officially taking over as CEO.
The upside of being present is that prior CEOs can sense what’s going on with the organization and give new CEOs real-time coaching.
The downside risk is that some people will still go to the prior CEOs for input and decisions.
Prior CEOs have to be disciplined and committed to making it work. They should have temporary “guest” offices and not attend key meetings to give new CEOs space to establish themselves.
Full Stride
Once new CEOs hit full stride, the prior CEOs need to end their day-to-day presence. While they’ll still advise the new CEOs, now they’ll do it behind the scenes as needed in addition to their full participation in board meetings.
Don’t read this wrong. New first-time CEOs will need ongoing help and assistance from a whole range of people. The outgoing CEOs are just som of them – but they can be really important and valuable models, mentors, and coaches.
