40% of new leaders fail in their first 18 months because of poor fit, poor delivery, or a poor ability to adjust to changes down the road. The fit risk is especially strong for CEOs taking over from founders. Those that disregard the founder’s legacy, alienate key stakeholders, neglect relationship-building, or move too hastily are doomed to failure.
Instead, the path to success goes through the seven stages of executive onboarding with a particular emphasis on focus and trust. Focus on the mission and culture to set up evolving strategically. Make integrity and respect priorities to build enduring trust.
Focus – Mission and culture
New CEOs took over from founders twice at each of Apple and Google: First John Scully from Steve Jobs, and then Tim Cook from Jobs at Apple, and Eric Schmidt from Larry Page and Sergey Brin and then Sundar Pichai the second time around at Google.
Cook and Pichai respected their founders’ values and influence, while strategically evolving their organizations. They maintained the core of their innovation-driven cultures, with Cook fostering inclusivity and Pichai emphasizing empathetic leadership. They recognized their founders as culture creators and embraced their roles as cultural stewards.
In contrast, Scully’s corporate approach from Pepsi clashed with Jobs’ product-centric culture
Trust – Integrity and respect
Schmidt and Cook built trust through transparency and collaboration. Schmidt formed a triumvirate with Page and Brin to make key decisions together. Cook invested all sorts of time in keeping Jobs in the loop and leveraging his passion.
Additionally, Schmidt and Cook clarified their roles versus the founders’ role in a way that respected each other’s differential strengths. They were each able to balance innovation with operational discipline. Schmidt professionalized Google’s operations on the way to its IPO while continuing to support bold bets. Cook optimized Apple’s supply chain while keeping the core product-focus in place.
On the other hand, Scully eventually forced Jobs out and failed to maintain trust with the board and
employees, contributing to his ouster.
Implications for CEOs following founders
The fundamental prescription for executive onboarding plays out through seven stages for any new leader: marketing, selling, buying, preparing, converging, evolving, and adjusting in that order. CEOs following founders should pay even more attention to focus and trust while converging and evolving.
1. Focus. Make sure you and the founders are aligned on the organization’s mission and current culture, and, especially, the organization’s core focus (design, production, delivery/distribution, or service.) That gives you the platform to evolve the strategy, organization, and culture over time.
The organization’s over-arching mission – why you do what you do – should probably not change. Similarly, your core focus and bedrock values should also not change as those are part of what the organization stands for and who it is.
On the other hand, you must evolve your strategy in response to changing conditions in the world. And your organization must evolve in line with your strategy.
2. Trust. Over-invest in building relationships and trust with the founders and other key stakeholders. Have a bias to more transparency and collaboration. Be trustworthy on two dimensions: 1) having others’ best interests at heart and 2) demonstrating the capability to do and get done what you say you’re going to do and get done.
Clarity on roles, responsibilities and accountabilities is part of this. Split responsibilities in a way that leverages each leader’s unique strengths. You’ve been brought in to do things the founders either cannot do or choose not to do. Get clear quickly on what you and the founders should do on your own, together, or not at all.
The way you delegate builds trust. The way the founders and board delegates to you builds trust. The best delegation includes inspiring direction, enabling resources, empowering authority, and credible accountability.
Converging into the organization and aligning with the founders is about fit. Doing that well is the essential foundation to being able to get done what you need to get done. And building relationships throughout the organization leads to others being able to tell you about the changes in the world they’re seeing so you can adjust.
