“I wish I had understood how different the job was before I started.” – Paul Foster CEO, Sellafield
As an executive onboarding into a new role, do not trust your first impressions and instincts. This is what Nobel Laureate, Daniel Kahneman describes as intuitive thinking and is a recipe for disaster – especially as a new CEO. Instead, stop and apply more deliberate thinking to create the personal onboarding plan your completely different job and situation requires in addition to your enterprise plans.
Neal Kissel and Patrick Foley from Marakon Management Consulting at CRAI shared some ideas with me that you may find helpful. They suggest new CEOs focus on strategy development and execution, resource allocation, performance management and people choices.
Here’s what they learned through interviews with 20 current and former CEOs in late 2018 including Mark Tucker (HSBC, AIA), Bill Winters (Standard Chartered), Rob Peabody (Husky Energy), Nancy Southern (ATCO), and Paul Foster (Sellafield), among others.
About 50% of CEOs from large public companies say that the role was “Not what I expected beforehand.” This may explain why so many new CEOs fail early on. Among the biggest mistakes that can cause new CEOs to stumble:
- assuming the role is a “bigger” version of what they’ve done before, and that success will come from doubling down on what worked in previous roles, when the job is in fact fundamentally different;
- not focusing enough on managing stakeholders (internal and external) which is as, or perhaps more, important than hitting financial targets because it buys you time;
- failing to move fast enough on getting the right management team in place;
- managing their time, but not managing their energy, when it’s the latter that really matters for personal success;
- spending too much time micro-managing, trying to be a “player” rather than a “coach”;
- not understanding, managing and leveraging the information mismatches that inevitably exist “downwards” between CEOs and their direct reports, and “upwards” between CEOs, Boards, and external stakeholders; and
- failing to fully exploit the limited number of levers in their complete control – vision/strategy, resource allocation, key hiring decisions, and performance management.
These issues could be primary reasons for the high turnover among CEOs – from 2013 to 2017, more than 280 chief executives in the S&P 500 left their jobs. To counteract that, Kissel and Foley suggest five mutually reinforcing elements of a successful personal strategy as CEO:
Focus your energy on what really matters for your new role (and understand the difference between time and energy.)
- In particular, focus your own time and energy on high-value issues and delegate low-value issues to others. They still need to get done – just not by you.
Organize around a clear framework to manage the multiple sets of stakeholders i) board, ii) external stakeholders such as investors, media and government, iii) organization.)
- Build and maintain strong one-on-one relationships with individual board members, spending at least 20-30% of your time here.
- Maintain contact with investors and other external stakeholders, such as customers, media, industry, government and regulators to seek input and guidance and build alignment for your vision and strategy as appropriate, spending 20-30% of your time here.
- Organize so you have clear lines of sight into different business lines and support functions and can hold members of your management team fully accountable for their areas of responsibility, so this takes no more than 50% of your time.
Leverage the power your new role gives you over information flows.
- Control information flows up and out of the business so the way others interpret your short-term results does not derail your long-term vision.
Be a coach, not a player with your management team; and move fast(er) to get your team in place.
- Make it safe for people to ask for your input early and
- Get the right team in place now. All the CEOs they interviewed wished they had “acted faster” on people moves.
Deliver better results faster:
Fully exploit the four key corporate levers that are now in your direct control:
- Strategy Development and Execution to create profitable difference from competitors.
- Resource Allocation to achieve your goals and how to respond to both expected and unexpected market developments.
Operational/Milestones and Early Wins:
- Performance Management, holding people accountable.
- People Choices, moving faster.