You have been appointed as the new CEO of your company – congratulations! Whether you’ve come in from the outside or risen from within, your role will be completely new to you. As CEO, your influence and responsibilities will extend to the whole company, from customers to staff, from finance to production and from partners to the Board of Directors. As you should be, you will be excited about your new challenge. In this article, we have listed some thoughts from other (recent) CEOs, from which you may be able to pick up something for your own thinking!
Get to know people and listen
If you’ve spent any amount of time in the company, you’ll know a lot of the staff. You will also be familiar with the company’s culture, general policies and decision-making. However in your new role, it’s good to take a fresh, broader, view of things. It can be difficult because it’s easy to think you know the whole company inside out. Remember that you’ve looked at the company from a different perspective before, so take this as a great opportunity to reacquaint yourself.
If you come from outside the company, learning something new is more natural and “forced”, as you may not know any of your new colleagues. In any case, talking to people and a genuine desire to learn will help. Depending on the size of your company and your team, this may initially only mean the board, the management team and those reporting to the management team. In a smaller company, you may be able to get to know almost every team member in a short time. Listen carefully and start to form your own opinion of the company.
Internalise your new role
As CEO, you can’t do everything yourself, but have to indirectly influence the direction and priorities of your company: creating and communicating strategy, setting up processes and focusing the organisation’s attention on key areas. By doing your part, you help create a working environment where everyone can excel, make the right choices all the time and continue to develop. Your words and actions shape the company culture and values by which you expect others to behave.
One of the most important ways you can make a difference is by recruiting the right people and shaping the most productive roles for them. It’s great to find colleagues who are passionate about the direction you set for the future and are extremely talented. It is possible, and sensible, for you to stay out of the way.
So don’t be tempted to go off and solve every problem that comes your way. And don’t grab at every fly in the ointment. Let your orchestra play – you are the conductor.
Identify the downsides and potential burdens in advance
You’ve probably managed people before, or even been CEO of another company. Leading a team is challenging, yet the role of CEO raises the odds of both challenges and, correspondingly, rewards. You’ll also get to learn even more about leadership in this non-college position. You’re the face of the company and all the people around you, from customers to employees and suppliers to partners, will be watching your every move.
Especially at the beginning of your tenure, employees will be curious about your management style. What kind of tone of voice do you have? What changes will you make to the culture? Will your strategy change? Will you reshape your management team or interim management? Will you reorganise? In any case, everyone expects you to have a strong will to move the company forward.
For many (new) CEOs, the demands of the role, time constraints and lack of information come as a surprise. Similarly, changing employment relationships can pose challenges for former colleagues. Unfortunately, the CEO is also a rather lonely role without a direct colleague. Recognise this in advance and remember that you are human too.
Try to form an objective picture quickly
The scarcity of (factual) information mentioned in the previous paragraph may come as a surprise. Therefore, learning, further questioning and delving into selected topics are necessary in order to build up an objective picture of the state of the company. In addition to listening, it is also useful to use your other senses: reading and observing. In a situation of change, people are always emotional, and this should be borne in mind. CEOs who have come from within tend to have to fight more resistance to change – at least in their own minds.
Try to start forming a factual picture as soon as possible, so that you don’t lose precious implementation time and you have a more solid basis and rational arguments for your future decisions. This will also reduce the likelihood of making bad decisions.
What does profitability look like? Cash flow? What is the financial structure? Is the business investment-intensive in nature and are there investment projects underway? Is the company able to move forward with projects currently on the table?
Quickly identify cause and effect relationships and the key drivers of business. It can be fatal to stare only at the financial figures, which are history and reflect the bottom line. Is the cause, for example, a decline in turnover:
- A low number of client meetings?
- Poor bid win rates?
- A prolonged sales cycle?
- A lower price?
- Increased churn?
- Reduced incremental sales?
- Something else?
Without identifying the root causes, you won’t be able to target the next corrective steps in the right place at the right time. In the worst case, you lose time and money.
Clear common direction and goals
Once you have a deep enough understanding of the company, its situation and the team, you will start to turn the conversation to future changes and a new direction for the company. It’s important that you and your management team believe 100% in your plan, as you will ultimately be responsible for its implementation. There are many ways to do strategy work and you usually can’t go wrong by involving your staff. As CEO, you are also the media, the messenger and the receiver at the same time. So be open to debate.
It is also useful to break down the new vision for the future of the company into time-bound roadmaps. What will be done in which order and why? Quick, short-term wins give the team hope that the goals are being met and the plan is working. Long-term, even dreamy visions of the future may otherwise remain too elusive.
The new direction should be communicated with extreme clarity and there is no harm in repeating things even to the point of your own boredom. It is important to think carefully about the indicators that support implementation, but only the most essential ones, and to monitor them unambiguously. As a fresh CEO, it is tempting to measure everything possible, however at worst you will micromanage your company to death. The wisdom is to choose the right metrics and focus only on what matters.
Take the first steps and communicate progress
Taking the first step is always the most challenging. Keeping things moving is easier than getting them moving. Identify the specific things you need to start moving forward on and act quickly. For new CEOs, two psychological barriers have been identified as limiting the start-up process: 1) they expect to have all the complete information 2) they expect to have a complete plan. Both are paradoxes in themselves.
As a new leader, you are expected to deliver fast results and progress. The sooner you get to try and test new ideas, the sooner you will have the right data and real-world feedback to guide your actions.
Put a management system in place to support implementation
Who has previously approved or rejected which projects? On what basis are decisions made? Which issues do you bring to the board for approval? Who gives their opinion on which issue? In what situations do you give your own board members decision-making authority?
The word ‘governance’ may sound rigid, yet the truth is, at best, the opposite: everyone in the company knows what we are trying to achieve, how I, along with others, contribute to the big picture and on what basis decisions are taken in any given situation. Unfortunately, it is often the case in companies that it is generally assumed that everyone knows what everyone else is doing. Only later, even too late, do we find out that “the wires were cut”.
Think of the management system as a machine of which you are not a part. Otherwise, the system is totally dependent on people, and usually on you, as the CEO, in a glue-like role between the different parts. However, this does not scale, you become a bottleneck and the company does not move in the direction you set out in the previous point. To build a working machine, you need planning, the right people, processes, tools, information and the right leadership. That’s how you get everyone rowing in the same direction efficiently and without friction. It doesn’t sound like rocket science, but it’s practically challenging and often the key to success.
Create a culture of transparent information
Changing your culture takes time. If and when you want to create a culture of transparency, think about how and with what tools you will bring it into your toolbox from the start. How do you communicate progress to employees honestly, openly and transparently? Where and how can they monitor the progress of your joint company? How will they know if they are making progress towards their own goals? How do you share information about your profits? How do you ensure that the direction remains clear and the agenda does not start to wander?
Even if you are a media person, think about how you can multiply your impact and reduce the dependence on you. Remember that while you’re ready to move to step three of your plan, you’re still in the back row exploring step one. The foundation of any relationship is trust, which springs from honesty. Even in difficult things. So think about how to ensure an open and honest picture for everyone, so that the culture can evolve in the direction you want.
Remember you are not alone
As you can see from this text, your job is an extremely broad and responsible one. You can’t do it all alone and that’s why you have a team to support you. However, very rarely does a new CEO think that help is available outside the company, even at the very beginning of his or her term of office. In SMEs in particular, it is often the CEO who is saddled with the management responsibility, and it is naïve to expect him or her to have the answers to every challenge the modern world throws at them.
So talk to your advisers, fellow CEOs and coaches. Don’t be left alone. Other perspectives and opinions are needed, even if you ultimately make the decisions. In the best case, outside help will multiply your own influence 10-fold. And no one, not even your government, assumes that you alone can get it all done. Consider also the passage of time and the pace you are seeking: will you wait the famous 100 days before you start going through the issues in this article, for example, from point 2 onwards, or would objective outside help speed up your journey towards your goals? You only have 24 hours in a day. Which is the more important question:
- What exactly will you alone achieve in the first 100 days?
- What will your company achieve in the first 100 days?
Be yourself and enjoy!
Being a CEO is an honour and a great one. So make sure you enjoy the journey too! Show others that you are wholeheartedly on board and ready to take the company on a year-long adventure. Even if at times you will become healthily overwhelmed in your role, remember that you are only human. At worst, you will destroy your company and yourself by overworking, becoming cynical, arrogant and running yourself ragged. A healthy daily routine is the lifeblood of making good decisions.
Remember, too, that you are you and no one else. So do work that looks like you.
Further reading for the new CEO:
- McKinsey – Transitioning into the CEO role
- Vistage – 6 areas to focus on as a first-time CEO
- Business Insider – 5 things new CEOS should focus on
- Inc. – 4 Things Every New CEO Should Do in the First 60 Days
- CEO Mastery – What Should A New CEO Focus On?
- The Business Journals – What to focus on as a newly-appointed CEO
- The CEO Magazine – What is the First Thing a New CEO should Do?
- HBS – The Seven Things That Surprise New CEOs
- Forbes – Where Should A New CEO Focus First?