Management Perspectives

Becoming CEO is a dream for most ambitious executives. But, all too often, this dream turns into a nightmare because new CEOs regularly fail, with their tenure often lasting less than two years, sometimes just months. Take, for instance, Leo Aoptheker at US electronics giant Hewlett Packard, John Flannery at GE, or Jennifer Morgan at German software powerhouse SAP, all of which remained in the CEO role for less than 18 months. While some manage to get on even better than before, more often the results are disastrous for both the company and the career of the CEO. So, is there something new CEOs can do to improve the odds of success? This short article will highlight the main steps that many successful CEOs have followed and that, to one degree or another, can be replicated in most organisations.

Managing the transition
While it takes years for a CEO to properly come onboard, and also takes years to determine whether a CEO tenure has been successful, the initial months if not days can set a new CEO’s tenure onto a path of success or failure. In fact, often senior leaders around the CEO, as well as the public are even capable to anticipate the outcome based on the CEO’s early behaviours. Successful CEOs, we have observed, often tread carefully in their initial tenure rather than trying to impress by bold action that turns out later to be misguided because the CEO did not understand the task ahead or the company itself yet.

When a CEO is appointed, the whole organisation looks at him/her for direction and guidance. Yet, CEOs coming from outside do not know the organisation well and even the knowledge of a CEO appointed from inside may be overestimated in case of large organisations, such as a conglomerate. Often, first time CEOs might find that this step is one of their most challenging career steps. One former CEO we interviewed admitted that once appointed, he realised he was an insider outsider and a whole new set of information suddenly unveiled, creating a mismatch between the board’s expectations and his real position. New CEOs are, therefore, well-advised to use any time between appointment and starting in the position to prepare—initially listen rather than speak, focus their communication on establishing their personal CEO brand, and selling their strategic agenda rather than engaging in specific actions. For instance, when Mark Schneider joined global food giant Nestlé in 2017, despite intense pressure by an activist investor, he spent almost half a year to familiarise himself with the complex company.

Building the personal platform
CEOs are only as strong as the organisation they lead. Successful CEOs must build a personal platform within the organisation that is both wide and deep enough to enable them to drive their strategic agenda. Central to this personal platform is a strong core team that can develop and deliver a compelling strategic vision and a network across the organisation that will allow the CEO to connect to information.

To build a strong core team, new CEOs may need to start from critically evaluating the existing set of company leaders and not be shy to make changes. Such changes should be guided by the needed level of competences—who is fit for the future and should lead to the creation of a team that reflects a performance culture rather comfort-from a set of familiar people.

While the top team is important, alone it is not enough for success. In fact, CEOs who rely only on their top team may be isolated from their organisation and may only receive filtered information. Therefore, CEOs are well-advised to develop direct relationships with people across all levels, functions, and geographies of the organisation to gain access to an unfiltered organisation and hear what is really going on around them.

Driving results
The third step of a successful CEO playbook involves driving results to implement a strategic agenda. Successful CEOs start by defining and communicating a vision that engages the whole organisation. Also, if they really want to leave a mark and truly change the organisation, they also tend to identify and create strategic visions that speak to the heart and mind of people, as well as engaging the whole organisation rather than only the top team. For instance, Vas Narasimhan was appointed to CEO of Novartis, and his strategic goal was to change the culture towards a less centralised and more entrepreneurial one. To do so he created the idea of ‘unbossing the company’-a vision that engaged people at all levels.

Defining and communicating
a vision is the first step towards results, but by itself, it is not enough. To have impact on the organisation a compelling vision needs to be supported by a set of leadership behaviours that are coherent with the vision itself and model the behaviour the CEO wants to achieve. Leaders who tell one thing and act in a different manner have their bluff called quickly and lose the support.

While most CEOs are action-oriented, driving results often forces a degree of patience that might not come naturally to senior executive. Achieving strategic goals and changing an organisation does not happen overnight but often requires the new CEO to initially hold back and focus on a limited number of priorities and then carefully orchestrate a sequence of actions that do not overload the organization. Driving results as a CEO can therefore been described as running a marathon through a series of consecutive sprints. And like any endurance athlete can tell, that requires careful pacing, understanding when to increase the pace, when to keep it steady and when to even temporarily slow down to conserve energy.

While no two CEO tenures are exactly the same, successful CEOs can help themselves by employing the above, simple principles, consistent application of which, can make the different between success and failure during a new CEO’s tenure.