The dilemma for many new CEOs is knowing when to start making big decisions. With the benefit of hindsight, they often realise that first impressions counted for a lot and changes could have been made sooner. Still, when looking back, it’s easy to forget how much information needed to be absorbed during those opening few months and what was required to acclimatise to the role.
It’s a case of getting to grips with the board, investors, other stakeholders and, if coming in afresh from another organisation, understanding the dynamics of the business. Criticaleye spoke to a range of senior directors to uncover five key tips to both handle the pressure and make a difference when taking the hotseat:
1) Look, Listen and Learn
The first two to three months will require plenty of fact finding or, depending on the state of the business, myth busting. Alison Hutchinson, CEO of charity The Pennies Foundation, says: “Too many CEOs come in and state: ‘Right, I’m going to do this.’ They have perceptions of what they need to do, some of which may be correct, but I think it’s important they remember to listen and qualify their thoughts before they jump in.”
Customers, investors and employees, among others, will have to be engaged. “Of course, the board, as a key stakeholder, plays a very large part in that – a CEO will clearly need to understand their expectations and challenges,” she adds. “It is critical you understand facts rather than simply opinions.”
Steve Parkin, CEO of baby and child products company Mayborn Group, comments: “A new CEO who wants to create an agenda for change has to understand their business fully and have a feeling for the pulse of the organisation. Spending time with key stakeholders and understanding their views will be crucial, as the insight is normally found within the business.”
What you’re looking for is a balanced approach. Alison warns: “Don’t get convinced by perceptions until you’ve got a fact base that supports it, and make sure this comes not only from the financial data and the accounts, but from customers, employees and the board.”
2) Tackle the Big Issues
If there is bad news, take advantage of being new and get the difficult decisions out of the way. Matthew Wright, CEO of utility company Southern Water, says: “You have a moment of high influence as a new CEO but it can dissipate through time pretty rapidly. If you go in somewhere and don’t do anything for several months, it can be interpreted as a vacuum or that everything is fine.
“You have to effectively make your mark and concentrate people’s minds, particularly in terms of the company doing the right things strategically, and whether the right team is in place to take the company forward in the way you want. Frankly, if you’re taking a long time to figure those things out, I think that’s a mistake.”
Mark Allan, CEO of student accommodation provider Unite Group, says: “You’re not going to get another chance – or a better opportunity – to be able to look at the business with a fresh pair of eyes and examine its operations and culture.
“You’ve got to make the most of that because inevitably you get sucked into all sorts of other things and so you don’t necessarily have the time or inclination to think that way… Sooner or later you start to become part of the organisation, whereas you’ve got this opportunity [as] a new CEO to have a slightly removed, objective view.”
3) Make Time for Strategy
The danger for any CEO is that they are stretched too thinly, so they end up fire-fighting and dropping down into the business to address operational issues. Steve says: “You are always concerned that there are financial results due and initiatives that need to be delivered, and the clock never stops.
“So one of the biggest challenges is time and trying to have the ability to reflect. You move from being the doer to the leader, and therefore you must concentrate on finding the space to think about the business.”
Martin Balaam, CEO of IT solutions company Jigsaw24, says: “Being able to filter through the sheer volume of information and data that you take in – every document, report, presentation, brochure and invoice – is challenging.
“There are also customers, team members, shareholders, all those interactions and experiences which are new. You have to be able to find the key themes and focus on what’s important as the business is looking to you for leadership.”
Paul McNamara, Group Chief Executive for financial services concern IFG Group, says: “There’s too little time. You have a lot of demands on the calendar so finding space to focus on what’s important rather than just what’s urgent is crucial.”
It’s one of the reasons why building the right senior executive team is vital if you’re going to be able to execute on the strategy.
4) Don’t Act in Isolation
The intense scrutiny of a new CEO, particularly if it’s your first time, will require some getting used to and it’s a mistake to believe you won’t, on occasion, benefit from the advice or experience of someone else.
Matthew says: “What is a surprise, and you don’t quite appreciate this until you are the CEO, is this thing of the buck stopping with you – it is quite a big deal. You feel a [greater] sense of accountability as a CEO than you would in any other line management role…
“You feel the highs and lows and they’re more inextricably linked, I guess, with your own reputation and standing, which means everything is magnified… If you’re on the executive management team there are people to share that burden, although certain issues may or may not relate to your area of the business. If you’re the CEO, every area is your business.”
It can be a challenge to prepare for this shift in accountability and perception. Mary Jo Jacobi, Criticaleye Board Mentor and Non-executive Director of engineering business Weir Group and financial services firm Mulvaney Capital Management, says: “Colleagues are no longer equals; you’re on a different level now and people will relate to you differently. It can be difficult to know where to go for advice and who to trust.”
Paul explains that it’s important not to underestimate the extent to which you can reach out for support: “There is external mentorship, the chairman and key individuals who [can] be trusted to stand back and look at the business in a new way… It comes back to that point about making time to, A, understand the business and, B, to find the space to think.”
5) Know How to Influence
An effective CEO will bind people together by creating a common purpose. This involves good communication and an appreciation that an authoritarian style won’t be beneficial for the business.
According to Andrew Minton, Executive Director at Criticaleye, a first-time CEO will often experience mixed emotions: “There is the sense of achievement at reaching the very top of the executive ladder, but then comes the reality check that all eyes are on you. It can be daunting as the way you influence and communicate as a leader will be completely different to what you will have experienced in previous roles.”
Mark comments: “It’s almost inevitable you will have come from an area with some degree of functional expertise, but you will be taking responsibility for the business in a much broader sense, including areas where you won’t have managed before.
“You need to let go of your previous specialism so you can spread your time effectively across the other functions, but also so that your successor doesn’t feel that they’re being constrained by your track record.”
It’s a case of knowing how and when to step back. “You’ll clearly have some early views on what you’d like to do,” says Paul. “But testing that, checking its validity, seeing if there’s something new you weren’t aware of that needs to be integrated into your thinking, and building a consensus in the leadership [around] the core agenda, are absolutely essential.”
Mary Jo says: “One of the most difficult aspects of being a CEO is learning how to let go of doing and managing, and starting to lead. The role is to encourage others to perform well, to deliver results, to be accountable, and to live the organisation’s values. You have only a short time to articulate your vision and start delivering it.”
I hope to see you soon.