Between a third and half of new CEOs are considered to be failing within 18 months of taking the role. More than 90 percent of those CEOs confess that they wish that they had managed their transition differently. Those who got it right recognized that they needed to lead differently than they did on the way to the top.
The best new CEOs make their first six to 12 months both a personal transition and a moment of institutional renewal. While each leader acts in ways that are relevant to their unique situation, we have found that there are at least four common ingredients for success.
Not making it about you
The day you become CEO you undergo an enormous amount of change. For one, all the attention becomes laser-focused on you, often in ways that distort reality. All this attention and power can quickly create a phenomenon where the transition becomes all about you. Successful CEOs don’t let this happen. They keep their minds focused on the institution. “Every time you say or do something,” says DBS Bank CEO Piyush Gupta, “it’s got a massive consequential effect. The whole company pivots.”
The way to manage this experience is to ask different questions, which lead to different answers:
- Instead of asking ‘What legacy will I leave? ask ‘What organizational purpose do I serve?’
- Instead of asking ‘What is broken that needs fixing? Ask ‘How will we respect our past while accelerating or disrupting our future?’
- Instead of asking ‘How will I get the organization on board with my vision? ask ‘How will I engage the organization in creating our shared vision?’
This shift of perspective will ensure that your tenure as CEO is about the company and not about you.
Listening then acting
As a new CEO, everyone wants to hear what you think, what will change, and what the change will mean for them. The urge to decide, declare, promise, and explain is strong. The best leaders in transition know that it is better to listen and find out what is really going on before making broad declarations or premature moves. The paradox is that you need to move slow, to move fast.
“One needs to be a good student because there are a lot of things one can learn,” says Keppel Corporation CEO Loh Chin Hua.” It is always very easy to learn from someone who is well known, famous, and successful, but I subscribe to the school that there are things you can learn from everyone, even someone younger than yourself.”
Practically speaking, this ethos translates to the following practices: start with a broad-based listening tour; create a fact-based, single version of the truth; lock in a short list of bold moves; and communicate those moves in a simple, engaging manner.
Nailing your firsts
You never get a second chance to make a first impression. Getting your first impressions right will send strong messages about how you intend to lead. These include the differences from the previous CEO and from how you have led in previous roles. It also includes the renewal opportunity you see for the organization. Early in your tenure, everyone, even those you have worked with for years, is forming their first impression of you as the CEO. To ensure that your first impressions are positive, you need to understand people’s motivations, keep to a single narrative, err toward complete candor, and prepare intensely for moments of truth.
“If you come in new, it is easy for the cynics within the business to say, ‘This person really doesn’t understand why we do things in a certain way, so we will sit back and watch them fail,’” says Alison Watkins, who is a board member of CSL, the Reserve Bank of Australia, and Wesfarmers said in a recent interview with McKinsey. “I remember getting that feeling in a few settings. You then have to work extra hard to build the credibility. And that comes from being able to listen, learn, and respect, which builds the confidence of the organization.”
Playing “Big Ball”
New CEOs suddenly find themselves accountable for everything and to everyone. While it is tempting to try to do everything, this is wrong. You need to decide where your effort can have the most impact. To do this well, you need to set clear boundaries and stay extremely disciplined. You must also have the right talent in place to help you—while being willing to drop underperformers. Finally, you must set an operating rhythm that combines accountability with urgency.
“It is very easy to feel like you have to work really hard, impress people, and sacrifice the balance in your life. [But] if you have the right balance in your life, you can deal with pretty much anything that comes your way,” says Watkins. “[Another] piece of advice is to work with great people. All my opportunities and development came from people, not so much the organizations.”
Your ascension as a new CEO is an unfreezing moment that can catalyze significant institutional renewal. By not making it about you, listening then acting, nailing your firsts, and playing big ball, you’ll soon hit your stride.