The first months are crucial to a CEO’s tenure, but bold and decisive action designed to leave your mark may not be the best way forward. Marianna Zangrillo and Thomas Keil, co-authors of The Next CEO, present five tips to help new CEOs build the foundation for later success
The long-desired job as CEO finally arrives, after years of hard work and sustained performance. Yet, for many new CEOs, it is actions in the first months that can make or break their chances of success. In this, traditonal advice may not always be the most effective and instead, seemingly counter-intuitive measures may bring a better outcome.
For example, new leaders are often advised to take bold actions during their first 100 days. While this may be the best option when a company faces financial distress, or in the case of an internal CEO appointment, this often increases the risk of failure.
With that in mind, here are five principles for new CEOs to take on board as they seek to take charge of an organisation successfully.
1: Preparing for day one
Successful transition into the role of CEO relies on preparation. New CEOs are well-advised to use any time between the appointment and starting the job for intense preparation. For external CEOs especially, this is a time to get to know stakeholders, the future management team, and the financials of the organisation. However, CEOs appointed from inside the organisations are also well-advised to deepen their understanding of areas/departments they have not previously been actively involved with, as surprises can often surface.
The more prepared the incoming CEO is, the better their actions will be early on. For example, when Olaf Swantee was appointed CEO of UK telecommunications company, EE, he identified a business challenge the organisation was already grappling with before day one. That allowed Swantee to establish his focus on getting things done very soon. Similarly, Vas Narasimhan, the internally appointed CEO of Novartis, used the time between his appointment and day one to engage leaders across all businesses and start defining the strategic agenda that drove his first year at Novartis.
2: Day one: every word counts
You usually get just one opportunity to make a first impression, and this general rule holds true for new CEOs too. When a new CEO is appointed, everybody has expectations and carefully listens to every word the new CEO says. As a result, communications on day one can be a powerful device to set the direction and agenda of the CEO’s tenure and should therefore be carefully planned out and never delegated. However, this is also a moment when a new CEO, especially one hired externally, may still have limited knowledge about the organisation and the directions to be taken. Communication should therefore focus on setting the personal tone and signalling the strategic focus of the CEO.
3: Define your CEO brand
CEOs will always be identified with the themes they promote and with the approach they take in delivering messages and driving their agendas. Initial communication, and initial actions in particular, signal what the CEO stands for and define a CEO brand.
Communication is relevant both for strategic themes such as growth, transformation, or cost focus, and also for personal values such as approachability, communication style, humility or aloofness, arrogance, and inability to take criticism. To establish the CEO brand, actions always speak louder than words. For instance, when Jonathan Lewis joined [the now defunct] UK oil services company, AMEC Foster Wheeler, he not only communicated from the outset a focus on cost but also sent a wider message on what he stood for in terms of acceptable behaviour by refusing the brand-new company car and cutting executive dining and flight privileges. This is very different from the case of another new Fortune 500 CEO who declared a focus on cost at the same time as posting a job ad for a personal hairdresser for the company jet. This story naturally made headlines well beyond the organisation.
4: Listen rather than speak
From day one, the appointed CEO will be looked to for decisions and direction. The first months, however, should be about listening and learning rather than speaking to gain a deeper understanding of all parts of the organisation. To do this, new CEOs must engage with all stakeholders, including customers, partners, suppliers, employees, board members, shareholders, and bankers. The learning process should also be complemented by conversations with staff who are not their direct reports, to ensure that they gain unfiltered information from across the organisation.
5: Controlled action
Finally, while the initial period for any new CEO should be focused on learning and preparing for what is to come, some carefully planned action is advisable. Some may simply be forced on the new CEO by the situation, for instance, when the resignation of a top management team member requires a fast replacement. Other, symbolic actions may also be pursued to establish the CEO brand and signal their strategic agenda. However, any action taken early into a CEO’s tenure should be designed to focus on quick and needed wins and not constrain future options while a new vision and broader strategy are still being formulated.
The initial months may very well be the most important time of a CEO’s tenure. The pressure is on, expectations are high, and there is little room for error. While most CEOs are action-oriented and eager to leave their mark on the organisation, this may be the time to control their reflexes and measure both what is said and done. Instead of making a splash that may backfire rapidly, this is the time to build the foundation for later success.
Marianna Zangrillo is a business angel and investor with experience in companies that include Nokia, Swissport, and Infront Sports.
Thomas Keil is a Professor at the University of Zurich, where he teaches strategy and international management.
Marianna Zangrillo and Thomas Keil are co-authors of The Next CEO: Board and CEO Perspectives for Successful CEO Succession (Routledge, 2021).