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How can new CEOs avoid failure?

Leadership + Management

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Taking up a CEO position in a company can be a daunting experience. Many new CEOs are not aware of the fact that the new role requires a different strategy to what worked before as the CEO job is not just a bigger version of their current role.

Marakon’s Neal Kissel and Patrick Foley have built a framework for understanding the unique requirements and challenges of the CEO role. The management consultants interviewed 20 current and former CEOs, successful ones as well as CEOs who quickly lost their position again. Amongst the interview partners were Mark Tucker (HSBC, AIA), Bill Winters (Standard Chartered), Rob Peabody (Husky Energy), Nancy Southern (ATCO), and Paul Foster (Sellafield).

Kissel and Foley found that most CEOs found the transition difficult, maybe underestimating that they needed a different strategy to the one that worked beforehand. “They fell into the trap of believing the job was simply a bigger version of their current role”, the authors wrote.

The more experienced CEOs they met had learned over time to fundamentally rewire their thinking for the distinctive requirements of the role and after talking to them Kissel and Foley were able to identify five mutually reinforcing elements of a successful personal strategy.

1. Focus your energy on what really matters for your new role (and understand the difference between time and energy).

2. Organise around a clear framework to manage the multiple sets of stakeholders (mastering three-way management).

3. Leverage the power your new role gives you over information flows.

4. Be a coach, not a player with your management team; and move fast(er) to get your team in place.

5. Fully exploit the four key corporate levers (vision and strategy, resource management, and people) that are now in your direct control.

About half of the CEOs from large public companies admitted that the role was not what they had expected beforehand. This could explain why quite a considerable number of new CEOs stumble early on.

Among the biggest mistakes the authors identified were:

  • Assuming the role is a “bigger” version of what they’ve done before
  • Not focusing enough on managing stakeholders
  • Failing to move fast enough on getting the right management team in place
  • Managing their time, but not managing their energy
  • Spending too much time micro-managing, trying to be a “player” rather than a “coach”;
  • Not understanding, managing and leveraging the information mismatches

Read more on www.marakon.comwww.forbes.com