This article by Kathryn Yap, Managing Partner, Singapore at CTPartners first appeared in The Business Times of Singapore on April 6th, 2013.
Recent research by Insead shows that the top 100 CEOs from around the world delivered, on average, and impressive total shareholder return of 1,385 per cent during their tenures and increased their firms’ market value by $40.2 billion.
Indeed, many of those who we see appointed into CEO roles hope to make such a significant impact on their organisations and find that the first 100 days are often a rite of passage towards success or the start of a bumpy road.
CEOs are ultimately measured by their ability to resolve issues, set strategy, grow the business and achieve objectives. The first 100 days are a time for making careful assessments about the task ahead, and winning the trust and confidence of key stakeholders before implementing changes.
First 100 days
Wider stakeholders and investors, and even the chairman, may use this early period to determine whether their new CEO is off to a good start, and how he or she is faring as a leader. We have seen how such evaluations can impact a company’s stock price, positively as well as negatively. Therefore, it is important to formulate a communications strategy and timetable quickly. In the very early stages, it is crucial for CEOs to size up the organisation and its people. Failing to understand the business and failing to develop the right relationships can undermine the position of any new executive, and ultimately, the company’s performance.
At CTPartners, we find that the typical concerns of those who take on the CEO title, whether for the first, second or third time, will surround how they can transition into their new roles smoothly. Whether it is an internal promotion or an external appointment, moving into a CEO role is certainly not the same as moving into an extension of a previous job.
Build mutual understanding
Good communication is vital. Every conversation will be of value in providing insight into the company and its culture. It is important to define the prevalent management style, identify the individuals with whom the CEO will need to build relationships with, and ascertain what the organisation expects of them.
New leaders will benefit from proactive support in deciding how they form effective relationships at this level and what behavioural changes they may need to make to ensure that they are effective in their new role.
New CEOs can also make an effort to make their presence felt in subtle ways, by engaging with the organisation, being visible, and communicating and enquiring among those identified as key stakeholders.
Allow time for reflection
Often, the expectations of a new CEO are that he or she will make an early announcement of a change of strategy, but a new leader should resist the urge to act immediately, and instead spend time listening to colleagues and customers to gain insights about the business.
Unless there are urgent issues to deal with, it helps to take some time to acquire the information needed, to gain a real sense of the organisations culture, identify what is important and to differentiate between the signals and the noise.
Also, CEOs need to take time out to reflect on any unexpected issues that have arisen, so that this learning can be incorporated into their personal success plan for the role.
Fortify core teams
It’s important to develop strong relationships quickly with the key people in a CEO’s executive team – usually it’s the financial director, the chief human resources director and the key business leaders first. In general, CEOs are very reliant on these leaders, as they have been working for their companies for a while.
During the first 100 days, it is important to meet regularly with those people who report directly to the CEO. This will help a new CEO understand what each person does, what their skills are, and where they are coming from in general. The meeting groups are best kept small in order to build rapport and trust.
Reaching out to the wider organisation
In days 60 to 90, CEOs should be ready to reach out to the wider organisation. When it comes to communicating with employees and divisional teams, most senior executives now understand that an all-staff email won’t do. The best will offer employees a range of options, from town hall meetings to a webcast or video conferencing and small group Q&A sessions.
CEOs must also be clear about their personal values and ensure that these are in line with the values of the business. They need to be sensitive to the organisational culture, as seemingly minor missteps can send the wrong message. There will always be specific challenges and pressures that apply to senior management or board level roles, and CEOs will be expected to get it all right; the systems, the business strategy, the team building, and the people development.
CEOs cannot hope to successfully meet these new challenges without first understanding their own strengths and weaknesses. Some may find executive or leadership coaching or mentoring useful in ensuring that they pass their first 100 days with flying colours.