THE CHALLENGE: BUILDING A PLATFORM IN YEAR ONE
One of the most important responsibilities of the board is to select and install the CEO. However, average CEO tenure is just six to eight years, suggesting that active support for the new CEO from (or before) day one is critical.
The board must take the lead in providing this support, but a deeply experienced business advisor can play an important role, ranging from getting the CEO off to a faster – and more focused – start, to increasing the chances of success in the early years, and establishing a culture of development between the board and the CEO.
Our work with CEOs explicitly addresses these gaps. We delve into the business context with the CEO to identify the key issues on which he or she needs to focus. We provide the CEO with tools and processes to build an aligned team. We help the CEO restructure his or her time, identify trusted sources of support and plan their interactions with the board and other key stakeholders.
As business advisors, we bring the perspective and judgment that come from 35 years of experience working with the CEOs of global companies and their teams. We are singularly focused on helping ensure that our clients are successful in achieving their business goals.
HOW WE WORK WITH TRANSITIONING CEOs
In the first year of a CEO’s tenure – and often for several months prior to the appointment – we pursue an integrated portfolio of activities.
Early on, the CEO needs to be clear about where his or her leadership and involvement will make the most difference to the business and its most important stakeholders. Accordingly, the cornerstone of the engagement is the development and active pursuit of a formal Leadership Plan that specifies the key areas of focus – the top two to three business imperatives that the CEO needs to address – for the first three to twelve months, defines measures of success, and pinpoints the actions required.
We also work through the behaviours that the new CEO needs to adopt, the skills that he or she needs to draw on, and how best to allocate time to ensure that he or she will be successful in the new role.
The duration for such an engagement is usually nine to twelve months. In a planned succession, we often begin the work several months in advance of the transition.
A DISCIPLINED PROCESS
A disciplined process is critical to achieving the goals described above, involving the following steps:
- To develop the Leadership Plan with the CEO, we interview the Board Chair and direct reports to build an understanding of strategic issues and business imperatives.
- Once the Plan is developed, the CEO typically shares an appropriate version of it with the Board Chair. CEOs frequently share the Plan with their teams to help build alignment.
- We hold one or two face-to-face meetings per month with the CEO, each about two hours long, plus interim phone conversations. Each meeting and call is followed up with written observations and recommendations.
- The Plan is used as an ongoing checkpoint with the CEO, and we update it regularly.
- A couple of months into the CEO’s tenure, we interview fifteen to twenty individuals (such as direct reports, former colleagues, and the Board Chair) to develop a comprehensive “360” written report that we share and work through with the CEO. If any feedback is shared with the Chair of the board it is with the prior approval of the CEO.
- We draw on assessment tools such as Pathfinder and sometimes help the CEO seek the support of other professionals in areas such as communications, governance, talent management, or investor relations.
Later in the coaching engagement, a meeting may be scheduled between the CEO and the Board Chair to ensure that areas of focus and objectives continue to be aligned.
TYPICAL AREAS OF FOCUS: BUSINESS, PEOPLE, AND BEHAVIORAL ISSUES CARRY EQUAL WEIGHT
Approaches and tools to assess the senior team and to build a high-functioning, aligned organization: New CEOs must not only have clear strategies and priorities but must also ensure that their direct reports are fully on board with the strategy and are able to execute it.
Other relationships that the CEO needs to develop: Developing relationships with key members of the Board is critical, but important links with key customers, regulators or suppliers will also require cultivation.
CEO-specific skills: Governance, communications capabilities, talent management or investor/media relations may be among the areas in which the new CEO will need to invest.
Shifts in leadership style and behabiours: Behaviours that led to success before becoming CEO may need to evolve markedly going forward, and it’s important to identify and work on needed changes early on.
Time management and personal challenges: It is imperative that the new CEO re-think how to spend his or her time, and consider how best to balance the personal and family pressures that come with the life of a CEO.