The New CEO’s Secret Weapon

If change is happening on the outside faster than on the inside, the end is in sight. -Jack Welch, former CEO, GE

One of the most difficult jobs in modern business is that of the incoming CEO. As soon as the appointment is announced it seems that everyone desperately needs to talk to the new CEO, even before she officially starts.

Consultants want to pitch their capabilities, suppliers want an audience, disgruntled customers demand air time, and most of all the members of the senior team line up to extol the virtues of their departments and their importance to the success of the enterprise. Employees seem to be way down the list but they want to talk to the new CEO as well about a host of issues that obviously the previous CEO ignored. And if that wasn’t enough, the Chairman of the Board, all the Non-Executive Directors and of course the analysts demand quality time with the new CEO.

The most interesting thing about the people wanting time from the new CEO is that they see their job as delivering an “accurate” picture of the state of affairs, yet in reality they only have a few pieces of information, a few pieces of the puzzle, not the whole picture. And they come with an agenda, sometimes hidden, most often blatantly obvious.

And when all these pieces are laid out, they don’t seem to fit together to make a clear picture. Just like a bottom up budget there are more issues, agendas and ideas than the new CEO can effectively deal with at one time. It is important for the new CEO has to make sense of this pile of information; some pieces are clearly important and some aren’t. No wonder many new CEOs fend off as many meetings as possible until they can get their feet on the ground and see for themselves what is going on.

Time is the Enemy of the New CEO

But as always, the critical element is time. And of all people the new CEO does not have the luxury of time to dig in fully, explore all the loose ends, and most importantly, think!

There are various estimates by academics on just what the grace period is for a new CEO. Some say six months, some 100 days, some 3 months before the new CEO must produce a solid assessment and most importantly, a workable go-forward plan. But on one thing everyone agrees, in the past few years the “grace” period has gotten shorter and shorter.

The New CEO’s Secret Weapon

There is, however, a secret weapon in the arsenal of the new CEO if they seek it out. That weapon is an understanding of the leadership culture of the organisation they inherit. The culture at the top, one of the most influential subcultures in the entire organization, has a great influence on all aspects of the business, from strategy execution to company pride and teamwork.

Organisations are shadows of their leaders. That’s the good news and the bad news!

The problem with understanding the leadership culture is that it is mostly invisible, especially to insiders.

“We don’t know who first discovered water, but it certainly wasn’t fish. They are in it every day and can’t see it.”

The same is true for a long tenured senior executive team and the leadership subculture.

For the CEO to get a clear understanding of the strengths and weaknesses of the leadership subculture, I suggest a few key questions and a few key activities to spring open the padlock and reveal its contents.

Here are a few of our favourite non-obvious questions for a new CEO:

Do you know the senior leadership subculture you are coming into?
Will it support or hinder your vision and goals for the organisation?
How well does the senior team work together?
Are they focused on shared strategic objectives or just their own functional (silo) goals?
Does this company have a best practice process for strategy delivery?
Ia this a culture of personal accountability or a blame culture?

A CEO client once remarked:

There is no strategy without execution and there is no execution without leadership!

The Importance of a Senior Team Offsite In the First 90-Days

The quickest way to get a handle on the senior leadership subculture is to get the entire senior team together at a 3 or 4 day away meeting early on. (1-day is not enough time for executives to show their real character, 3-4 days is best)

If you use a robust process for strategic thinking and follow these few questions in sequence, you will quickly learn about the leadership culture. Just watch how they behave, as individuals and as a group!

What is our strategic intent?
What are our shared objectives as a team?
What are the few breakthrough objectives we should be focusing on to grow this business, better service customers, and beat the competition?
What are the fewest metrics we need to run this business properly?
What projects/programs do we need to deliver on our strategic agenda?
What projects/programs are running that don’t fit this agenda?
Who is going to be accountable for what?

You will very quickly learn the type of leadership culture you have inherited. And you will also quickly discover who’s on the bus and who isn’t. You will also learn a lot about the business from the people who “should” know the most.

During this meeting a great tool to guide the discussion is a customised Senior Leadership Subculture Assessment filled out by the senior team and then the next level of leadership. If the questions are designed properly and customised for your business and industry, it will reveal a highly accurate snapshot of the leadership culture.

Here are a couple of examples: This shows a top performing senior team:

This shows a senior team facing a turnaround situation:

During this senior team workshop the CEO will quickly begin to understand the individual personalities, their strengths, attitudes, level of teamwork, and fit with the new business requirements. And watching a team work together for 3-4 days is a great way to get the full measure of the leadership subculture.

And once you know the leadership culture you have, you can then plot a course to build the leadership culture you need!

Written and Posted by: John R. Childress

Senior Executive Advisor on Leadership, Culture and Strategy Execution Issues,
Business Author and Advisor to CEOs
Visiting Professor, IE Business School, Madrid

e: john@johnrchildress.com
Twitter @bizjrchildress

Read John’s blog, Business Books Website

On Amazon: LEVERAGE: The CEO’s Guide to Corporate Culture

Read The Economist review of LEVERAGE
Also on Amazon: FASTBREAK: The CEO’s Guide to Strategy Execution

John also writes thriller novels!