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How to Prove Yourself as CEO on Day 1

New and incoming chief executives must win over directors and activist shareholders from the start.

How to Prove Yourself as CEO on Day 1
The silhouettes of attendees are seen walking past a photograph of Steve Jobs, co-founder and former chief executive officer of Apple Inc. (Photographer: David Paul Morris/Bloomberg)  

(Bloomberg Businessweek) -- Debra Weiser knew she had to quickly show her leadership strengths when she was hired as vice president and head of excess casualty at Everest Insurance Co. 20 months ago. While getting to know her staff and assessing their talents, she took one-on-one meetings with her boss and top executives in finance, law, and other departments, whose counsel she knew she’d need. And she didn’t hesitate when she was asked early on to discuss her five-year plan at a meeting, even after learning she had to prepare her own PowerPoint deck, a task she’d relied on support staff to do at her prior job at a larger insurer.

“Business moves so much faster today. You have to throw yourself into the work and learn very quickly who’s who, who does what, and how your company operates,” Weiser says. “Adaptability to new cultures and ways of doing things are some of the keys to success.”

The executive suite revolving door is turning more swiftly as corporate directors and activist investors demand strong results—or seek management changes if they don’t happen. That puts more pressure on new chief executive officers and other C-level staff. Instead of a grace period to find their footing and mull strategies, they must immediately tackle challenges and show their capabilities.

Last year, 1,452 CEOs left their position, 25 percent more than those who departed in 2017, and just shy of the highest annual CEO departures recorded in 2008 during the financial crisis, according to executive recruiting company Challenger, Gray & Christmas. Although 27 percent of these departures were retirements, many CEOs resigned amid board questions about performance, and some departed because of professional or sexual misconduct allegations, the survey found.

“CEOs and other top executives must start earning their stripes from Day 1 on new jobs, and there’s little margin for error,” says Ken Freeman, former dean of Boston University’s Questrom School of Business and the former founding CEO of Quest Diagnostics Inc. in Secaucus, N.J. Social media and the availability of data about companies’ performance compound the pressures, adding “constant, up-to-the-minute scrutiny of CEOs,” he says.

An essential first step is becoming knowledgeable about customers’ needs and employees’ talents. “One big mistake some new executives make is thinking they can help underperformers improve, instead of cutting them loose quickly and getting the best possible team in place,” Freeman says.

New leaders also must balance the pressure to show results quickly with the understanding that big changes—including entering new markets, divesting or acquiring businesses, and recruiting talent—don’t happen overnight. “Executives have to lay out a road map and shorten the time frame as much as possible, but at the same time avoid the tendency to overcommit,” Freeman says. “Overcommitting and then underdelivering is a bad place to be.”

Executives can avoid this mistake by dividing goals into incremental steps, says Maggie Wilderotter, a director at Costco Wholesale, Hewlett Packard Enterprise, Lyft, and other companies, and the former CEO of Frontier Communications Corp. in Norwalk, Conn. “Progress is what gets measured rather than the outcome itself,” she says. “Executives are less likely to overpromise if they lay out what they plan to achieve in the next three months, six months, and so on.” Corporate boards are often comfortable with this approach, she adds.

Equally important is frank and honest communication. CEOs must keep all stakeholders—including corporate directors, employees, and customers—informed about both problems and achievements and avoid delivering inconsistent messages, says Wilderotter. At Frontier, she told directors and staff it would take at least two years to get to a point where the telecommunications company would start growing. Then, she says, she outlined the steps to get there. “I’d say, ‘If we do this and this, we should get this outcome in 90 days,’ and then we could review our progress.”

● Manage Expectations

① Listen to the concerns and ideas of employees first, and focus early on areas in which they need help.
② Diversity of thought works to your advantage and your company’s. Everyone on your team can’t and shouldn’t be like you.
③ Streamline meetings, encourage collaboration, and make yourself available to employees who have questions and concerns.
④ Communicate openly with co-workers and directors about your goals and the reasons for them—and about the priorities management has to propel the company forward.
⑤ Deliberate before committing to goals that others set, and don’t promise results you aren’t certain you can deliver.

To contact the editor responsible for this story: Dimitra Kessenides at dkessenides1@bloomberg.net

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