While the first 100 days in a new organisation are said to be crucial for incoming CEOs, in truth, boards are usually more realistic regarding the time it takes to implement changes, generally allowing a year for a new CEO to bed down.
However, those first 100 days are still used as a benchmark for how a new CEO is faring as a leader. Wider stakeholders and investors – and even the chairman – may use this early period to determine whether the CEO is off to a good start. Therefore, it’s important to start by formulating a communications strategy and timetable.
CEOs should start by building a strong working relationship with the chairman of their new organisation. Incoming CEOs and chairmen both need to prepare for the transition to new leadership, which includes establishing a cordial and professional connection. The CEO and chairman don’t have to be best friends – in fact, this is quite rare – but they should be able to work together effectively and efficiently.
The chairman is ultimately accountable for a smooth CEO transition, and sets the tone for the relationship with the rest of the board. Every leadership changeover requires a re-think of the role and relationship between the chairman and CEO even if the new appointment is from within the company. This means clearly delineating which are the responsibilities of the CEO and which are those of the chair: for example, does the chairman meet with the investor community alone, or with the CEO and financial director? What’s on the agenda for the scheduled board meetings? Who’s involved in setting that agenda?
It’s the chairman’s job to prioritise onboarding a new CEO. That said, since a chairman’s performance is rarely reviewed, it may be up to the new CEO to steer the goal-setting exercise. Instead of leaving the start up period loose in terms of performance, it’s essential that both the chairman and CEO mutually agree and set clear expectations, goals and a timeline for delivery during the first 30 days.
If you’re a new CEO, you should actively engage the chairman in defining objectives over the next six to 12 months. Set out what you think they should look like as a starting point and put agreed goals in writing. Don’t assume they’ll just work themselves out, or passively wait for your first review to discover you’ve failed to meet expectations.
You need to develop strong relationships quickly with the key people in your executive team – usually, it’s the financial director, the CHRO/HR director and the key business leaders first. You’ll be very reliant on these leaders, as even if you’ve been working for the company a while, you won’t necessarily know the details of the other business divisions or their organisational dynamics.
New CEOs can use board meetings to set a rhythm for benchmarks and goals. Since these tend to be scheduled quite far in advance, CEOs can gear their moves to board meetings and use them to benchmark performance. Hold a debrief with the chairman after each board meeting to determine what worked, what didn’t and how to proceed. That’ll give your relationship a natural flow every three to four months.
Then move on to the top team. You need to develop strong relationships quickly with the key people in your executive team – usually, it’s the financial director, the CHRO/HR director and the key business leaders first. You’ll be very reliant on these leaders, as even if you’ve been working for the company a while, you won’t necessarily know the details of the other business divisions or their organisational dynamics.
Form these alliances quickly to ensure you assimilate easily into the culture of the various businesses or you risk organisational ‘tissue rejection’ which can be hard to come back from.
If your succession is internal, this will be easier, but the challenge you’ll face is how to move from peer-to-peer relationships to one where you’re the boss. Seek out another CEO who’s been appointed from within as a mentor for advice on handling this transition.
Next, develop your relationships with investors and the rest of the board. Due diligence around taking a role is important, but it can often be difficult to ferret out critical information until you’ve accepted the post. You may need to use the time between the announcement of your appointment and day one to do some additional research into the company through the investment community.Call on your investor relations team or FD, perhaps inviting them for an informal session. Ask open questions about the company’s shareholder community to find the simmering issues.
Communicating with shareholders is vital: more activist shareholders and proxy access have set expectations high, so it’s key that you find your voice with the investment community. Make it transparent how your leadership will differ from that of your predecessor. They will be waiting for you to signal to them, so it’s worth preparing ahead for this.
Getting on board
Often, new CEOs fall down in the first 100 days by failing to build relationships with other board members – they forget that they now have not one, but 12 bosses. Like the investment community, board members will be waiting for your early signals. Don’t wait until your first board meeting to forge links and instead get to know them beforehand by having dinner or going to their office. Consult with the chairman first as to what’s appropriate, and how much contact you should have with individual board members. However you achieve it, it’s important to get out in front of the communication flow with individual directors.
In days 60 to 90, you should be ready to reach out to the wider organisation. When it comes to communicating with employees and divisional teams, most CEOs 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. Don’t risk disengaging the company’s employees by being inaccessible.
Beware of trying to change the world before you’ve fully understood the world you’re changing. But likewise, don’t spend so long listening that you don’t act. There’s a balance to be struck; some CEOs go too far in the listening direction, leaving people to wonder whether they’ve hired a CEO-in-training.
Be sensitive to the organisational culture, as seemingly minor mis-steps can send the wrong message. For example, you’re told to take the corporate jet for security reasons, but how does it look if you turn up to a branch office in a limo, flying in and out the same afternoon? Instead, ask the local head to pick you up at the airport so you can talk on the journey over, or make a point of meeting the divisional representatives over dinner the night before your formal meeting.
Plan your major decisions around the board’s next strategic review. Gather ideas ahead of this in a discursive way, asking for an exchange of views behind closed doors with your key advisors to refine your key messages.
Go heavy on face-to-face communications wherever possible, for both the big messages and the more mundane issues. Everyone will assume a CEO got the job because they were the most qualified to run the business. What you have to prove is that you fit in and really care about the future of the enterprise.
Timeline: first steps
Pre-start prep: do additional due diligence with the company’s investor community to determine if there are any ‘simmering issues’ to tackle. This may significantly change your timeline priorities.
Start building a cordial, professional working relationship with the chairman. Agree on objectives, clarify division of responsibilities and set early performance expectations.
Get to know your executive team members, what they do, agree how they will work with you and report to you. Use their insight into financial and cultural issues to steer your behaviour with shareholders and employees.
Establish your voice with investors and actively seek time with other board members.
Engage with the wider organisation, using town hall meetings, webcasts, videoconferencing, small group sessions and one-to-ones where possible.
Where you can fall down
1. Forgetting to communicate with all board members
2. Not devoting sufficient time to investor relations and communications
3. Misfiring with the broader organisation by failing to be visible enough or setting the wrong tone
Keith Meyer is head of global CEO & board practice, global search firm, CTPartners.