Boards Need Plan for New Chief Executives’ First 100 Days
Article in Agenda Magazine (April 4, 2016)
If a board of directors is well prepared, the selection of a new CEO will be the end product of a comprehensive succession and transition plan. During the transition period, the new CEO is introduced in an orderly way and is allowed to get up to speed on key issues and to forge important relationships before taking charge. Boards that have prepared the CEO in this manner can rightly say that they are conforming to corporate governance best practices.
However, boards that want to truly maximize the new CEO’s chances for success need to go further. Even after a solid transition process, there are a number of steps boards can take during a CEO’s first 100 days to ensure that the new leader is on solid footing. Attention to these six details will help keep the CEO’s energy on executing his or her agenda and also prevent fissures that can grow over time into full-blown disruptions.
Don’t Stop Developing
No leader checks every box. The new CEO may be an engineer who doesn’t have the ideal level of experience with marketing, or a strategic thinker who needs to strengthen communication and influencing skills.
Leadership development shouldn’t halt just because an executive has made it to the top of the org chart. The CEO’s strengths should at least stay aligned with the organization’s evolving challenges and opportunities.
A new CEO, eager to make an impact and affirm the wisdom of his or her selection, can easily fall into the trap of underutilizing the C-suite team, establishing a poor dynamic with them that can significantly increase the chances of failure down the line. Make sure the CEO is drawing upon all the talent available — including the board itself — so that he or she can stay focused on setting strategic direction.
Ensure Promises Are Kept
The day the CEO is announced, every viable internal candidate that was passed over will start receiving offers to take the helm elsewhere. The board and the new CEO may offer vice chairmanships or spheres of influence to those executives essential to the new team. Once the new CEO is in place, boards should check that all commitments are followed through and that those commitments serve to strengthen the organization and the position of the new chief executive.
Watch the Brand
Even if the appointment of a new CEO is the result of a robust succession process, a chief executive’s first days are a highly vulnerable time as employees, investors, business partners, the media and others look to see if the organization and its new leader are moving with measured confidence. Boards need to closely monitor the fit of the CEO with both the organization and its stakeholders and step quickly into their role as coaches and advisors to reinforce positive direction and correct any missteps.
Executing a CEO succession plan is an exhausting undertaking, and boards can be forgiven for wanting to catch their breath afterward. Nonetheless, by the end of the new CEO’s first 100 days, development of the next succession plan should be well under way. Even if CEO succession today is primarily a board responsibility, it is the CEO who suffers day to day from a weak leadership pipeline.
If average CEO tenure is decreasing, the CEO honeymoon period has all but evaporated. Naming a CEO sets off a flurry of expectations, as each constituency looks for the new leader to raise the stock price, energize employees, revive flagging divisions and launch bold initiatives. Board members need to continually reinforce to the CEO that they aren’t expecting miracles and broadcast their support of steady progress.
Few CEOs start their tenures without at least a few rough spots. These guidelines won’t eliminate them, but they will help make a sensitive period less risky and provide the foundation from which the new CEO can be the leader the board hopes he or she will be.
This article was first published by Agenda and is republished on this website with kind permission of the magazine.