The most powerful CEOs expand the power of those around them. There are few surprises for new CEOs like even when you are bearing full responsibility for a company’s success or failure, but being unable to control most of what will determine it. Having more authority than anyone else in the organization, but being unable to wield it without unhappy consequences. Sound like a tough job? Surprised by the description? So are new CEOs surprised by the same. Just when an executive feels he has reached the pinnacle of his career, capturing the coveted goal for which he has so long been striving, he begins to realize that the CEO’s role is different and more complicated than he imagined.
Some of the surprises for new CEOs arise from time and knowledge limitations. While several of the challenges may appear familiar, we have discovered that nothing in a leader’s background, even running a large business within his company, fully prepares him for the CEO role,
Seven surprises for new CEOs
Lets look at seven surprises for new CEOs, the most common. How well and how quickly new CEOs prioritize, understand, accept, and confront them will have a lot to do with their eventual success or failure.
The seven surprises for new CEOs highlight realities about the nature of leadership that are important not just for CEOs but for executives at any level and in any size organization.
Need support to run a company
Top on the list of seven surprises for new CEOs is you need support. As new CEOs discover pretty quickly, running the business is but a small part of the job. While the CEO is responsible for the successful operation of the enterprise, then, he can no longer be personally involved in all the decisions needed to run a large, complex organization. The CEO’s greatest influence shifts from direct to indirect means articulating and communicating a clear, easily understood strategy; institutionalizing rigorous structures and processes to guide, inform, and reward; and setting values and tone. Equally important is selecting and managing the right senior management team to share the burden of running the company.
Giving Orders Is Very Costly
The CEO is undoubtedly the most powerful person in any organization. Yet any CEO who tries to use this power to unilaterally issue orders or summarily reject proposals that have come up through the organization will pay a stiff price. Giving orders can trigger resentment and defensiveness in colleagues and subordinates. A new CEO may need to put a stake in the ground to show that he’s in charge and to let the organization know what he stands for. Giving a direct order is rarely the best way to do this. Instead, a CEO should look for ways to include senior managers and to promote agreement about decision-making criteria. A new CEO must be willing to share power and trust others to make important decisions. The most powerful CEO is the one who expands the power of those around him.
It Is Hard to Know What Is Really Going On
Even when CEOs understand that they cannot oversee every aspect of their companies, they nevertheless assume that they will be able to learn everything they need to know. Certainly, CEOs are flooded with information, but reliable information is surprisingly scarce. Receiving solid information becomes even more difficult because immediately upon appointment, the CEO’s relationships change.
Mastering communication skills
The typical new CEO knows that his actions will be noticed by those in his company. What he does not generally realize is the extent to which his every move—both inside and outside the organization—will be scrutinized and interpreted. His words and deeds, however small or off-the-cuff, are instantly spread and amplified, and sometimes drastically misinterpreted. Even personal choices are subject to scrutiny. CEOs must strive for consistency in their messages. A simple, clear message, repeated often and illustrated with memorable stories, is the best way for a new CEO to master the communication challenges of the job.
You Are Not the Boss
Many new CEOs initially assume that they have finally reached a position where they have ultimate authority. They soon learn that the situation is much more complicated than that. Although the CEO may sit at the top of the management hierarchy, he still reports to the board of directors. The board hired him and can also fire him; it has the power to evaluate his performance, set his compensation, overturn his strategy, and make other major decisions.
Pleasing Shareholders Is Not the Goal
Upon taking office, new CEOs often mistakenly believe that their primary responsibility is to keep the shareholders happy. After all, shareholder value is the mantra that has defined corporate goals for many years. Courting the favor of analysts and shareholders seems natural, and every CEO (especially a new one) likes an endorsement of his leadership through a higher share price.
The problem is that defining one’s goal as shareholder approval may not be in the company’s best interest. Actions and strategies favored by shareholders (and analysts) may not benefit the ultimate competitive position of the company.
You Are Still Only Human
Too often, we view CEOs in the cinematic image of indefatigable superhero. Yet they remain bound by all-too-human hopes, fears, and limits. The attention and adulation that come with the job make introspection difficult and vulnerabilities inadmissible. Workshop participants told us again and again that they needed to make a conscious effort to resist the illusion of self-importance, omnipotence, and omniscience.
CEO’s top priorities
Taken together, the surprises for new CEOs and carry some important and subtle implications for how a new CEO’s top priority.
- CEO must learn to manage organizational context rather than focus on daily operations.
- The CEO must recognize that his position does not confer the right to lead, nor does it guarantee the organization’s loyalty. He must perpetually earn and maintain the moral mandate to lead.
- The CEO must not get totally absorbed in the role. Even if others think he is omnipotent, he is still only human. Failing to recognize this will lead to arrogance, exhaustion, and a shortened tenure.
