Tracy Benson, CEO, On the Same Page
Few quarterbacks enter their rookie season as the Dallas Cowboys’ Dak Prescott has this year – with the explicit support and mentoring from team’s reigning all-star Tony Romo, on the DL since the start of the season. Last week, the corporate world witnessed its very own parallel. Howard Schultz, Starbucks’ visionary leader and current Chief Executive, announced that he will relinquish that role to his carefully groomed successor Kevin Johnson in April.
Based on a carefully co-crafted strategy, 10 years of working side by side, and lessons learned from a failed attempt to exit once before, Schultz has created the stage for a seamless transition for Johnson.
Like most new quarterbacks, though, many incoming CEOs are not so lucky.
When a company brings in or transitions a leader to its top job, it sends strong signals to customers, shareholders and employees about its intentions. With a smooth and managed transition, the signals it sends and its actions are consistent. On the other hand, without careful planning, the result is often a lack of alignment among the leadership team, which can lead to confusion and frustration among employees, waste (cost of poor quality, turnover and decreased productivity), missed customer and shareholder commitments, competitive vulnerability and a hit to the company’s reputation.
The steps necessary to mount a successful transition depend on whether the new leader comes from inside or outside of the organization. In both cases, investing time to understand and build on the relationships of the business is crucial.
Here are five keys to success for any new CEO:
- Carefully respond to and set expectations. What initiated the change in leadership? Are you there to change or maintain direction? To grow or save the organization from failing? To clarify or redefine its business model? In any case, you’ll want to work quickly to develop a solid understanding of the organization (e.g., customer perceptions, position in the market, cultural strengths and obstacles, leadership bench strength, employee engagement). This reality check will allow you to develop a vision, set of objectives and plan for achieving them that are relevant and realistic.
- Connect with employees. Tell the story (the big picture, the vision), explain the roadmap (how we will achieve our vision), establish expectations for managers and employees, connect what it all means for employees, invest time to listen to and understand what employees are thinking, and establish an open communication environment.
- Identify and exploit quick wins. Establish an early track record of success by quickly responding to a prevailing customer issue, addressing employee concerns, removing obstacles for direct reports or streamlining or eliminating unnecessary process.
- Get to know the influencers. As both time and organizations become increasingly compressed, outcomes are created through relationships and across functions, geographies and even business units. Cut through the organizational hierarchy to understand and activate those with information, insights and ideas. Find out who they are and get to know them. As a member of the inner circle, they will likely also have your back once you earn their trust.
- In dire situations where market share is evaporating or where a company is losing money, a new CEO especially must act quickly. A turnaround CEO we know came into a well-established company that was losing $100 million annually and committed to making significant organizational changes within 60 days. These changes included removing several layers of management. In retrospect, he said that it didn’t matter if he’d gotten it 100 percent right. It mattered that employees understood that things were meant to change, and change fast. If you’re 80 percent right, that’s close enough. The nuanced changes can come next, and you will have the organization’s focused attention.