Congratulations, you’re the new CEO—now comes the hard part.
In August alone, there have been a slew of firms in varying degrees of change announcing CEO switches, including such big names as Pandora, Lego Group, Mondalez and in the latest news, Uber.
Regardless of circumstances behind such shifts, experts say new leaders have increasingly less time to set the right tone both for the company and their tenure as its leader. According to Korn Ferry Senior Consultant Signe Spencer, that boils down to two things: listening and communicating.
“Those first 30, 45, 60 days should be spent talking to as many people as possible. Not just direct reports, but also people in middle management and on the front lines, those from different geographies and business units, and also customers,” Spencer says. “Ask a lot of open-ended questions so important issues can get raised.”
Spencer said this period is critical to reestablishing engagement among workers. It implicitly acknowledges that the new leader is not only aware of the organization’s troubles, but also that its employees have the collective knowledge needed to help him/her move it forward. Spencer even advises new leaders to not move their families until after this process is over so they can give their undivided attention to their new workers. After all, that’s what Spencer’s father, a corporate turnaround specialist, would do, leaving for a new job three or four months before his family to conduct similar listening tours.
New leaders must collaborate with workers on a new vision and strategy that honors the best of the past while also remedying what needs to be changed, says Kevin Cashman, senior client partner in Korn Ferry’s CEO & Executive Development practice. “It’s important for the new leaders to inspire with authenticity and avoid being seen as the hero," Cashman says. "Workers need to be reassured that they will be a part of creating a new future for the organization.”
Most important is developing a plan of action and communicating it effectively and repeatedly to the board, workers, customers and, if applicable, investors. Or, as Spencer puts it, “First you do a ton of listening, then you do a ton of talking.”
In leadership parlance, setting the right tone when taking over a company in turmoil—which is a form of turnaround—requires the blending of two diametrically opposed styles. Leaders that are truly good at listening possess high levels of the participative and affiliative styles, which encourage consensus to generate new ideas and build commitment, trust, and harmony. At the same time, organizations in turnaround also need a leader strongly focused on results who can devise and execute a new vision even if it won’t be liked by everyone. That requires a blend of directive and pace-setting leadership styles.
“It’s a funny combination of skills,” Spencer says. “Listeners have a hard time knowing when to take action, while decisive people aren’t necessarily good at listening. Listeners are open, empathetic, and humble. Directive leaders are none of those things.”
Congratulations, you’re the new CEO
– now comes the hard part.