Sink or swim? How to make the transition to CEO

How can a role that is so visible, so carefully watched, studied and written about, be one that is so hard to prepare for and get right?

Being a CEO is an extraordinary privilege, a huge responsibility and often a daunting, if not overwhelming role. It’s a position that carries an enormous weight of responsibility that you can’t really appreciate until you sit in the chair yourself.

Rate of attrition

The aspects that make being a CEO so hard make the challenge of stepping into the role the toughest transition of an executive’s career. In the first quarter of this year, 15 per cent of all CEOs who left their roles did so within 24 months of starting. From 2018, this figure is just under 11 per cent. In other words, approximately 11 per cent of listed CEOs globally don’t survive more than two years in role.

While there will be different variables affecting each of these CEOs tenures, it is safe to say that none were selected with the expectation that they would be out in such a short time period. They were all selected based on a belief, held by both the board and themselves, that they were up to the task and capable of success.

Lessons for those taking on the CEO mantle

So, were they destined to fail or did they simply fail to make the transition to the role of CEO? A research project with CEOs in their second year of the role, plus interviews with CEOs from some of the world’s biggest brands has lifted the veil on some important lessons for those seeking a successful transition to CEO.

These include the following seven points:

Prepare to be unprepared: As much as you prepare, you will not be ready for the role. From small organisations to the CEO of multinational giant PepsiCo, most of those interviewed said they thought they knew what being CEO was going to be like, but when they got there they realised that the opposite was true.

Going it alone: It is as lonely at the top as people say and this loneliness can result in isolation and challenged decision-making. CEOs are not really members of any team, sitting alone somewhere between a senior leadership team and the board. One interview comment that it can feel like being “alone in a crowd” summarises the experience well.

Under the microscope: The level of scrutiny can be a shock. While many executives are used to the attention they received as a senior member of an organisation, when you become CEO you are the main attraction. Everything you say and do is overly scrutinised, especially early on, as the organisation tries to get a good read on you, your leadership style and your intentions. The intensity of this can be overwhelming for many. 

Team building: As a new CEO, you cannot move fast enough on getting your senior leadership team (SLT) set. Even with this knowledge, not moving fast enough will likely still be your biggest regret. The SLT is a key lever for any CEO and critical for their performance. We found that while the average CEO made the first change to their SLT at 2.8 months into their tenure, it took on average 11-14 months before the team was in place and performing well.

Board relations: The proportion of your time spent dealing with the board and board-related activities in the first year of a CEO role is likely to exceed 25 per cent. This was more than expected for more than 45 per cent of new CEOs in the research conducted. This amounts to approximately 1.5 days of each week, significantly impacting on new CEOs’ transition planning and what they thought they could achieve in their first year.

Communication: As important as action in the early months, communication is quite simply a skill that all executives should continually focus on. In the first weeks and months of being a CEO, the ability to perform great acts and implement significant changes will be extremely limited. What you can do is communicate clearly and in an engaging way. New CEOs often get a bigger impact out of their communication early on than they do from their actions.

Calling on your network: The role and the transition is better with support. It is imperative that as a new CEO you have a strong network of people around you that you can turn to for support, encouragement, wisdom and, especially, challenge. Part of being CEO is that people will want to make you happy, tell you what you want to hear and not tell you what you don’t want to hear. This means that you will struggle to get the truth. While having people who will tell you the truth internally is possible, you are more likely to find them externally and their ability to speak up you when you have made a mistake and challenge your thinking are vital.

As coveted as it, the role of CEO has a disproportionate impact on the lives of a large number of people. It is in so many people’s best interests that chosen CEOs are successful over time and that they get the right start to ensure they can be in the role long enough to achieve this success.

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