Rising to the challenge of being a first-time CEO
In the first article in our CEO Series entitled: Breaking the Chains of Isolation: Five Strategies for Chief Executive Officers to Overcome Loneliness at the Top, we discussed the feelings of isolation that CEOs frequently experience, due to the unique challenges, scrutiny and expectations placed on them.
In this article we explore several key challenges involved with becoming a CEO for the first time and offer practical strategies on how to rise to them.
Assuming the role of CEO for the first time is a milestone achievement that comes with a distinct set of challenges, often not previously encountered, requiring: strategic thinking, adaptability, perseverance, courage, humility, and steely resilience. Successfully responding to these challenges is crucial for setting a strong foundation and paving the way for organisational and personal success.
A significant challenge for first-time CEOs is establishing credibility with their leadership team, the Board, and other stakeholders such as investors and the wider workforce. In the case of the leadership team, some may have aspired to the CEO role themselves and believe they should have been chosen. In the case of the Board, there may be Directors who have had CEO careers and have strong opinions on what they would do. To meet this challenge, it is essential to approach the role with humility and a willingness to learn from others and at the same time the confidence to assert their own leadership. Finding the right balance of humility and assertiveness is critical as being seen as too tentative will undermine the process of quickly establishing credibility and respect.
Embracing CEO Identity
Every first time CEO has come from another role, they might have been a Divisional CEO/GM, CFO, COO, or other functional leader. In their 2022 Census, Chief Executive Women (CEW) reported that of the 28 CEO’s appointed in that year to ASX 300 companies, 82% were from line roles with 14% coming through the CFO pipeline. The job of CEO is different and whilst there are experiences and skills that can be developed in readiness, most of the challenges a first-time CEO will face will be new and not in their experience set. Escaping the shadow of past experience and identity requires a shift in mindset, visualising themselves in the new role early on and consciously moving away from their previous identity will accelerate this process. To quote Buddha: “what we think we become”.
One of the most pressing challenges that all CEOs and especially first-time CEOs experience is the overwhelming feeling of not having enough hours in the day. Especially in the first few months, it may seem like everyone, and everything wants and needs their attention. Having a strong support team around them will help immensely. As Ian Davis (former Head of McKinsey) says in his Letter to a newly appointed CEO: “Your Choice of personal assistant and of the support office and technical infrastructure around you will be among your most important (and sometimes most difficult) early decisions. They should both support and reflect your own style and method of operating and be designed to take as much of the burden off your shoulders as possible”. This will allow the new CEO to ruthlessly focus their attention on the things that matter most and that only they can or should do.
Constructing the Top Team
Various studies over the years conducted by search firms and academic bodies, such as the Centre for Creative Leadership, have suggested several reasons why many executive transitions (in some studies up to 40%) fail outright or at least fail to deliver expected results. These range from failure to come to grips with culture and ineffective on-boarding support, through to a failure to move quickly enough to construct the right Top Team. Taking the time to get to know the current team, often supported by an independent leadership evaluation exercise, is recommended. Remaining open to reassessing initial impressions is also important. Taking too long to make tough calls, however, can lead to valuable time wasted and it is often easier to ‘bite the bullet’ on leadership changes earlier in a CEOs tenure. Related to the construction of the Top Team, it is essential to resist the temptation that may CEOs experience to surround themselves with people they like and feel comfortable with. As Patrick Lencioni describes in his book: The Five Dysfunctions of a Team – productive conflict, based on a foundation of trust is critical to outstanding team performance – and this is less likely to be achieved by a team in which members are too similar and comfortable with one another.
Shaping Organisational Culture and Strategy
Peter Drucker once said: “Culture eats Strategy for breakfast”. This may be true, but both are important and for first-time CEOs in particular, having ultimate responsibility for shaping these for an entire organisation will likely feel daunting. Of course, they are not on their own. The Board plays an important role in setting these and the broader leadership of the organisation must be involved if they are to truly buy-in. There is no escaping however that all roads lead to the CEO in ultimately deciding the culture and strategy required for success. If the organisation doesn’t already have a clear and compelling purpose, this is a good place to start. Not something dry and trite, but a clear and motivating articulation of the unique reason the organisation exists for customers as well as employees. Some CEOs are quick to change the values of the organisation, feeling that the existing ones are too tied to the previous CEO. Values (and the behaviours underpinning them) should be a measurable expression of the culture needed to achieve success, and most times, unless wholesale culture change is required, they may only need tweaking. More important is to ask the question: “how do we measure our performance in embedding the culture that we want”.
“Escaping the shadow of past experience and identity requires a shift in mindset, visualising themselves in the new role early on and consciously moving away from their previous identity will accelerate this process.”
Cultivating Personal Resilience
Finally, leading an organisation, especially as a first-time CEO, is both demanding and stressful. It can feel like a 24/7 commitment with no ability to switch off. The reality is that these are consuming jobs, and any notion of work life balance is difficult to reconcile. The key to not becoming overwhelmed is to establish early on principles and boundaries (these will be unique to every CEO), and then make them visible and habitual. This will have the added benefit of role modelling sustainable leadership behaviours to others in the organisation. Also important is to prioritise self-care and invest in personal development. Seeking support and guidance from a mentor or coach who will provide a sounding board for guidance, support, and independent perspectives can be helpful. Engaging in activities that foster resilience, perhaps most importantly getting a good night’s sleep, will help the CEO sustain energy, manage stress, and lead with the clarity and focus required of them.
As we have explored in this article, first-time CEOs will encounter many challenges, yet it is within these very challenges that the seeds of opportunity and potential lie. The challenges that come with the role of CEO are what ultimately shape strong, resilient, and effective leaders. It is by overcoming these challenges through perseverance, courage, humility, and unwavering commitment, that first-time CEOs will discover their own capacity for leadership and embark on a journey that, despite its challenges, holds the potential to be deeply rewarding.