No matter how long someone spends moving up the ladder, it’s impossible to ever truly be ready to run an entire company.
Whether thrust into the spotlight in a fast-growing startup, or graduated into the role of CEO over time, many chief executives aren’t ready for the responsibility and the spotlight that inevitably accompanies their new position. That’s why the Center for Creative Leadership estimates that 40% of new CEOs fail in their first 18 months. The early months in a new position of leadership present multiple new and unexpected challenges that many CEOs struggle to face.
Fear of failure, inability to clearly communicate, and lack of trust in those around them can be paralyzing in this environment, which is why it is so important for co-founders, human resources, and managers within a fast-growing organization to support a CEO and help them learn how to lead.
What Does a CEO Do?
One of the biggest challenges new CEOs face is that there is no clear blueprint for what what makes a good CEO. In a recent study of CEOs in Italy, Raffaella Sadun, Harvard Business School professor, evaluated how CEOs invest time to develop leadership skills, because “most of the time, it’s difficult to codify the qualities of a good manager.”
The study ultimately concluded that the productivity and effectiveness of CEOs correlates to the strength of the governance in that company. In short, when the infrastructure was in place to provide guidance and mentor CEOs in their daily duties, they relied more heavily on internal support than external and got more done.
For a new CEO, it is at times difficult to identify what to do and when. Guidance from experienced managers, board members, investors, and mentors can help bridge that gap.
Helping CEOs Tackle Leadership Skills
People new to leadership roles tend to have preconceptions of what they should do and how they should do it.
I need to be firm and not take no for an answer.
I need to wake up at 3am and get into the office before anyone else.
I need to keep my worries and fears to myself or I’ll look weak.
The habits of one successful CEO won’t necessarily translate to any other individual, because everyone is unique and their leadership style will be reflective of their core values and strengths. But some practices can be encouraged to help new CEOs identify those core values and strengths.
Openness and willingness to share with their team.
New leaders tend to hoard knowledge, and organizations quickly become segmented into those who know certain things and those who don’t. For a new executive, an open-door policy and frequent communications with staff can not only help get everyone on the same page (motivating them to support the CEO’s decisions); but it can reduce friction and distrust that builds when those things are not shared.
Gordon Bethune famously transformed a failing Continental Airlines in the 1990’s by implementing his Go Forward Plan (GFP) and building stronger relationships with his employees. He did this through personally reaching out to his employees, engaging with frontline employees where they worked, and going out of his way to celebrate accomplishments big and small.
Co-founders, executives, and investors can empower their CEO to foster a culture of openness by doing it themselves, and setting OKRs related to regular and frequent communication to the entire team.
Building a Strong Support Structure.
When managing a small team, a leader might have a small handful of direct reports who they meet with and learn from. As CEO, the entire company reports to them in some way, and every one of those people is a valuable source of information. Successful leaders structure their companies with a strong and trusted executive team who can manage, communicate with, and filter information from those employees.
It’s critical that the CEO trusts the individuals tasked with the daily operations and communication of values and objectives to the rest of the organization. These same people become an invaluable source of feedback for the CEO as they lead the company forward.
Accepting and learning from mistakes.
This is a big one and can be difficult to teach new CEOs. It’s tempting, when something goes wrong, to spend time ferreting out “whose fault it is”. While a post-mortem on a major mistake is important, dwelling on who and why instead of “what next” can be devastating, not only for the company, but for morale in the company. Mistakes are opportunities to improve and get things right. The sooner the CEO learns and embodies this, the sooner it will trickle down to the rest of the organization.
A good CEO can set an example for how to own mistakes and failures and build an environment where employees see this behavior as a strength that will help them grow. A mentor or coach can help a CEO work through mistakes and better understand the impact not only on the company but on them as a leader.
Spending time with the company.
In middle management and even higher levels of leadership in growing companies, leaders spend a lot of time with the members of their team. There are only a few people, and especially when the company is still small, everyone wears multiple hats.
But as time passes, CEOs find themselves in more meetings and fewer employee gatherings and lunches. While there is something to be said for a natural barrier and the risk of forming close friendships with subordinates, it’s also important to know what is being said and experienced by the people who actually run the company.
Shifting into the Role of Chief Executive
Moving from the role of hands-on executive to the head of a growing company can be a major shift. People in this role are no longer brainstorming new ideas and getting their hands dirty every day building the mechanisms that will support their business. Instead, they are meeting with investors, presenting new ideas, building relationships with potential partners, and managing a quickly growing team.
To help them succeed, it’s incredibly important to encourage structure, keep them grounded and in touch with the people who are making their dream a reality. The CEO may stand alone when interacting with the public, but their and the company’s success should be the result of a collective effort to problem solve and build a healthy culture driven by employee engagement.
To learn more, download our Guide with Tips for Better, More Insightful One-on-Ones. In it, you’ll learn how to get more out of your conversations, make sure others feel heard, and express your opinions and suggestions in line with the needs of others.