A few years ago, I was coaching Jennifer, an executive from a large Sydney property group. She came into one of our coaching sessions really excited because a new CEO had finally been appointed after a long search. And that meant that they could make progress … at last!
However, four months later and there wasn’t any progress.
Another three months went by and the new CEO still hadn’t made any mark. No real decisions. He hadn’t finalised his executive team. Hadn’t ratified the business strategy. The organisation was slowly grinding to a halt.
My coachee was frustrated because this was starting to impact not just her ability to do her job and do it well, but also her team. Her team were complaining that she was keeping them in the dark, that she couldn’t tell them what was happening because she didn’t know. Their belief in her was getting undermined. They were restless and starting to make mischief, instead of being focused and performing….like they had been.
It was a time of unrest, poor behaviour was starting to appear and there was a greater level of nervousness about the future. There were a lot of questions about ‘what was really going on’.
This whole situation was impacting not just the executive team members, but of course their teams as well. The executives weren’t able to make big decisions, they weren’t able to set priorities, they weren’t able to give direction and clarity to their teams.
Now this situation is by no means unusual, that following a CEO or C-suite appointment not much happens. Or on some occasions, at the other extreme, that things happen way to fast, with radical decisions being made without mind to or understanding of the consequences.
According to the Harvard Business Review, at least 2 out of 5 new CEOs fail in their first 18 months on the job. An Egon Zendor report in May 2017 found that for those in VP roles and above it takes most people 6 months or longer to make an impact in their roles. For CEO’s it can be much longer.
What is the impact of having a CEO fail in their role?
The cost of failure is at the very least the:
- cost of hiring a new CEO…at least 33% of the annual salary
- the time it takes to do another CEO search
- the lead time for the next CEO to get up to speed…another 6 months minimum
- the impacts on the organisation of a lack of stability at the top
- not to mention impacts on employees, customers, providers and other stakeholders
That adds up very quickly.
You might be thinking ‘Why does this happen? None of this seems like rocket science. Aren’t CEO’s supposed to know what to do? Isn’t that why they got the job?’
Well yes…and no.
For a CEO starting their new role, it’s like it is for anyone starting a new role. It can be overwhelming in terms of what needs to be done, the amount of learning that needs to happen, how much information there is to cover and the number of stakeholders in play. Amongst a myriad of other factors, including that for a CEO the buck stops here.
And to compound this a newly appointed CEO is more often than not, not given the support they need to be effective and successful as quickly as possible.
It’s like hiring Michael Jordan and then failing to give him the team playbook. If he doesn’t know what the plays are, and he doesn’t know who the players are on the team, what the strengths are and how bring out the best in their new team, how can he effectively lead the team in their first game?
So what’s the solution?
To shorten the time frame to becoming effective and to reduce the risk of failure a CEO, or a senior executive appointment, needs support. Some of the challenges they say they’re experiencing are exhaustion, feeling overwhelmed, being unsure of the political landscape and confusion about where to focus their efforts.
One of the best ways to support them is by providing a Coach for their transition.
A coach who works with the CEO, so they become effective in their role more quickly, including helping them:
- leverage their strengths and manage their energy
- quickly understand the lay of the land, culture of the organisation, their players
- help them establish the right priorities and develop their 30 and 90 day plans
- be the leader that they need to be in order to fulfil their new role
In fact, the same Egon Zendor report found Executives who get the right support get up to speed in about half the time.
Imagine the ROI on that!
It just makes good commercial sense to give your new CEO a coach. As Michael Jordan said “a coach is someone who sees beyond your limits and guides you to greatness”.
Give your new CEO every opportunity to be effective as quickly as possible. They were hired for a reason. Because of all they bring. So, let a coach draw that out of them and put it into play as soon as possible.
Your people will thank you. Your customers will thank you. And your shareholders will thank you.
Love to hear your thoughts.
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