5 Tips for New CEOs
On Monday, a friend of mine will take over as CEO of a credit union for the first time. She’s wanted a CEO position for a while, and after years of success as a CFO, she certainly has the financial chops.
Those who have occupied the corner office know that leading an organization requires more than an industry’s technical skills. In fact, in many cases, those skills are best handled by others on the senior management team.
A CEO must instead be the organization’s visionary, cheerleader, brand ambassador and commander in times of crisis. How does a successful leader make that transition?
I asked several current and former CEOs for their advice. Here are five tips they stressed the most often.
1. Listen and learn. We’ve all heard the saying, “you have two ears and only one mouth for a reason.” The buck stops with the CEO, but to make the most informed decision possible, he or she must be willing to listen to each and every viewpoint. You don’t have to agree, but a good leader will recognize the validity in a dissenting viewpoint, if for no other reason than to understand the challenges he or she will face in implementing a new strategy.
Listening and learning will also help a new CEO build self-confidence. The more one knows, the more confident you will feel in your decisions.
Listening may also help you avoid the fate of your predecessor. Oftentimes, team members knew how to right the ship, but the captain failed to listen to them.
2. Study the financials immediately. If something seems off – numbers are much higher or lower – immediately ask why. One retired CEO told me horror stories about what happened to new CEOs when they didn’t compare current financials to last month or last year. For example, at one credit union, interest calculations on a certain type of loan were entered incorrectly into the system. Interest that’s too low can’t be collected retroactively and interest that’s too high must be refunded. At another credit union, a fee program wasn’t in place for nine months – NINE MONTHS! – and the credit union lost thousands in income. An employee knew about the problem, but because he was passed over for a promotion, chose not to say anything as a form of retaliation.
3. If you don't have a mentor yet, get one. It’s lonely at the top, and the higher you rise through the ranks, the fewer professionals you can consider peers. A new CEO needs advice from those who have been there and done that, folks who have not only mastered the technical aspects of the job, but also the pressure of making decisions that affect the livelihoods of employees, and the demands of being “on” 24/7/365. If I were moving into a corner office for the first time, I’d recruit three mentors: A friend close to my own age who has been on the job for five years or less, a colleague or former boss who is midway through his or her CEO career, and a retired CEO whom I admired while he or she was an active industry leader. I can think of the three people I’d ask to fill this role, and each offer unique perspectives I’d find very helpful.
4. Understand different leadership styles and when to use them. There are hundreds, probably thousands of books, blogs and research papers on this topic, but most of them are pretty much the same. There’s the inspirational leader, who uses charisma to make emotional connections that inspire passion in employees and raise the organization’s morale and market position. Thought leaders bring about change through disruptive ideas and do their best work in an environment that is ripe for innovation. Commanders are strict disciplinarians who are needed in crisis situations (financial, regulatory, legal or natural disaster), or in an organization that was left in chaos. Servant leaders who allow the entire team to make decisions and focus on providing employees with what they need to get the job done are successful in shops that face no crucial deadlines or serious challenges and are staffed with highly skilled employees. CEOs must learn to use these styles interchangeably, often concurrently, depending on the situation.
And above all, the most important leadership style is to always act with integrity. Do the right thing, and you’ll always do the right thing, one retired CEO offered.
5. Have a good retirement plan. One retired CEO quipped that with a good retirement plan, one day you’ll be able to look back and appreciate that all the pain and suffering was worth it.