Pitfalls to avoid as a newly appointed CEO/MD
Why 50-65% of newly appointed executives fail within the first 18 months of their assignment?
Shocking data from a study done by Ron Carucci and his colleagues:
- 69% of leaders said that they were minimally prepared for the executive role.
- Only 31% said they were slightly or moderately prepared for the role they got.
- 76% of the respondents said that the formal development processes that were in place were minimally if not at all helpful for preparing them for their executive role.
- 45% had a minimal understanding of the challenges they would face and 55% had minimal or no ongoing coaching to help them once they got the job.
- 61% said they were completely unprepared for the jobs they assumed.
Pitfalls executives can be helped to anticipate and avoid from the very beginning
The myth of the mandate
You have great experience of building a business, achieving great growth or transforming organisations. And that is the reason you’ve got the mandate. They may say it loud or simply imply it but they expect you to follow your past recipe for success and apply it in your new position. You go in and begin to try to reach back to your past successes and repeat them without studying the context, without understanding who's around you and without even trying to adapt. You are just simply replicating. And that is dangerous because the seeds of failure are sown.
How can you carry out your diagnosis with the aim of better understanding the context of current reality and the people you signed up to lead?
Turning your diagnosis into an accusation or criticism
The second pitfall, which is when your diagnosis turns into an accusation and criticism. So as you are assessing the situation, you may begin to say things like, "How have you people made money here?" or, "Nobody told me it was this bad." And your judgements become harsh enough on the very people you need to help turn things around. You, in your first two months, suddenly discovering how bad things are, is no help to the people, because they know or at least feel it acutely, but that's what leaders do. So, in this very early stage, you can easily begin to sow the seeds of failure and the more you judge, the more people begin to withdraw their support and back away from you as their leader.
What mindset you are in during your diagnosis phase? Are you listening with the intention to understand or with the intention to respond or comment?
Decision compression; inability to let go
Leaders are often unable to let go of short-termed detail work that they managed in the middle and bring that up with them. By this you make people in the middle wonder what the boundaries of their authority are, which causes them to create compression below them. And you end up micromanaging and dipping too low into roles you shouldn't be involved in and nobody minding the future. So, you create bottlenecks, you create roadblocks, you create anxiety and confusion when you don't leave behind what you're supposed to leave behind as you ascend.
What do you need to let go in order to create space for more strategic work?
Intolerance of ambiguity and lack of immediate gratification
Leaders are often surprised by and intolerant of the ambiguity that comes with a larger role. Results take longer to achieve, timelines exist on broader horizons, and the immediate gratification that you used to get from being more involved in near-term results is gone. And so your ability to wait for it, to be comfortable with abstraction, to be comfortable with longer time frames and uncertainty often trips you up and so you grasp at what you know.
How do you feel about, and how do you handle your inner turbulence when you are leading in ambiguity? What reassurance do you need to pursue the unknown and become more visionary?
Your biases about what you “already know”
And lastly, this is especially true for leaders who ascend from within an organisation, not so much so for those who come from outside, but is the bias of what they already know. So, many leaders, of course, believe they know the organisation, know the culture, know the players, and as they ascend. The problem here is that they don't test those assumptions. You assume that what you know is true and what you have known is all there is to know, so you don't try to learn and be more curious about your own organisations.
What makes you blindsided? What questions should you ask yourself? What questions do you keep avoiding to ask yourself? What is obvious?
Source: Rising to Power: The Journey of Exceptional Executives by Ron Carucci & Eric C. Hansen & World Business & Executive Coach Summit 2019, Preparing Leaders for Senior Roles of Broader Influence presented by Ron Carucci