Starting strong: Making your CEO transition a catalyst for renewal - McKinsey 2022
Some experiences in life you simply can’t prepare for. You can imagine how you might feel and what you might do, but you can never actually know how you will respond in a situation until it happens. Falling in love, becoming a parent, and facing one’s mortality all fit into this category. In the workplace, your first interview, first day on the job, and first time given the responsibility of managing others are of this ilk.
For a select few who successfully climb the corporate ladder, becoming CEO can be added to this list. As Bill George, former CEO of Medtronic and current Harvard Business School professor, puts it, “No one is prepared to become CEO, no matter how much they think they are. You have to grow into the job. You think you know how to run a business, but that’s really more the COO role.”
What makes the top job so different from the leadership roles that come before it? To start with, new CEOs discover quickly that they are accountable for everything, that their reporting relationships have changed dramatically, and that the job is extremely lonely.
Dick Boer, former CEO of the Dutch food giant Ahold Delhaize, explains how accountability changes: “As the company CEO, it’s solitary. You can’t say, ‘Look, I can’t do it because . . .’ No. It’s you. You can’t blame anyone anymore for anything. It’s you to blame.” Ecolab’s former CEO Doug Baker illuminates the uniqueness of reporting relationships: “Our synapses are designed for one boss. Our whole career, we have had one boss, and now, all of a sudden, you’ve got 13 versions of a boss. Oh, and by the way, they don’t come to work every day, like all your other bosses did.”
Microsoft CEO Satya Nadella reveals where the loneliness comes from: “Nobody who works for you sees what you see. And nobody you work for sees what you see. That’s the fundamental problem of a CEO, which is you see it all, and nobody else around you sees it, so you can get very frustrated.”
For these reasons and many others, no one should assume that they have it all figured out when transitioning into the role of CEO. In fact, one-third to one-half of new CEOs are considered to be failing within 18 months of taking the role, and more than 90 percent of those CEOs confess that they wish that they had managed their transition differently. Those who get it right realize early on that they will need to lead differently than they did on the way to the top. They know that their success will depend on whether they can reinvent themselves by rewiring the many work habits they built up over decades (on average, new CEOs have worked for 24 years before taking the role).
Savvy CEOs recognize that the renewal opportunity isn’t just for them but for the entire organization. A transition of leadership creates what German American psychologist Kurt Lewin refers to as an “unfreezing” moment for the institution. According to Lewin’s theory, organizations exist in an equilibrium state largely constrained (“frozen”) by resistance to change and group conformity. Movement becomes possible only when there is a jolt to the system (an “unfreezing”). Such jolts often come in the form of a crisis—such as when GM’s Mary Barra used the company’s ignition switch crisis as a catalyst for needed culture change. A CEO transition creates a similar opportunity—albeit without the crisis—to reset an organization’s aspirations and ways of working.
The best CEOs don’t miss the opportunity to make their first six to 12 months (not just the vaunted 100 days) both a personal transition of great import and a profound moment of institutional renewal. While each leader will act in ways befitting their unique situation, there are at least four common ingredients for success:
not making it about you
listening, then acting
nailing your firsts
playing “big ball”
To continue reading go to
https://www.mckinsey.com/capabilities/strategy-and-corporate-finance/our-insights/starting-strong-making-your-ceo-transition-a-catalyst-for-renewal#/