Successful CEOs are often said to have certain traits, to behave in a certain way. However, such assertions do not hold up to real world scrutiny. In the real world, each CEO succeeds, or not, in a unique context. So, there can be no set of general traits or way of working that will lead to his or her success.
In our ‘The Successful CEO series’ Christian Nyhlen, the CEO of Krinova Incubator & Science Park and MU’s CEO, Richard Moore, look at how you, the CEO, can be assured to succeed. To read other articles in the series visit The Successful CEO.
Nearly half of new CEO appointments fail.
For practical advice to succeed as a CEO – Sofia Hjort Lönegård, MU’s Head of Communications, interviews Christian Nyhlen, the CEO of Krinova Incubator & Science Park, and MU’s CEO, Richard Moore.
As well as being CEOs themselves, Christian and Richard have spent decades working with CEOs from high growth start-ups to global leaders in the private and public sector. They have found that by applying what science tells us about performance at work, more CEOs succeed.
CEOs make and oversee many plans but one plan stands above all others: the CEOs own onboarding plan. Get this plan wrong, and the Board will need to find another CEO who can get it right.
Alarmingly, for nearly half of new CEOs things go wrong right at the start:
Widely cited research indicates that nearly half of new CEOs don’t make it past 18 months, and the costs of replacing them are staggering” (AESC ‘Minimize Risk’, retrieved 2021, para 1).
An effective onboarding plan will significantly impact your probability of success. As Richard Moore puts it:
“Science helps us a great deal with getting a successful start in a new role. Research from the MU Research Institute analysed the decision process leading to CEO termination. A key finding is that decisions to stop a new CEO typically take much more than 12 months to execute. Putting that together with other research into typical length of service for new CEOs, this means decision to stop a new CEO is taking place at around 6 months. Already in the first months, Boards are often concluding that the appointed CEO won’t succeed. With odds like this and such a short period to demonstrate effectiveness, planning for a fast start is vital”.
The good news is, as Christian Nyhlen goes on to say:
“The speed of failure in new CEO appointments is alarming. However, a good onboarding plan does dramatically increase the probability of success. Even if every plan is unique, the structure of what you need to include and how you should review and adjust it is simple. As science tells us much about how leaders develop in a new environment, entering a new C-level role successfully can be effectively managed”.
Richard comments that CEOs must succeed in multiple dimensions:
“Firstly, they must achieve results. Secondly, they must positively impact the culture – the collective values, beliefs and principles of leaders and colleagues in the organisation. Only by delivering results and making an effective organisational contribution, does a new CEO create the opportunity to succeed in the third dimension – to develop themselves, their team, and their leaders longer-term. Your onboarding plan should focus on specific goals that can be measured – and these goals should encompass result achievement, organisational contribution, and your own learning”.
Even though each CEO role is unique, these three dimensions are always present: business results, organisational contribution, self and team development. Christian comments:
“To get off to a fast start you’ll need to demonstrate achievement in all three dimensions quickly – and know that success in one area – at the cost of the other two will not be sufficient. So your plan should be well balanced, result orientated and closely followed up – covering both the action you will take and the stakeholder relationships you will develop”.
An effective onboarding plan makes sure these simple – but commonly overlooked steps – take place. As Christian comments - “There are no shortcuts to getting it right”:
Richard points out that science explains leaders success in a new role is defined to a large extent by the specific role context. Understanding the context is key for any new CEO:
“The success of CEOs is determined by the specific context in which they operate and the goals they must achieve in the short and long term. Generic advice on how to succeed in a new role is not effective because each situation is unique. Success requires understanding the precise situation and planning accordingly. MU recommends using a checklist to create a tailored 100-day plan for CEO success”.
Christian describes the areas covered in such a plan:
“Consider these questions to structure a solid plan – and consider your own will and capacity to pursue the action required. Your plan should be stretching but achievable!
What are the short-term results you must achieve (within 6 months, 12 months, and 18 months)
Customers/Client results (e.g., sales performance, customer satisfaction)
Organisation and People (e.g., productivity, diversity, restructure)
Finance and Governance (e.g., reporting, control, risk management)
What organisational contribution, beyond specific results must you have:
Impact on other leaders (e.g., leadership behaviour, team effectiveness)
Impact on culture (e.g., cooperation, innovation)
Impact on stakeholders, customers, partners (e.g., clarity of focus, positioning)
Long term development of your capability and the performance of your team/organisation:
Analysing and scenario planning risk and opportunities for the long term; potential transformations (e.g., vision, and interim milestones)
More effective business operations and leadership (e.g., efficiency programmes, cost opportunities)
Your own learning and development, and that of your team and Board (e.g., closing skills gaps, acquiring new capabilities for new needs)
Christian remarks that one of the most important aspects of a successful onboard is to ask stakeholders the best possible questions right at the start. These will help to build your plan effectively and create the basis for a trusting relationship:
“Ask your stakeholders some powerful questions, beyond regular information gathering ones:
Richard adds, that new CEOs have so much to gain from leveraging a strong stakeholder network
“The selection of diverse stakeholders will increase your insight and influence. As a CEO, much of your development should focus on strengthening your network. And a large part of CEOs impact relates to the network ‘power’ they can bring to bear on problems and opportunities. A strong network also increases your opportunities to get valuable feedback”.
So how should you approach building and pursuing a stakeholder management plan in practice, ponders Christian:
“A good stakeholder plan helps you understand the diverse views and capabilities you will need to harness. It will give insight regarding what to do and how. And it allows you to build trust, manage risks regarding how you are perceived and ensure the work you do is understood. Stakeholder management will ensure you build relationships, learn about the impact you have and how to sharpen and control it.”
Christian concludes:
“A good idea is to track information about key stakeholders – how can they be influenced, what help can they give you, what network can they connect you to, what is their expertise and what are their plans? Even for an established CEO – how sure are you about your stakeholders? Your relationships are never stable”.
With an effective plan in place, it’s time to make sure you follow up on progress effectively. Christian again:
“It is simple. Know how you will measure the impact of you onboarding actions: Precisely tailor your action towards specific outcomes. Decide how you will measure your organisational impact and which knowledge gaps you want to close – i.e., what must you learn about your new organisation, yourself, and your team to have the required impact”.
More practically, how should a new CEO describe their onboarding and stakeholder management plans? Richard comments:
“Well as Christian states it is simple to review a plan, but that does not always make it easy in practice. When you actually look at how CEOs follow up on their onboarding plan, it is often adhoc, informal or unstructured – even lost from agendas altogether. What is most important is to get into a habit of structured progress review”.
What you work on matters. Who you work with, and how they work with you, is as important. Your actions and your stakeholders will define your success.
Through precisely tailored onboarding, based on clear business impact measures, with a well-organised stakeholder management effort and systematic action plans and follow-up – CEOs can plan a successful start.
And with that plan well executed, long term development of your organisation and team can commence.