- New CEO - Questions to prepare you for success
New CEO - Questions to prepare you for success12-Jul-2017
The 7 crucial early questions for new CEOs
By Konstantinos Apostolatos
How prepared are new CEO's for success?
In our research we analyzed the difference in performance between successful CEOs (read, those who delivered on average top-quartile Total Shareholder Returns during their tenure) vs. their successors over a period of 15 years and the conclusion was that only one out of five managed to sustain over-performance.
While there are several variables in place and it does not make much sense to try and frame ‘recipes’ for success, we have found that CEOs who invest the time to answer a number of key questions early on in their tenure (i.e. during the first ~100 days) vastly improve their chances of success. For the purposes of this article, I have selected seven critical ones, although there are obviously also others.
1. Are we winning?
I vividly remember a first meeting with the ExCo of a client where I had prompted the CEO to focus the entire session on a single question: “Are we winning?”
This seemingly simple question was met with initial astonishment and silence, followed by a very animated discussion around what we actually mean by ‘winning’. There were in fact so many different views in the room as there were participants and one can only imagine how difficult it is to formulate a strategy without having a common understanding of what winning represents.
Imagine how difficult it is to formulate a strategy without having a common understanding of what winning represents.
I was recently speaking to the new CEO of a major F&B company which had under-performed for the most part of 10 years (leading to a very belated decision by the Board to bring in a new CEO) who, upon arrival decided that ‘winning’ represented for the company a doubling of the company value in 4 years (the equivalent of top-quartile TSR vs. a broad set of peers).
It is absolutely fundamental to define and align around a value-relating ‘overriding objective’ early on which clarifies the company's stretch ambition and helps frame a focused agenda to achieve the company objectives.
By the way (as you would have guessed) for the companies that are winning, the question becomes “Why are we winning today and how can we keep on winning in the future?”
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