Establishing a strong management team will help a new CEO develop a vision and strategy and doing this in the first 100 days will go a long way to getting him or her off to the right start.
Your team should be an extension of your leadership, projecting your vision, values, objectives and requirements. Before thinking of a strategic agenda, assess whether you have the people who can hone it, own it and implement it.
The team you build is a reflection of you, but don’t fall into the trap of making it a carbon copy of your skills. You need to find others whose skills and strengths complement rather then supplement yours. Conduct a 360 degree evaluation to determine your strengths and weaknesses for the role. That there will be gaps is normal but this evaluation will enable you to identify those and recruit the people who can fill them.
No one is adept at – or has time to concentrate on – every aspect of the job. Think about the areas where you can add the most value and those where someone else may do a better job.
Does your team have what it takes?
When inheriting an existing team, the first challenge is to determine each person’s competence and how their contribution affects the team. Bear in mind the environment in which the team operated previously and how that may have shaped decisions and actions.
Don’t assume that someone who was less effective before will not be effective in the future – a new environment and leadership style may cause that person to blossom. Likewise, don’t rule out managers who disagree with your views. Their willingness to challenge the status quo can be a great asset to a group, forcing it to question assumptions.
It’s not only the individual capabilities of the team members that need assessing but the capability of the team as a unit. How well does it work? Which people in which positions form the most productive combination? Which people will maximize your leadership capacity? Can the team serve the company going forward?
The team must match the company’s changing needs and enable the new CEO to do the best job possible. It should reflect the value and standards the CEO expects in the business.
Making your move
Many people expect CEOs to come in, clean out and start again with their own people. This seldom happens – it’s unrealistic and ignores opportunities for establishing a new management style with existing people.
Lucent chairman Henry Schat is adamant: “Don’t change anything unless there’s a reason to change it. Presume that people have the capacity until they prove otherwise. If you’re going to gain commitment, chopping heads is about the worst way to do it.”
Every manager approaches inherited teams differently but a popular strategy is to identify keepers, watchers and goners. Keepers are major assets you want to retain; watchers require a probationary period in which to develop into valued assets while goners need to be removed quickly.
Unless the company is in crisis, experience warns against making personnel moves immediately. Hewlett Packard’s Lewis Platt: “There is a tendency when it comes to people decisions to make them too quickly. Just because someone doesn’t see eye to eye doesn’t mean they’re not the best person for the job. Often you need someone to disagree with you. But, when a new CEO comes in and cleans house, they lose a lot of very good people.”
It’s different in a crisis situation. “If the business is broken and the management team isn’t credible, you’ve got to make changes on day one,” says McNerney.
Meanings will be read into every personnel change you make. Left unexplained, rumour and speculation will abound. Who you recruit also sends signals about your management style and expectations so it’s critical that you clarify and communicate your objectives from the start.
One of the most critical challenges facing a new CEO is working out which legacy managers to keep and when to bring in outsiders. Reader’s Digest CEO, Tom Ryder, believes introducing 30% to 40% new managers creates enough turmoil to facilitate change without destroying continuity.
Teams in crisis
In a crisis you may not want to retain any legacy managers or publicly endorse the old guard. When Ed Breen took over a CEO at Tyco, he had to move quickly to remove managers being indicted on fraud charges. “I got rid of the former CFO on day two and the rest, within 60 days.” Hiring however doesn’t happen that quickly so Breen got outside help to act as a crisis management team while recruiting new management.
Forging the team
Forging a great management team is the most common trait among those rare entrepreneurs who make it from start-up manager to great business leader. Recruiting the best people is only half the job – you need to meld them into a working unit. Your first meeting sets the tone so establish your expectations in terms of agendas, punctuality, attendance and how issues should be raised and resolved. When you’re coming in from the outside, you may need to adjust your expectations and approach according to how your team works.
Conclusion
In reality, after 12 months, few CEOs are left with more than half the team they inherited. As the composition of the team changes and it notches up wins it will develop its own expectations of its members and of itself.
The difference between attaining moderate success as a CEO and greatness is how you exercise your leadership to shape your management team in the early days – and how you continue to motivate and develop it.
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Note
This article is a summary taken from
You're in Charge — Now What? published by Crown Business, New York, 2005.