NEW CEO HITTING THE WALL

Second publication in the Boardroom Dynamics series

A dream of many CEOs entering a new organization is to drive their own vision for the business. They want to deliver tangible results in short term - to get them primary trust in the eyes of both shareholders and their organization. In long term they want to do something new, something big. They dream of contributing to the larger market needs. The only thing they need is a good leadership team. The leadership team which is able to drive the vision.

"I entered my organization 4 months ago. I was very enthusiastic. My direct team and middle managers seemed to be so open. They were happy that I asked questions and listened. My style is very open and engaging" - said a new CEO of a retail organization.

He was assured by the representative of the owner that the organization needs his leadership style. In the past this organization was driven by a direct and strong manager. His style was to control everything. People got frustrated as they did not have any space for initiative. Nobody listened to them. The old CEO officially was given new opportunities outside of the organization. Unofficially he was fired due to poor business results and conflict with the majority shareholder. 

The new CEO was positive about his mission during the first 2 months of his new assignment. People were rising openly all issues. He immediately had a feeling of seeing the reality. Quick wins were visible and achievable. His first speech was received with big applause. 900 people from the main office and store managers were thrilled by his approach.

"People liked my open and honest approach. I told them that I want their initiative, collaboration and engagement. They were happy" - he said.

One month later everything has changed. His desk was occupied with lots of reports. Every day he had to deal with escalations and issues raised by the team. His top managers started playing games, blaming each other. The first thought he had at that time:

"I need to get somebody I trust to my top team. Without replacing some of this guys nothing will be done". The CEO had a feeling of hitting the wall.

I have no time for kindergarten.

People got used to the style of the old leader. They got comfortable executing request and reacting to questions and orders. All the layers of people in the organization learned that it is risky to take any initiative. It is better to wait and see what the boss will do. The risk of failure always stays with the decision maker. People were very open and enthusiastic about the new CEO’s democratic style. They were not aware what it really means.

Listening to declarations of people is one thing. Verifying how these declarations work in the real battlefield of day-to-day business is a totally different thing. The job of the CEO is to uncover crucial barriers which hold people from taking accountability. Knowing barriers he/she can design strategies which will help the team transform.

"Yes but I used work for a much bigger retail organization. I had much better managers in my team before. I have no time for kindergarten" - said the CEO.

The level of his disappointment and frustration was high, although he was trying to play professional. He was trying to hide his emotions in front of his team. The more disappointed he felt the more he pushed the team for actions. Within a month he started working similarly to the old CEO, directing and controlling people. 

Every new head should be aware that the change of the leadership style requires lots of conscious efforts. The old culture can sunk the new leader to the extent that he/she changes his/her natural style. The situation becomes then uncomfortable and unnatural for everybody. 

In the past the leaders were focusing on driving business agenda. They used to leave leadership, culture and so called soft staff to HR. Nowadays leaders know that without conscious strategy and effort to transform the culture and leadership nothing will happen. 

Give them yet a second chance.

The CEO has decided to give a second chance to the team before looking for replacements. The top team gathered together for one day. The objective was to build shared commitment to change the culture. The team had a chance to ventilate their feelings, share opinions. They have discussed the difficulties of shifting mentality of the employees. At the end of the day the CEO had a feeling that his team is ready for the second day. For the following day he planned to invite additional 50 managers reporting to his direct team. 

"Dear managers, If you only ask us for opinions and listen to our ideas, if you will let us work without disturbing - we will do what we have to" - he sees one statement written down on the flip-chart.

"If you enter our room saying good morning, and respect that we are humans - we will be more satisfied and happy to work for you" - the second sentence on the other flip-chart.

The CEO was surprised by the comments of middle managers, he listened to it carefully. He was both happy and shocked. Happy from discovering the source of the problem. Shocked as he was surprised that employees have shared they concerns so openly. "How my direct team will react, hearing this right now? They will probably shut down the openness by forcing people to be quiet?" - His immediate concern was.

Although his direct team was prepared to this session, the CEO stayed concerned. Various discoveries were taking place during the first half of the second day. Among many of them the following ones seemed crucial: Middle management feels unable to act, top team is directing instead of engaging, people feel disrespected in some cases, they have no clarity of roles and responsibilities, the strategy and vision is unclear.

"Now I know why my team is unable to take initiative" - the CEO said. "If their people are not following them, it is easier to wait for my directions. We need to fix it." - He continued.

The leadership team stayed longer to discuss all open issues. They planned further sessions and meetings to deal with business, technical and cultural findings. In this case the CEO has decided not to replace his direct team. There were cases were it was not so positive.

Openness can be quickly gained, as well as destroyed.

There are many ways you, as a new CEO, can approach your direct team. One extreme is to replace the existing team, bringing people you trust. The other extreme is to push the existing team harder and harder to deliver results, and see who survives. There is a third possibility to let the team grow together with you. The third option requires more effort at the beginning, but gives great opportunities for you to grow as a leader. The choice is yours. People will remember long term who you were as a human not what you have achieved. So giving a second chance is an option worth to consider.

Deciding to build a real openness within your team requires courage and personal commitment. Once you start building it - you need to continue. Otherwise people will point at you when you are off the track.

The openness once gained can be easily destroyed. The fear of losing the openness, once gained, is the real cause so many managers choose to stay behind their desk.