According to an article in The Wall Street Journal citing research from Strategy& (formerly Booz & Co.), about 76 percent of top CEOs departing for any reason last year were rookies, up from 58 percent in 2011.
Why do so many rookie CEOs fail? I believe the biggest reason is that the CEO role is 180 degrees different than any other executive role. A CFO or vice president of sales, for example, has deep expertise in his or her functional area and is used to being the master of his or her domain. A rookie CEO is confronted with an array of issues in areas in which he or she has no expertise.
What then are the keys to being successful as a rookie CEO? Here are eight ways these newbies can set themselves up for success from Day 1.
1. Understand the job.
Rookie CEOs must have a clear understanding of the five key responsibilities of a CEO if they want to succeed: own the vision, provide the proper resources, build the culture, make good decisions and deliver performance. Only then can they move forward and plan their time accordingly, instead of being driven by the issues of the day.
2. Don’t buy into the hype.
Rookie CEOs enter a strange new world: All of a sudden, their jokes are funnier, their ideas are better and they are smarter — at least according to the people they work with every day.
Even employees who are not consciously seeking favor will temper their remarks in a CEO’s presence. For the first time, the new CEO finds it difficult to get objective input about his or her performance because the this is the only job in the company without a direct feedback mechanism. New CEOs need to realize this and adapt.
Related: What to Expect When You’re CEO of a Successful Startup
3. Build self-awareness.
This capability is more important for CEOs than for any other leader. A survey of 75 members of the Stanford Graduate School of Business Advisory Council rated self-awareness as the most important capability for leaders to develop.
Self-awareness gives CEOs the ability to observe the secondary effects of their actions, to understand and mitigate their areas of weakness and leverage their strengths appropriately. In addition, having a level of self-awareness facilitates better continuous learning.
4. Ask for feedback.
Rookie CEOs should establish a relationship with their boards and outside mentors that encourages them to provide appropriate and helpful feedback. CEOs should also actively solicit feedback from employees, both formally and informally.
This will often require an anonymous feedback mechanism or third-party gatherer. In addition, networking with other CEOs and executives outside the organization may provide insightful, objective advice.
5. Implement a formal system.
No general would enter a battle without a clear, written plan. CEOs should use a formal, written system to communicate strategy and track progress throughout the organization, with direct, regular input from all employees. The CEO can only be effective if he or she has the right information from within the organization to address issues early and adapt to changing conditions quickly.
6. Score some early wins.
New CEOs can demonstrate competence, especially when first taking over, by leveraging a particular expertise. Whether it’s closing transactions with large customers, recruiting new employees, building strategic partnerships or raising money, CEOs should pick one area where their experience and expertise — or even just the CEO title — can be of value. While CEOs should not get bogged down in tactical roles, these activities can foster a sense of teamwork and build trust with employees.
7. Establish authenticity and trust by communicating early.
The CEO can mitigate the fear and uncertainty that employees experience during organizational change by communicating certain items right away. New CEOs must resist the temptation to make promises that they won’t be able to deliver. Yet conveying why they took the job, what they believe the company’s strengths are and what they plan to do broadly can help build trust with employees and boost morale.
CEOs should give employees as much certainty as possible without committing to anything that they can’t do. For instance, a CEO might say, “I believe our biggest challenge is that we have lost touch with our customers. I plan to spend the majority of my time over the next quarter meeting with customers. At that point we will align the organization to provide a superior customer experience.”
8. Learn all the time.
The single best predictor of new CEOs’ success is how fast they can absorb new material and integrate it into their actions. This explains why people like Bill Gates and Mark Zuckerberg have been so successful in a role for which they were not prepared. They both had learned quickly that they were bored at Harvard.
There are many extenuating circumstances that affect a CEO’s success or failure. Doing some study and preparation in advance, understanding the unique role and taking specific actions once on board will give a rookie CEO a leg up as he or she enters this new territory for the first time.