The 3 Challenges Every New CEO Faces  

12 February 2019:

Close to 50 percent of chief executives say that the role was “not what I expected beforehand.” This was one finding from a series of interviews we conducted recently with 20 current and former CEOs of large public companies, including Bupa, Husky Energy, Standard Chartered, ATCO, and Lloyds Banking Group. The goal was to identify some of the challenges and best practices that senior executives should consider when assuming the CEO role in businesses today.

The disconnect between the expectation and the reality of being a CEO — mentioned not only by those in our interviews whose tenure proved to be short and arduous but also by successful leaders — could be one reason why the median tenure of chief executive officers at S&P 500 companies was only five years at the end of 2017, down from six years in 2013. During that five-year period, more than 280 chief executives in the S&P 500 left their positions.

Our interviews confirmed that most CEOs consider the transition challenging, even for seasoned industry professionals. They reference several factors that new CEOs should carefully consider: managing energy and time efficiently, establishing a clear framework for managing relationships with board members and external stakeholders, and ensuring that the right information flows up and out of the organization.

Managing Energy

“Being time-constrained is a given, but the key is managing your energy. I’m very conscious of where I divert and direct my energy, where I get my energy and what saps it,” said Stuart Fletcher, former CEO of Bupa. Like Fletcher, older and more seasoned CEOs understand the critical importance of energy management.

Examples of avoidable issues that CEOs reported were likely to force them to waste time and, more importantly, energy were engagement with disloyal or weak direct reports, poorly designed committee agendas and missions, unnecessarily lengthy reports or presentations, and a tendency for trivial decisions to be referred upwards.
 

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Source: Harvard Business Review

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