New CEOs have a tough time taking over Mid-Market Companies
The new CEO of a mid-market company has very different challenges when compared to a CEO of a large company. In the larger companies an executive can be groomed for the job over many years, have access to mentors and advisors, but in many Mid-Market companies the CEO is offered the job often with little training or preparation. As a result the new CEO is often surprised by many issues that a more seasoned CEO would not lose any sleep over.
For a new CEO of a mid-market company it does not take long before they are drowning in reports, memos, and other insane demands on their time. Then to make it worse, the CEO realizes that much of the information is not reliable and many of the demands on their time are not translating into improving the business. Finally the CEO recognizes that the extra demands of the job are cutting into family life and friends are being ignored making the CEO feel more and more issolated.
A good CEO has a built in “spin detector” to weed out those employees are only trying to please the boss and put a positive spin on things rather than telling it like it is. Until the new CEO develops a really good spin detection capability, they need to get out and walk around the office or factory and go on sales calls to hear the “straight goods” from others who are not interest in putting a spin on what is going on.
It is often an ego boost for a new CEO to make many of the decisions until they realize they are making decisions their direct reports should make and clogging up the system as these direct reports line up outside the CEO’s office instead of making the decisions and keeping things moving along. The CEO needs to become very clear on what decisions need CEO input and the rest of the decisions can be taken by others.
As the workload increases so does the challenge for the new CEO to keep track of things. Eventually most new CEOs resort to making lists. However these lists can become several pages long. The CEO finds they can never complete their list of activities, no matter how many hours they work. So the CEO needs to develop the discipline of picking only the two or three most important things and delegating the rest of the items on the list for others to follow up.
As a former employee, the new CEO can often remember how they used to analyze every word and nuance they could pick up from the their former boss and comparing notes with others to see if they were interpreting or misinterpreting what was needed. The shoe is now on the other foot and the new CEO often worries if they will lose the loyalty of employees in a second if they make a careless comment or inappropriate facial expression. However, this phase passes when the CEO realizes the power of constantly repeating messages on a regular basis to reassure employees what is needed.
New CEOs are amazed at how long it takes to get the little things done. They are often tempted to do things themselves as they can’t understand the lack of urgency by employees to address such things. People only seem to do the things the CEO follows up on and, even then, many things don’t seem to get done. Eventually, the CEO starts to keep a list of people who honour their promises and get stuff done, on time and right. This is a mighty short list.
When things change the new CEO is expected to have psychic powers to know how the change will turn out and what needs to be done. It is a hard lesson for the new CEO to mouth the words, “I don’t know.” However this needs to be follow up with -”but I will find out.” In large companies many of the answers can be found at the end of a phone call or email to the relevant expert on staff or on retainer. However in the mid-market company – finding out can be a lot tougher as the resources and data available tends to be limited.
Current business literature pushes the need for CEO’s to become great story tellers. However we find the new CEO can often get more done with a checklist of items to discuss with others than trying to perfect their story telling. However there are some items that can be especially tough for the CEO to deal with. We call these the Show Stopper List. Some of the challenges that get on to this list are: when management cannot agree on the future direction of the business; cash flow challenges or the banker giving the company a hard time; losing key customers or having to drop prices to get customers; as well as issues like struggling to get work out the door on time; losing key personnel and late and inaccurate financial reporting; not to mention the dealing with the day the shareholders decide to sell the business you are running.
So for the new CEO, pace yourself. Whether you are verifying the information, building checklists, delegating, following up or overcoming the show stoppers think of the job more as a marathon, not a sprint – and those the show stoppers as you will face a few of them every year you are in the job.
Stuart Morley MBA is a world renown keynote speaker and advisor to mid-sized companies during their restructuring phase. Find more information on mid-sized companies which includes video clips, articles and order his recently published book.
