Last week, I highlighted the high level of CEO turnover so far in 2018 and offered some thoughts on introducing a new CEO to the Street. This week, I want to share some insights gleaned from research conducted by leadership advisory and consulting firm EgonZehnder to help investors relations officers become more fully aware of some of the behind the scenes dynamics of a C-Suite transition.
First, it pretty much goes without saying that new CEOs – both internal and external hires – need a acclimation period to fully understand the company’s issues and formulate a plan. But its more than that. You’ve probably heard the phrase “what got you here, won’t get you there.” The knowledge and skills built over a career of “doing” (executing) is necessary, but not sufficient to “being” a CEO.
“Being” is the operative word here. The CEO role is an intensely transformational role and in this sense the acclimation period is never truly over. The CEO role is one that must be inhabited and embodied according to EgonZehnder’s CEO survey. During the transition period, new CEOs need to not only gather and assess information, but also accelerate their ability to internally reflect and become more self-aware in their decisions, actions and feedback received. It’s a process that never really ends, although CEOs get better at it over time.
This is why a less is more approach with investors is generally best in the first few months. It provides space for the new CEO to internalize some of the transformation required. However, new CEOs can be surprised at how little honest feedback they receive from the Board or senior management team, which can slow the transformation process. Investor Relations should be sensitive to this dynamic and may be able to help. Think of investors who have unique or nuanced insights and with whom it may be useful for your new CEO to meet with early on (in a listen-only mode) in order to gather perspectives helpful to setting strategic priorities.
Next, new CEOs are also new to navigating board relationships. Let’s face it: The Board may have chosen the new CEO, but the CEO didn’t choose the board. This can make for some interesting dynamics as the new CEO asserts their leadership and gets to know the board individually and collectively. A focus on value creation and understanding of the investor perspective is important in aligning the board and CEO around a strategic vision. Investor relations can play a role here as a steward of the shareholder perspective.
The EgonZehnder CEO survey also indicates new CEOs sometimes don’t realize how important communications experience and skills will be in their new role. The need to come up to speed quickly is something investors relations can support. IROs are typically well experienced with message and Q&A development, rehearsing presentations and media training, so they can be pivotal in providing some coaching in these areas to strengthen a CEO’s presence.
IROs spend a lot of time with CEOs. A solid relationship is important to the success of both. By understanding that C-Suite changes are just as much about transitions as transformations, investor relations can contribute to stronger and more impactful individuals and organizations.
Lead-IR Advisors, Inc.
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