Talent Management

By: Paul Croteau
Date: November 22, 2009

Hiring any new employee is risky, but the most risky of all is the recruitment and selection of a new CEO… the Chief Executive Officer of an organization. With all of the challenges new CEOs face, the successful candidate must be able to quickly synergize their senior leadership team, develop strong achievable goals and put an action plan in place that will consistently meet those goals.

In spite of the fact that a new CEO did an incredible job in their interview, demonstrated a good fit for the organization through the psychometric assessment process and received high ratings with their references, they may still experience failure in their new job. Sometimes, especially when the new CEO lacks a breadth of experience or lets power go to “their head”, things begin to go wrong quite quickly. In fact, it is well known that if a CEO fails, they will most likely fail within the first eighteen months of their tenure.

So why do these new CEO leaders fail? What skills do they fail to apply in their new roles? Profiles International, a firm specializing in candidate assessments, suggests in their most recent report that there are five key skill areas where front line managers fail. In my view, these five key skills are quite accurate, and I add an additional sixth key element that I feel rounds out the list. Let’s examine each of these skill areas.

1. Interpersonal/communication skills – typically a new CEO will be stepping in to work with an established team, some of whom may well have been his/her rivals for the senior job. The task then is to get to know that team quickly and pull them together so that everyone is moving in the same direction. A CEO who fails in this task instead becomes a polarizing force, avoids contact with co-workers and, in some cases, develops a hostile attitude toward co-workers who share interdependent goals.  When this happens, the new CEO often becomes a target for sabotage.
   
2. Inadequate leadership skills – a weak CEO leader will create so much frustration amongst team members that it causes infighting and conflict. People complain of poor treatment, favouritism and lack of good decision making. Eventually, team members become disengaged, stop attending meetings and, in some cases, deliberately miss project deadlines.
   
3. Poor management of change – a new CEO is expected to bring about change, but if their change message is not clear, consistent and well supported, established team members will become skeptical and continue to do things the old way. When this occurs, the typical reason is a lack of team member involvement. In these cases the change message appears authoritarian and is not well accepted. As a result, the new CEO begins to lose credibility and team initiative declines.
   
4. Inability to deliver results – no matter what effort is made by the new CEO, if the senior team is not supportive, the ability to deliver results will be severely hampered. People will point fingers, blame others and make excuses. The CEO will begin to experience increased stress and, if they adopt a defeatist or negative attitude, may quickly put him/herself at risk.
   
5. Lost in the big picture - while strategic visioning is a key skill for a new CEO, some are simply not able to implement or integrate a vision for the entire organization. They fail to include the right people at the decision making table and they fail to share information that could be used to bring more people onside with their view. Finally, some decisions are detrimental to the organization because a full examination of the impact on the organization as a whole was not fully examined.
   
6. Failure to share power – lastly, one of the most critical CEO skills is the ability to share power. Those CEOs who quickly create personal risk are those who talk about teamwork, but instead take steps to make themselves the “power lord” of the organization. Once the management team recognizes this powerplay, the CEO will lose credibility, become polarized and eventually fail.
   

Our work environment is one of consistent challenge and change. We need senior leaders who are successful at managing themselves, their senior executive team and the organization. When the stakes are high, as they are with a new CEO, organizations need to be aware of risky behaviours and be prepared to step in and provide support.

Source: Five Critical management Derailers: Symptoms and Remedies, Expert Insights, Profiles Research Institute, 2009

Research and Review by 6PMarketing

Paul Croteau, B.Comm., CMA, FCMA is a partner with Waterhouse Executive Search Partners, a Canada-wide executive search firm. He can be reached at This e-mail address is being protected from spambots. You need JavaScript enabled to view it or 204-934-8821.