Business Leadership: How a New CEO Can Effectively Lead Their Team

Authored by Brett Dougherty & Julia Jiang

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Business Leadership: How a New CEO Can Effectively Lead Their Team

Brett Dougherty & Julia Jiang

Introduction

Transitioning into the role of CEO is a monumental step, one that brings with it immense responsibility and the opportunity to shape the future of an organization. A new CEO must navigate complex challenges, from driving innovation to managing economic uncertainties, all while fostering a positive and productive workplace culture. Effective leadership is not just about making decisions but also about inspiring and guiding a team toward shared goals. This article delves into the strategies and principles that new CEOs, both promoted from within or hired from outside, can adopt to lead their teams effectively, ensuring long-term success and resilience in an ever-evolving business landscape.

Analysis of Issues and Their Relevance to CIAG Clients

New CEO’s must balance between adopting a patient approach and building trust and credibility with employees

Navigating the delicate balance between establishing a patient approach and swiftly building trust and credibility with employees is a critical challenge for new CEOs. As highlighted by Harvard Business Review, despite outward expressions of support, skepticism often persists behind closed doors, making the journey to earn confidence a prolonged one. Rushing into bold initiatives without first securing broad stakeholder trust can lead to setbacks. The recommended approach emphasizes strategic pacing, deliberate stakeholder engagement, and clear communication to foster trust gradually. By methodically demonstrating reliability and alignment with organizational values over the initial two years, our clients can lay a solid foundation for sustained leadership success, as evidenced by the long-term confidence premium observed in successful CEOs' tenures. Failure of new CEOs is often linked to performance pressure, as they feel the need to produce quick results that meet stakeholder expectations, often at the expense of long-term strategy. Deliberate strategy not only mitigates risks but also sets the stage for enduring organizational alignment and performance improvement.

Power Conflict

No succession is easy. Because the process involves people in positions of power, the dynamics are political in nature and therefore difficult to manage. Both incoming and outgoing leaders have their own objectives, thus influencing each other.

The outgoing CEO may be more focused on enhancing his legacy by emphasizing his achievements rather than supporting his successor. He might insist on continuing his preferred projects, ensuring his key team members stay in place, and leaving on his own terms rather than the board’s.

When powerful players have conflicting agendas, tensions can quickly escalate into conflict, centering on who holds power, who seeks it, and how it is wielded. For a successor, especially a first-time CEO, this can be disorienting. While she may have excelled in clear operational or functional roles and consistently surpassed expectations, success at the top demands acute political awareness, strategic use of power, and strong influencing skills. Mastering these abilities is crucial for new CEOs.

Here is a failed example of a new CEO according to the Harvard Business Review. Jeff was chosen as the next CEO of a fast-growing healthcare company due to his extensive operational experience. However, early signs of declining revenue and profits emerged as he took over. He had never been a CEO before, and in his previous jobs, he’d had little interaction with the firm’s independent directors. He struggled to understand the board’s points of view and overestimated his power and room to maneuver. Jeff’s reserved style contrasted with the outgoing CEO's charisma. He made missteps such as criticizing the previous CEO and retaining a controversial direct report, which damaged his credibility with the board. Most importantly, he did not invest enough time in understanding the board’s expectations and concerns. Seeing a chance to gain power more quickly, Jeff conveyed to the independent directors that it would be best if the CEO left even sooner. As their relationship soured, tension increased within the senior management group. Eventually, things calmed down, but Jeff never overcame the poor start. Then the pandemic leads to a collapse in company growth and investor confidence. Lacking the former CEO's support, Jeff was fired before completing his first year as CEO.

Handling Global Economic Uncertainty

Navigating economic fluctuations, technological changes, and competitive pressures adds layers of complexity to the decision-making process of a new CEO. When a new CEO steps into their role, they are immediately confronted with numerous unknowns and unpredictable factors that can impact the organization’s performance and strategic direction. According to Forbes, global economic uncertainty is a major influencer when it 

comes to leadership. Forecasts from the International Monetary Fund show that global growth has slowed over the past three years. Stagnant growth paired with uncertainties such as COVID-19, political turmoil, monetary policies, and supply chain issues add another dimension of stress for a new CEO to handle. CEOs can steer their organizations through these challenges by making informed strategic decisions, fostering a culture of innovation, and building a strong leadership team.

How CIAG and Business Consulting Can Help Overcome the Challenges of Being a New CEO

Innovation & Growth

Navigating the challenges of a new CEO role demands not only strategic vision but also a robust approach to fostering innovation and growth, with business consulting playing a pivotal role in overcoming these obstacles. Consultants at CIAG help new CEOs cultivate a culture of creativity, experimentation, and risk-taking by providing frameworks and methodologies that encourage employees to think outside the box and challenge conventional wisdom. Our consultants can also assist CEOs in strategically allocating resources to support innovation initiatives, ensuring the necessary tools, technologies, and funding are available. By leveraging market analysis and industry insights, consultants help identify emerging trends and new opportunities for growth, allowing organizations to stay ahead of competitors and adapt to changing market conditions. Business consultants also support CEOs in driving strategic initiatives by providing project management expertise, developing detailed project plans, setting clear objectives, and establishing key performance indicators (KPIs) to measure success. Furthermore, consultants help CEOs build confidence among stakeholders by demonstrating a commitment to innovation and growth through effective communication strategies that convey the organization’s vision and progress. Comprehensive communication plans, including regular updates on innovation projects and milestones achieved, help maintain stakeholder trust and confidence. By integrating these consulting recommendations, new CEOs can effectively foster innovation and growth, ensuring their organizations are well-positioned to thrive in a competitive and ever-changing business landscape.

Collaboration & Strategic Partnerships

Collaboration and strategic partnerships are crucial for new CEOs to overcome roadblocks, as they provide access to additional resources, expertise, and market opportunities. By forming alliances with other organizations, CEOs can leverage external knowledge, share risks, and accelerate innovation. Strategic partnerships facilitate the exchange of ideas and technologies, enabling companies to develop new products and services more efficiently. Business consulting plays a vital role in this process by identifying potential partners, facilitating negotiations, and establishing frameworks for collaboration. Consultants at CIAG help CEOs assess compatibility, align objectives, and create synergy between organizations. They also assist in managing these partnerships, ensuring clear communication, mutual trust, and effective conflict resolution. Through strategic partnerships, CEOs can tap into new markets, enhance their competitive edge, and drive sustainable growth. Business consulting thus provides the tools and strategies necessary to build and maintain successful collaborations, helping new CEOs navigate challenges and seize opportunities in a dynamic business environment.

Nothing is Binary – Break It Down

As one of the few people with power, it is important to learn how to navigate conflict with the board. Leaders must proactively and productively make covert disagreements overt and foster a healthy dialog. Otherwise, they may fall victim to decisions made outside the room and behind our backs. Most of the time, the conflict between the CEO and the board is complex and not binary. Therefore, breaking problems down and looking at them piece by piece is a good way to communicate and reduce conflict. CIAG could help the leader to go through the issue and deal with it step by step. For example, If there are rumblings of dissension about a recent decision, doubts about a team member the CEO endorses, or concerns over low employee morale, the CEO should identify the sources of discontent first, understanding who has concerns, who is neutral, who has opposing viewpoints, and who agrees with the CEO. Since everyone's attitude is dynamic and complex, we cannot just divide people into two opposite parties, which may lead to severe conflict. Then, Instead of addressing the board wholesale on sensitive topics, the CEO should first work with individuals: seek allies and engage with dissenters, despite the inclination to avoid them. By engaging with individual viewpoints, the CEO can fully understand each perspective and prevent the issue from escalating. Approaching dissenters directly and with curiosity also demonstrates courage and confidence.

Moreover, when making decisions, a lot of conflict may be about choosing A or B. Each party would talk about their own benefit and hate the other choice. Author Barry Johnson calls these “polarities,” two interdependent opposites where both are essential over time to have a healthy, functioning system. In this situation, wasting time worrying about making a decision is not a smart way. Instead of arguing for one over the other, CIAG would emphasize how to maximize the upsides and minimize the downsides of both. We could let both parties temporarily take the other party’s side, and ask themselves: “I know my side is necessary, but if we only pivot to this side, what are the downsides?” Then, the CEO could be a bridge between two side’s opinions, pursuing them to compromise with each other and reach the maximized profit.