By John A. Haas
Management Strategies Group
You've been running your company for a long time and it's time to cut back. You feel your kids aren't ready to take over or your long-term employees have too little outside experience to run the company. Or you're an inactive investor and aren't sure the long-term CEO can achieve your expected ROI. So you decide hire an experienced outsider.
The Search
What are the specs? You probably want someone with hands-on experience in general management, with a record of achieving significant growth and profitability. While industry-specific experience may not be necessary, you want someone who's managed planning, budgets, operations, people, technology, etc. in somewhat compatible industries in companies of comparable size (and preferably larger) than yours.
By whatever process you choose, you finally narrow down your search to a few candidates you feel understand the current situation and desired future state for your business. Finalists should be interviewed by future peers, subordinates and other relevant inside and outside stakeholders, to assure a "chemistry" comfort level. Assuming you're able to negotiate appropriate compensation, benefits, equity participation, etc. you've got your new CEO.
Starting Right
Armed with an understanding of your current business condition, needs and opportunities, your new CEO will typically start by spending time with the management team, other key employees, customers, vendors and outside business advisors to learn what they do, their perceptions of business and organizational problems and possible solutions.
Based on these conversations and past experience, your new CEO can probably quickly identify and prioritize needed corrective and proactive actions. To both jump-start the company down the right path and to impress you with his/her acumen, decisiveness and results-orientation, he/she will go ahead taking needed steps and making changes.
What's wrong here? There is a good likelihood of falling into the "being right but not effective" trap. While it may not necessarily be efficient, the new CEO runs the risks of a) not sufficiently considering the corporate "culture" into which the changes are being made; and b) not taking the time communicating about the changes to get enough "buy in" from those effected and involved.
The point is the new CEO must connect to the existing culture. People whose knowledge gained through long, loyal service to the company should not be ignored nor trivialized.
Summer 2001 - Volume 11, Number 3