January 2020 has seen the most CEO exits in recent memory. More than 219 CEOs stepped down or left their roles at major companies in January. This included significant announcements from companies like Disney and SalesForce, as well as IBM and Match.com.
There is almost no business sector that hasn’t been impacted in the last few years by the departure of the top brass thanks to a variety of scandals, “personal reasons,” or just plain retirement. In fact, in the first nine months of 2019, more than 1,000 CEOs departed their positions for one reason or another. The story in 2018 wasn’t much better. According to the Public Relations Society of America, or PRSA, the turnover rate in the c-suite was the highest it’s been in 10 years.
The truth is that business can be chaotic at best. News moves fast, and if you work for a publicly traded company, stocks and investor sentiment move even quicker. As a member of top management, you could have to step into the CEO role at any moment. So what’s the best way to prepare for that opportunity?
I have many years’ experience as CEO of U.S. Money Reserve, one of the largest private distributors of U.S. government–issued gold, silver, and platinum coins, under my belt. Being a CEO is not easy, and there are many things that I wish I knew as I came into the position. Here are the top three things I want all new CEOs to know in order to succeed.
Learn to See the Forest for the Trees
In order to be a successful CEO, the first thing you need to learn to do is to figure out how to see the big picture. CEOs operate at both the ground level and at 30,000 feet. Being able to switch between the two perspectives is crucial to being a successful CEO.
When you first become a CEO, you tend to want to go deep into the things you are most comfortable with. If you came up through the ranks with a sales background, it’s likely that you will feel you can make major, quick improvements to the sales force or sales methods once you become CEO. I’m here to tell you that in order to be a great CEO, you need to be wary of that instinct.
Here’s why: While it’s essential to understand the nitty-gritty details of how the work at your company does get completed, you don’t necessarily have to know all the ins and outs of every process. Some CEOs can become so focused on the details that they lose the vision for what is around them, what is going on in the marketplace, and what their customers are actually asking for. This can be incredibly detrimental when it comes to managing a large corporation. You can get stuck in the weeds while the rest of the company moves along without any leadership. That’s never a dynamic you want to set up. After all, you are the CEO of the whole company, not just the division that you feel most comfortable with, so be sure to keep your attention broad when you first begin.
Getting involved in the tiny details of day-to-day processes also smacks of micromanagement, and that’s absolutely one sure way to cut your CEO tenure very short. No employee enjoys being lorded over as they do their job, so be sure that you take a step back and get a grip on the big picture.
The best way to make sure that you see the forest for the trees is to ask yourself and your staff the following questions:
- What key relationships matter the most to the success of the company and to the employees?
- What levers do I have at my disposal (sales, marketing, inventory, etc.) to improve the current state of the business? What is the easiest lever to pull, and what is the most difficult? What risks does the company run by using those levers to improve the state of our business?
- What external factors limit the company’s ability to do the best work it possibly can? Laws, regulations, economics, world crises, and other issues can derail well-laid plans for any company. So consider: What potential risks are there in the current marketplace? How can you and your team best prepare for and handle them? What is just over the horizon?
You Must Let Go of “Running” the Business
Stay with me here. I know this sounds like a whole bunch of gobbledygook.
If you are like I was and came up through the ranks of a single company, trained your whole life for the role as CEO, and have just stepped into the position, there’s one thing that you should absolutely understand as you take these first steps: As CEO, you can no longer run the business.
You’re probably looking at your computer screen right now and thinking, “Wait, what?” Read that again, slowly. You can no longer run the company.
What exactly does that mean? Well, as Harvard Business Review (HBR) points out, the demands on your time become far more externally focused than they were when say, you ran a specific line of the business. You have media interviews, analyst calls, meetings with shareholders, meetings on Capitol Hill, and other demands outside of the company that require your time, attention, and hard work. While all that is done in support of the business, you are not actually working on the business at all. Don’t worry—you aren’t failing at being CEO if you suddenly spend 80 percent of your working hours doing things outside of the company. It is just the nature of the position.
That’s not to say you won’t still have major business decisions to make internally, nor does it mean that you won’t set the overarching goals and to some extent, the strategies that go into making your company successful. It just means that you’ll find your time is more consumed with external requirements, rather than those nitty-gritty details that get right at the heart of how your company makes money. You’ll still be responsible for how your company makes money—you just won’t be as involved in the day-to-day decision making as you were previously, and that’s okay.
One thing to note is that you may feel a certain sense of loss when you move from managing a specific business line to managing the entire corporation. As the HBR story points out, it’s possible that you once prided yourself on being able to visit every plant and know every line manager by name. Now that you are CEO, you simply cannot do it all, and you may feel a sense of loss over that. Know that there is nothing wrong with feeling that way, and, as you adjust to your new role and settle in, know that you’ll find the right balance for you and the company.
Don’t worry; it takes time to get your “c-legs,” as I like to say.
Trust Your People and Turn Fear Into an Asset
One of the critical elements of being a successful new CEO is to learn to trust your people. If you came from a line of business where everyone worked together like a well-oiled machine, it’s because trust and respect were largely at the core of what held the team together. Each person knew that his co-worker was going to do their job to the best of their ability each and every time.
Being a new CEO can feel precarious. It’s incredibly common for new CEOs to face some measure of fear. You can feel like the entire company and the whole world is watching and waiting for you to make one misstep. So how can you handle that pressure and turn it into a productive tool that will make you successful?
First, trust your people. At the core of any successful company lies people who make it work. If you need to make personnel changes, then do so. But your people, your closest advisors, and the people you ultimately work for (because as CEO you work for your employees, not the other way around) are the most valuable asset you have.
Second, turn your fears into strengths. As this Harvard Business Review story points out, by flipping your sense of fear on its head, breaking things down into smaller chunks, and setting “approach goals” rather than “avoidance goals,” you change your own psychology around the fear of failure.
Avoidance goals are all the things you are afraid of, while approach goals are motivated by the desire to have positive outcomes. It pays to list all the terrible things that could happen. Alongside that list, write all the things that you could do to repair anything that goes wrong. Then write down all the things that could happen if you don’t take the risks that you are fearful of and that you need to take to become a great CEO. Reframe your fears around the benefits that could come from the risk-taking and the costs that could happen should you choose to be inactive and do nothing. You may find that those fears fade away or lessen as you do this exercise. Once you have a clear idea of the landscape of your biggest fears, they have less control over you. This is an incredibly empowering exercise that can truly help new CEOs get comfortable with risk.
The Bottom Line
One thing to always remember, no matter where you are on the corporate ladder, is that we are all human. We are going to make mistakes, and we are going to screw up sometimes. It’s not the end of the world, and in fact, in every mistake, there’s something to be learned.
While becoming a new CEO may be a dream come true for you, it can be a very intimidating phase in your life. It can feel fraught with hidden pitfalls and full of new challenges that can be overwhelming, but I am here to tell you that if you follow these three brief tips for becoming a new CEO, you will shine in your new position. Don’t worry, keep it up, and you’ll be sure to get your c-legs quickly.