Every incoming chief executive must confront a wide range of new issues and new pressures. The board of directors, a new executive team, matters of strategy and operations, a host of new stakeholders: These are all the responsibility of the first-year CEO. How the new chief manages these often competing interests during the first 12 months will go far in determining the success or failure of his or her entire tenure.
In conjunction with Booz & Company’s annual study of CEO succession, in early 2012 we met with 18 CEOs of major corporations around the world — some still in their first year, others more seasoned — and asked them to reflect on their own experiences as new CEOs. In the following “virtual roundtable,” we present some of the highlights from those interviews, in hopes of providing readers — including new CEOs and executives who aspire to be CEOs in the future — with the full flavor of the thoughts, guidance, and advice of the CEOs we talked with.
— Ken Favaro, Per-Ola Karlsson, and Gary L. Neilson
S+B: When you were first appointed as the CEO of your company, how did you prepare for the role?
Ronnie Leten: I knew well beforehand that I would be the next CEO at Atlas Copco. The chairman, Gunnar Brock, who was my predecessor, and I discussed what the time period should be from announcement until I took over, and that worked well. We agreed to take four or five months, so that I had the time to get more acquainted with some of the issues, and to allow people to get used to the change. So Gunnar Brock and I did a couple of trips to larger markets where we felt we should show up together. This helped because I hadn’t had much exposure up until then. It was for me a rather new world, and it gave me the time to get into the role.
This made me feel much more confident, because I had time to get more used to the business and the responsibility. I also had time to find a replacement for myself, because I was still running the compression business and we needed to find another person to make sure that when I took over, I had my hands free to do my new job.
Severin Schwan: I too was an insider. I came from Roche’s diagnostics business and was familiar with the board and my executive colleagues, but didn’t know all that much about the scientific side of pharmaceutical R&D. My approach was to use my transition to dive into the area I knew least well. I found a very senior pharmaceutical executive whom I knew from the past, and who had retired in the meantime, and could help to teach me. He had enormous expertise in the area, but he was also known to be able to explain things in straightforward terms. I contacted him and he was very helpful — even excited to help me.
I also went to the labs and looked at the different projects. And I had practical discussions with people in the labs on very specific diseases and compounds. In doing so, I filled dozens if not hundreds of pages of notebooks with graphs and cells and signaling pathways. I spent a lot of time on this, and I believe it really helped my preparation.
José Antonio do Prado Fay: I think the initial challenges are different if the new CEO is an insider or has been recently hired for the position. For an insider, it is critical to clearly understand and leverage the differences between the new CEO and his predecessor, and to quickly develop an approach to positively engage and lead the existing executive team.