In the case of a CEO coming from the outside, the initial challenge is to have the humility to understand how and why the company works the way it does, before suggesting substantial changes. Don’t think up front that everything has to change. In both cases, however, it is crucial not to get excessively far from the operation.
Kunio Noji: I think it’s important for every CEO to begin with a very diverse set of experiences. Otherwise, it is difficult to break down the walls within the organization. In the old days at Komatsu, the heads of the business units didn’t even talk to each other, but that has changed over the years. I made sure to encourage our people to communicate as much as possible, between functions and between regions. What is important is to create the basic fabric of trust for the communication to work.
Britaldo P. Soares: I found that one critical activity early on at AES Brasil was listening to the firm. Not just the vice presidents and directors, but the supervisors, managers, and workers in general. We structured a program in which I interacted with at least 4,000 people; in each event, I made a brief presentation, then took questions for an hour or so. The key objective was to learn from the people.
Enéas César Pestana Neto: In my case, I soon realized that I was going to have to deal with a much broader agenda at Grupo Pão de Açúcar than I had in the past. Sometimes it is very hard to segregate your individual agenda from the CEO agenda. In order to do so, I had to read a lot, do a lot of self-reflection, and effectively change my mind-set. Initially, I had to deal with the large number of different topics the CEO is presented with, but then I started to find out where I should focus, and how to devote my time to what really mattered. In the process, I did a lot of reflection. What should I do to create sustainable value? What should be my style as CEO? I had to invest some time to know myself better. And I learned that evolving my management style created positive results. I think all new CEOs should spend some time to focus on themselves — their style, their priorities.
S+B: As you began that first year, who else did you turn to for advice and guidance?
Chip Bergh: I spent the first month mostly listening. I came up with a set of standard questions: What three things must we preserve? What three things must we change? What do you most hope I will do? What are you most concerned I might do? What advice do you have for me? I sent the questions out to every single board member, and to the top 65 people in the company. And then I spent an hour with each person and basically just listened and took notes as they answered the questions.
What was interesting was that after about 15 or so interviews, it was pretty clear what the objectives needed to be. People inside the company knew what needed to happen, and it was pretty consistent.
Ian Livingston: I found that as CEO of BT, the best advice I got when I talked to people wasn’t from boards, and it wasn’t from shareholders, external advisors, or brokers. The best advice I got was from the chairman, the CFO, and the HR directors. Because they’re the people who have to see across the entire business. They are the people who have a company-wide view and understand what the issues are.