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(originally published by Booz & Company)


Navigating the First Year: Advice from 18 Chief Executives

José Ricardo Mendes da Silva: There’s always some sort of crisis in the CEO’s first year — something that probably led the former CEO to leave — and it is key to initially focus exactly on the issues related to that crisis. In my case, the company was losing market share, which led me to see things from a new perspective. For example, I had to start looking more at revenues, rather than costs, as I had been mostly doing in my former position as CFO. Later, I started to focus on products and portfolio. This required a comprehensive approach, with many actions, including creating a new methodology to promote innovation and changing the management team.

Masami Yamamoto: Fortunately, we have many shareholders who have owned Fujitsu stock for a long time. This means that we do not necessarily need to concentrate on short-term results, but can build strategic and sustainable strengths for longer-term stable earnings growth. Having these shareholders’ understanding of the need to invest in internal capability enhancement is a critical task for the top management.

S+B: So the new CEO must make sure to extend his or her outlook beyond internal matters?

Romain Bausch: Absolutely. Look at all the different stakeholders of the company and define your position toward each of these groups in the first year. With the board, come to an agreement about corporate governance, about responsibilities, about the delegation of power and authority, and about the strategy. Then take the time to build up your relationship with the employees — to communicate with them, to explain to them changes that you are making in the organization — and then try to get them on board and don’t try to do this without their support. The third group is composed of your customers. Make yourself known to all the customers, go and meet with them; get up to speed right from the beginning of the relationship, and make clear that you take contact at CEO level.

You have to look at your environment in its entirety and find the time to develop the relationships, the strategy, and the approach toward each of these stakeholder groups right from the first year. You cannot say, “This year, I will do this, and next year, I will do the other.” That would be a big mistake.

Osman Sultan: What I would say to a new CEO is to draw a diagram and put yourself in the center. At the top of the vertical line, put your board and shareholders; at the bottom of this line, the management team and employees. On the left of the horizontal line, put what we can call the “market-driving factors” — customers, distributors, industrial partners. On the right, the external, “non-market-driving factors” — regulators, media, academia, and so on. Then quickly identify the people on each of these fronts that you can trust to deliver. This is the radar screen you should look at every morning to ensure that you’re not losing control of any of these things that could snowball very rapidly in any startup. As a CEO, you cannot afford the luxury of not being active on all these fronts.

Severin Schwan: Transparency with all your stakeholders is absolutely key. The moment you put issues or risks on the table and speak about them openly — with the board, with your colleagues on the executive committee, with external stakeholders, media, and investors — that in itself creates trust. And that in turn triggers support: The moment you frame the topic, people become very interested in making it better and working at a solution.

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