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Published: May 25, 2010
 / Summer 2010 / Issue 59

 
 

CEO Succession 2000-2009: A Decade of Convergence and Compression

Luiz Carlos Trabuco Cappi (Banco Bradesco): I don’t believe in 100-day plans. They are based on a fallacy. Whether the new CEO comes from inside or outside the company, he or she should focus on continuity. The challenge is how to renew the company, while ensuring continuity.

Neil Kurtz (Golden Living): [Julius Caesar said,] “Go slow to go fast.” Caesar wanted to attack the enemy on the other side of a river. And he asked his engineers to build the bridge slowly so he could cross the river quickly. You want to get certain things right. And then, you’ll be able to move a lot more quickly.

Greg Wasson (Walgreens): I don’t think I have the luxury of slowing down the pace of change. I think I have to focus more on how to manage it effectively.

Severin Schwan (Roche): Managing the pace has a lot to do with determining how much the organization can digest. If it’s people decisions, I think you have to do it rather fast. Do not wait too long if you don’t feel you have the right people in charge. If it’s more about developing a common culture, building trust, I think you can’t force this. Slow it down.

Matti Lievonen (Neste Oil): Setting the right pace of change is a challenge. First, of course, you need to think through the overall scope of change you are considering. The challenge is then to launch and address things in the right sequence and speed. The top team can take a lot of pressure and deal with it effectively. The challenge is further down in the organization where there is a risk of overstretching.

4. Get the Culture Working with You

In the past, CEOs typically thought of culture change in terms of such formal constructs as vision, strategy, programs, and structure — which are commonly expressed in codified documents, protocols, metrics, and charts. But a focus on just these formal aspects of an organization overlooks the importance of informal interactions: networks, peer-to-peer relationships, work norms and habits, information and resource flow, and communities of interest. A high level of emotional commitment is at the heart of a peak-performing organization; thus, making good use of these mechanisms is integral to achieving lasting change and stellar performance.

Jan Lång (Ahlstrom): Culture is very important; indeed, the softer questions have risen in importance. We spend lots of time assessing who we are and how we act.

Neil Kurtz (Golden Living): When you start, you get a certain sense of what the language of your company is, how certain words are used. And then you begin to institute your own language gradually. And for CEOs to be effective, they need to be very consistent in how they use words.

George Barrett (Cardinal Health): Language can be the most powerful symbol you have. It is easily repeated, and it spreads if the message is crafted thoughtfully. The role of the CEO is to speak in the language that rings true to the culture and strategy of the company.

• Build on peer connections. Leaders typically think of culture as synonymous with values. But it’s more useful to think of it as information, influence, and insights that flow among peers. Whether you have a strong or a weak culture often depends on the strength and caliber of these peer connections. For example, when peers spend time telling one another why specific changes won’t work, it creates negative momentum that can derail even detailed performance initiatives. In strong cultures, peers reinforce an innovative and positive response to change.

Matti Lievonen (Neste Oil): The behaviors you see are like the tip of an iceberg. There is so much going on underneath the surface that drives these behaviors, and you need to find ways to address it all.

 
 
 
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Resources

  1. Corporate Leadership Council, “Creating Talent Champions, Volume I” (2008) and “Hallmarks of Leadership Success” (2003), Corporate Executive Board: The source of research on leadership development.
  2. Ken Favaro, Per-Ola Karlsson, Jon Katzenbach, and Gary Neilson, “Lessons from the Trenches for New CEOs: Separating Myths from Game Changers” (PDF) (Booz & Company, 2010): The practices that will substantially contribute to success for new CEOs.
  3. Per-Ola Karlsson and Gary Neilson, “CEO Succession 2008: Stability in the Storm,” s+b, Summer 2009: Last year’s study documented how the financial crisis had held down the rate of CEO turnover, except in hard-hit industries like financial services and energy.
  4. For more thought leadership on this topic, see the s+b website at: www.strategy-business.com/strategy_and_leadership.  
 
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