first 100 days
As you already know, I am keenly interested in how CEOs manage their tenures. In my book on CEO reputation, I referred to the various stages of a CEO’s tenure as the seasons of a CEO. When I wrote it several years ago, it started with the Countdown period (pre-announcement), the first 100 days, the first year, the middle years and ends with the last 100 hours and legacy-setting. Since then, I have continued to follow CEOs closely but have been particularly fascinated by how CEOs can use social platforms to build their companies’ reputations and to some extent, their own. That is what I explained in this new article on CEOs getting social in their early tenure. (See also Weber Shandwick’s Socializing Your CEO II)
Surprising to me, despite billions of people communicating and socializing online, little has changed in experts’ advice to CEOs or other executives on how to navigate their early tenure by taking advantage of social tools. In three separate research investigations on how CEOs spend their time by Harvard Business School, the European University Institute and the London School of Economics, and Fondazione Rodolfo Debenedetti, the words “social” or “digital” did not appear once in the nearly 30,000 words written. Management consultants’ white papers on CEO transitions reveal little attention to how to effectively use social platforms. I have about 15 articles with smart advice on CEO successions and transitions that I send to new CEOs and not one mentions using social media. Further still, an online search of the most relevant 30 hits for “how CEOs should use social media in their first 100 days” does not retrieve a concise blueprint whatsoever. Instead, the mentions consist of lists of Twittering CEOs, reasons why CEOs don’t use social media, events and primers for getting into the social game, articles written by CEOs of digital agencies, and do’s and don’ts for CEOs who use social media.
Social media should be incorporated into new CEOs’ early playbooks. Whether CEOs are communicating, engaging in two-way conversation or simply listening in, social media platforms should be gradually adopted. As technology increasingly permeates all aspects of business and society, CEOs cannot afford to be out of touch with their cultures, how their products or services are being received and what their competitors are up to. Moreover, as the next generation of technology-literate CEOs start taking office as 77 million baby boomers leave the stage, being socially-literate will become the norm, not the exception.
For these reasons and because all these management consultants seemed to be overlooking social media as a leadership tool in their early CEO days, I wrote this article titled Get Social: A Mandate for New CEOs. It just appeared this week on MIT Sloan Management Review’s nicely redesigned Social Business site. Please take a look if you are a new CEO and getting the social bug! Or if you are advising CEOs to jump on the social bandwagon even a little. I firmly and proudly believe that this might be the first (or among the very first) articles on how and why CEOs should be social citizens at the start of their tenures and not wait til their seasons come to an end. There are some great examples from CEOs and presidents of companies such as Aetna, Etsy, GM, MassMutual, Best Buy and BAE.
Boston Consulting Group issued a new report about debunking the myths of the first 100 days. It is worth reading if you are a new CEO. Several facts are worth sharing here however and I already dropped some into my presentation on steps CEOs should take in their First 100 Days. Since I wrote a book on the various stages of CEO tenure and how CEOs build reputation from day one to the very last hour, I try to update it as often as I can to keep up. CEOs have to keep up too because their first 100 days provides them with less time than ever before to get it right.
In one sidebar, the article describes how the CEO job has changed due to the growing complexity facing the modern day CEO. BSG found that organizational complicatedness (their word) has risen by a factor of 35 compared to 1955 (when the Fortune 500 was first created!). Many of these changes we already feel but BCG attaches facts and figures to these changes which are good to have.
Far more complex world for CEOs
• Number of performance requirements is 6X more than in 1955. Then, CEOs were measured against 4 to 7 KPIs vs. the typical 25 to 40 KPIs now.
Far more scrutiny for CEOs
• Many more stakeholders are now watching every step that new CEOs take These include activist shareholders, board members, regulators, lobbyists, online pundits, NGOs, consumers, media.
Far more dispirited workforce
• New CEOs are starting when falling employee engagement levels have dropped as much as 14%.
• Among U.S. employees, job satisfaction plummeted about 60% in 1990 to less than 43% in 2010.
I truly believe that the disengagement of the workforce is one of the biggest challenges facing CEOs. And what CEOs do in those first 100 days can make or break their tenure’s success. This is why I believe it is time for new CEOs to get a bit more social, like online!~
When new CEOs start in their jobs, their early actions or what they say at their first retreats with the senior team are memorable. Everyone is on high alert and wondering if things will be different, how their new CEOs will establish legitimacy and set a new tone. So my CEO First 100 day antennae were up and ready for incoming signals at our first senior team meeting with our new CEO. It was a great meeting, lots of discussion, priority-making and theme setting. But what pleased me most was what I would call establishing a CEO signature. Sometimes it could be as simple as handing out books to the team that they should read, inviting certain types of guests or inviting new people to the table. Everything matters because everyone is reading the tea leaves — what does this mean? what signal is he/she sending?
So I was pleased when our new CEO, an insider, began the meeting reading parts of an email that someone had sent him earlier that morning about a meeting with a potential new client. The email was about the 6 reasons to love my company, Weber Shandwick — Smart people who respond even when they are insanely busy, a core group you can always depend upon and never let you down, knowing what great looks like, pride in the people in the room with you and share the company name on their business card, our new business people who always have your back 24/7, and colleagues who always set the bar higher. Then later in the morning, our new CEO read another email he had received from a major business publication praising the firm on their responses to interview clients for a story. He wrote that he just had to let our new CEO know that he has never seen a pr firm respond with such rapidity, thoughtfulness, thoroughness and smarts.
At that moment I decided that this had to be our new CEO’s signature….sharing these kinds of notes with the team. First, it felt great hearing what people had said about the company and second, it was all about the work and colleagues. It just felt so right. I immediately thought of how President Obama reads 10 letters a day to see what people are thinking. I had just read a note he had sent to a young girl who has two dads and asked the President about being teased at school and asking him what he would do. The President wrote the little girl with his advice.
CEOs must get amazing notes — good and bad. It makes sense to let everyone hear how the firm makes an impact in unexpected ways that do not get shared every day. There was some drama in the emails being read which I loved. It deepened the sense of a shared experience and community which is what a CEO should try to instill, especially at the outset.
Just caught up with my November HBR. There is an excellent article by the CEO of Siemens, Peter Loscher, on how to use a scandal to activate change in an organization. There is a section in the article on Loscher’s first 100 days, a favorite topic of mine. He says that he was the first chief executive at Siemens who came from the outside and mentions how it actually worked to his benefit because he brought an outside perspective to his early start.
In the article, he mentions that one of the things he wanted to do in year one (post 100 days) was to get the organization more focused on customers. And then he proceeded to explain how he did it. I thought it was such a cool idea that I wanted to share it. Here is what he said:
“In my first year, I tried to find other ways to emphasize to the entire organization that customers should be our primary focus. Once a year, our top 600 or 700 managers gather for a leadership conference in Berlin. Before my first one, in 2008, I collected the Outlook calendars for the previous year from all my division CEOs and board members. Then I mapped how much time they had spent with customers and I ranked them. There was a big debate in my inner circle over whether I should use names. Some felt we would embarrass people, but I decided to put the names on the screen anyway.
The rankings were a classic bell curve, with most people in the middle. I was number one, having spent 50% of my time with customers. I said to the people at the leadership conference, “Is this a good sign or a bad sign? In my opinion it’s very bad. The people who are running the businesses should rank higher on this measure than the CEO.”
I put the rankings up again in 2009, in 2010, and in 2011. And now things have changed. The curve has shifted. Some people have passed me, and most are near me at the top of the distribution—because everybody knows this matters and that names will be up there at the next leadership meeting. With this simple approach we have achieved a much, much stronger emphasis on customers in the top management echelons.”
What a smart way to get management focused on being customer-driven. As he concludes, “But if you want to change a big, complex organization like Siemens, you have to make your agenda known, and you have to communicate in simple terms.” I’d say taking stock of everyone’s calendars and tallying up the time spent on customer activities, sent the right message, clear as a bell.
In an article today on the academic dream team that consulted with President Obama’s team, a few lessons are shared that should be helpful for the public sector and CEOs or other executives. The group of behavioral scientists who were unpaid advised that voters focus on two characteristics in choosing a president or leader – competence and warmth. This is especially good advice for new CEOs coming into office to hear. The article states that Romney had the competence factor working for him but less so the emotional warmth factor, particularly with all the negative advertising that many people saw. Clearly, CEOs have to project both factors to gain support from their followers.
Another lesson to be learned that was shared in the article is useful for companies facing crises (who isn’t?). The social scientists that made up the dream team advised the Democrats running the Obama campaign that when it comes to neutralizing rumors, it is best not to deny the charge but to affirm a competing one. The example given was how the rumors about President Obama being a Muslim stuck over the long term but their advice (and probably well taken) was to counteract that rumor by asserting that Obama is a Christian. I do recall hearing that. Good advice that can apply to corporate leaders faced with hearsay and wanting to deflect innuendos.
What a day for female CEOs. Marissa Mayer becoming the CEO of Yahoo! and lo and behold, she is having a baby. Talk about agita. I thought it would be interesting to see how many mentions of pregnancy came up when searching for Marissa Mayer and Google or Yahoo! So I started by first looking at Marissa Mayer and Google or Yahoo! There were zero mentions on the days leading up to the announcement (good to hear that there are some secrets in this world) but on the day of the announcement (7/16), there were 125 mentions and 449 one day later (7/17).
What about when we add on “pregnancy.” On Day 1 and 2, there were 70 mentions of Marissa Mayer and Yahoo! and pregnant or pregnancy. It felt like that is all I read about so I was surprised that there was not more.
However, what would happen if we looked at Marissa Mayer and Yahoo! and pregnant or pregnancy compared to Marissa Mayer and Yahoo! and “qualified” or “qualifications” or “qualification”? Oops, there were only 9 mentions. So the PREGNANCY of new CEO Mayer at Yahoo! outweighed mentions of her QUALIFICATIONS about 8 times over. That sounds like a story in itself.
As my colleague Liz said to me, “She really blows the first 100 day CEO model out of the water. Maybe this is a new book for you to write, Leslie. Your new model can be segmented by trimesters.” That certainly got me laughing.
Just read this article in Forbes about Amazon’s Jeff Bezos’ number one leadership secret. I’ve followed him for years and enjoy reading about how Amazon has grown from a bookseller to an everything store online. I had already been thinking about about the importance of employees and customers for new CEOs when I read that Bezos’ number one leadership secret is that the customer is always right. There is this example described in the article that when Bezos calls meetings, he leaves an empty seat at the conference table for what he calls the customer’s seat. A potent reminder to bring the customer’s point of view to the table. The article hints at the fact that Bezos has built his hugely successful business bent on “coddling his 164 million customers, not his 56,000 employees.” This has me wondering that in this age of the Internet and social media galore, if customers are now more important than employees, maybe because of sheer size? The pendulum seems to be swinging again anyway. It used to be that all business activities were primarily all about customers, then all about employees and now… it’s all about equal parts’ employees and customers but with customers gaining the upper hand again. The Internet has created a sense of urgency about how satisfied your customers are. Probably because they spread word of mouth more quickly and seem to have more power than employees. They can advocate or criticize your business approach or customer service online for all to see. They have more power because they have so many choices from which to buy from. The answer for new CEOs, however, appears to be focusing on employees with a healthy dose of understanding what your customers want and quickly scaling to reach them online to confirm what employees are telling you. Something to think about over the next few weeks. Whose more important — employees or customers for new CEOs and CEOs who’ve been in office for some time?
1. The World Economic Forum released its report on the top risks facing the world in 2012. Social unrest and income inequity were at the top. Natural disasters such as the earthquake in Japan were also high on the risk list. And as pointed out, one risk affects another creating a domino effect. “The Internet, meanwhile, can magnify and spread the effects of a disaster in other ways. Rumors, even if incorrect, spread quickly on social networking sites — sometimes more rapidly than emergency services can communicate accurate information. As word of disasters like the terror attacks of Sept. 11 or the earthquake in Japan spreads globally, consumers hunker down in front of their computer screens or televisions, rather than going about their daily lives. This increases the economic effects of a crisis, even in areas far removed from the source.” Disasters such as the horrific earthquake, tragic 9-11, death-defying financial crisis, massive oil spills and nasty ash clouds coming from Iceland all heighten other risks in some way. And risk spells reputation damage depending on how a company or country responds and solves the problem.
2. The report from WEF also mentioned that risks are on the horizon as leadership transitions are in full force this year. It is not just the U.S. presidential election that poses risk and stirs up emotional angst. There are leadership transitions underway this year in France, Russia and China as well. Add to that the sudden transitions in the Arab world this past year and we see upheaval and uncertainty. When CEO transitions are underway, the first few months can be risky so as we see world leaders change, tighten your seatbelts. The public will be more socially active than ever. We’ve already seen that in Russia.
3. I’ve written here about rankings and so-called “worst of” lists where companies, CEOs and environmental records are put on notice that they are not making the grade. In most Januarys, TripAdvisor.com comes out with its “dirtiest hotels” in the world. No more. The CEO Stephen Kaufer says, “We want to stay more on the positive side, so we’ll continue to feature the best destinations, the top hotels. We’re slicing and dicing the ‘best of’ in different ways this year, more than focusing on the negative.” Although the article where I learned about this says there were potential legal considerations and competitive reasons for abandoning the January list, it also mentioned that the original “worst of” list was done for PR reasons and that TripAdvisor is less interested in that now. Perhaps there is a reputation-reason afoot here. There is so much negativity online on some of these sites and it is so easy to find what you are looking for that a list of the 10 worst may be hardly worth alienating visitors to your site. Everyone worries about the detractors and the praisers. Maybe it is time to just worry about the average site visitor who does not want snarky comments and lists, but just the plain old straight forward facts to plan a plain old relaxing get-away.
RHR International was mentioned today in an article in the WSJ about the recent revolving door for CEOs. Not that this is new. CEOs have been coming and going for some time now. But what was new was that among the 83 CEOs of publicly held companies surveyed, the board seemed to be a greater source of tension than it used to be. Nearly three quarters wish they were included more in board discussions of succession planning. And as one would expect, the top two threats to their tenure, according to CEOs, were the current economy (39%) and rapid industry change (22%). However, a third top threat to CEO tenure was strategy disagreements with the board (17%). As a watcher of CEO trends, I find it noteworthy that CEOs mentioned disagreements with boards and desire greater collaboration over transitioning. The disagreements over strategy (spin offs, shedding assets, etc) does seem to be a rising cause for CEO exits these days. Something has changed. I wonder if the new tension that is developing is because boards are more active now because of the criticism that they were no more than a rubber stamp on CEO activities or if the strategic choices facing boards today are infinitely more complex and disruptive. When no one knows the true answer, there is room for disagreement. CEOs and boards seem to be caught in this new tango.
Another finding which I liked seeing because it provides some hard numbers about something I have observed was that half of CEOs feel isolated and lonely. For this reason, CEOs should reach out to other CEOs in different industries, find mentors or retired CEOs to talk to. It can be debilitating so finding an ear to listen and advise is highly recommended.
Because I am off from work for the holiday, I have a little time to catch up on things I meant to read in the months before. I was particularly interested in some research on CEO transitions and its impact on the value of the enterprise conducted by FTI. A few facts jumped out at me from their study among the financial community. They found that one-third (32%) of investor decisions are impacted by the reputation of the CEO. Moreover, the reputation of the CEO was more important to investors than the reputation of the company’s products and services.
The research covers the value at risk depending on what type of CEO transition occurred. The greatest risk to the enterprise is when a CEO is forced to resign.
Because of my work on CEO tenures and how to build CEO reputation, the findings confirm my own research over the years that CEOs need to show success by that 12 month marker. FIT found that investors give new CEOs about six months to assess the challenges and opportunities facing the company, setting a vision and strategy. They give new CEOs more leeway to improve market performance and valuation — about 12 months. After the first year, all engines need to be firing.
Another particularly interesting finding was what investors look at in their first 100 days to further establish the CEOs credibility in their eyes….here is what they said was of “significant importance.” Despite the ranking for “charisma,” it is still interesting that it is still estimated to be of high importance and only 16% said it was of limited importance. FTI concludes that investors take a multi-dimensional view of new CEOs. They expect to see it all.
|During First 100 Days Of A New CEO||“Significant importance”|
|Grasp of the company’s challenges and opportunities||96%|
|Knowledge of/experience with industry dynamics||92|
|A strategic plan||88|