Posts Tagged ‘corporate leadership’
Image credit: Dilbert.com
There is generally a lot of energy and enthusiasm around the hiring of a new CEO; especially in a distressed company.
- Where did they come from?
- How great they are?
- Are they are going to turn things completely around in one quarter? NOT!
Excessive coverage by the media even before the new CEO officially arrives and during the early stages often makes matters worse! If a company is doing well, the CEO does not leave or when it is time to leave, there is a well planned succession plan. So, in the case of IBM, the January arrival of the new CEO was in the works for a long time, was a smooth transition and not discussed much in the press. Almost a non-event! The problem is with highly distressed companies, where the CEO has left or most often been let go with some Hollywood-like drama, and like the next episode of Dancing With The Stars, the anticipation (and press) for the new CEO gets overblown. Ah, will the celeb fall down, or screw up… and millions gladly tune in every night!
The fact is that a distressed company needs time to formulate and execute a vision, rebuild the enthusiasm and internal morale and establish a solid presence. This is not solely done by bringing in a new CEO. If you are ill, it doesn’t matter how you dress, the illness is paralyzing and soon enough reality will surface! Examples are plenty but I would like to two recent cases.
First, Hewlett Packard. In a span of 12 months, HP went through the drama of ousting one CEO, bringing on and firing a second CEO. Then transitioning a board member to be CEO. HP is an example of a superbly competent company, a legend, in fact. But before this 12 months of repeated overhauls, the company was still adjusting to integrating major acquisitions and building its identity and an integrated company. That takes time. Each major CEO transition completely changes teams, execs, vision and priorities. Imagine that happening three times in twelve months! These are the nasty details that we on the outside world don’t hear about. Sure, HP still sells tons of products but let’s respect the fact that the new leader has to have time to build the company up, AND, just because there is a new CEO, doesn’t mean the employees just adapt immediately. They have to be convinced, inspired, elated to be part of the new CEO’s drive and vision.
Second example, Yahoo. In what will go down as one of the more unprofessional exchanges between an ousted CEO and the board, and much to my dismay, another top female CEO bit the dust. Yahoo was a huge player and for the last several years has struggled to establish its path. What is Yahoo great at and how can it diversify? And now they also had the void of waiting for a new CEO. In came the new CEO this month and with it, unrealistic expectations that magic will happen. First, Yahoo as a company will need to work on developing its identity, strategy and inspire its staff. In parallel, the Co-Founder leaves at exactly the same time! That can’t be good, right?
Yes, if a company is extremely well run with a strong vision, market strategy and acceptance, a new person can assume the CEO position and rock and roll. An example is Steve Job’s selection of Tim Cook as CEO of Apple. But let’s face it, Apple’s identity is so strong right now, the culture so innovative, that the new CEO’s job is to continue to drive it forward, not establish a new vision or work as hard to get buy-in internally or externally.
What do you think? For now, I will say that I don’t think a new CEO is the golden solution. There are many cases we can analyze together.
Would love to hear your thoughts!