The 4 essential ingredients for “new CEO” success

Some experiences in life simply can’t be prepared for. You can imagine how you might feel and what you might do, but you can never actually know how you will respond in a situation until it happens. Falling in love, becoming a parent, and facing one’s mortality all fit into this category. In the workplace, your first interview, first day on the job, and the first time you’re given the responsibility of managing others fall into this category. For a select few who successfully climb the corporate ladder, becoming CEO also lands there. Oliver Bäte, CEO of European financial services company Allianz, puts it starkly: “You don’t really know what happens on the job until the day you have it.” 

What makes the top job so different from the leadership roles that come before it? To start with, new CEOs discover quickly that they’re accountable for everything. Adobe’s [Shantanu] Narayen explains how accountability shifts the moment you start the job: “The day you’re announced CEO, your role changes drastically. Before, you had peers, and now they’re looking at you to make the call.” Second, the job is more isolating than most imagine. Gail Boudreaux, the CEO of Elevance Health, shares, “I don’t think the loneliness of leading is overstated. As a division leader, CFO, or someone running a big part of the company, you’re part of the team. Of course, you’re still part of the team as CEO, but you’re the coach, and the coach has a different relationship with the players than the players have with each other.” Another unique aspect of the role is that after years of reporting to one boss, you’ll now have ten or more in the form of the board — each of whom works part time. 

For these reasons and many others, no one should assume that they have it all figured out when transitioning into the role of CEO. In fact, one-third to one-half of new CEOs are considered to be failing within eighteen months of taking the role, and more than ninety percent of those CEOs confess that they wish that they’d managed their transition differently. Those who get it right realize early on that they will need to lead differently than they did on the way to the top. They know that their success will depend on whether they can reinvent themselves by rewiring the many work habits they built up over decades (on average, new CEOs have worked for twenty-four years before taking the role). “CEO’s peter out because they think they’ve arrived when they get the job instead of seeing it as a new beginning and a chance to regenerate themselves,” observes HCA Healthcare’s [Sam] Hazen.

Savvy CEOs recognize that the renewal opportunity isn’t just for them but for the entire organization. A transition of leadership creates what German American psychologist Kurt Lewin refers to as an “unfreezing” moment for the institution. According to Lewin’s theory, organizations exist in an equilibrium state largely constrained (“frozen”) by resistance to change and group conformity. Movement becomes possible only when there is a jolt to the system (an “unfreezing”). Such jolts often come in the form of a crisis, whether company-specific (e.g., a safety or ethical conduct issue, hostile takeover attempt, or cyber-breach) or external-event driven (e.g., a pandemic, natural disaster, international conflict). A CEO transition creates a similar opportunity — without the crisis — to reset an organization’s aspirations and ways of working. 

The best CEOs don’t miss the opportunity to make their first six to twelve months (not just the vaunted 100 days) both a personal transition of great import and a profound moment of institutional renewal. As PepsiCo’s [Ramon] Laguarta puts it, “Everybody’s ready for change. Everybody’s expecting change. They would be disappointed if you didn’t.” While each leader will act in ways befitting their unique situation, there are at least four common ingredients for success: 

1. Not making it about you 
2. Listening, then acting 
3. Nailing your firsts 
4. Playing “big ball” 

In his 1979 book Transitions: Making Sense of Life’s Changes, consultant William Bridges wrote about the difference between transition and change. According to Bridges, change is something that happens to people. Transition, on the other hand, is internal: It’s what happens in people’s minds as they go through change. Change can happen very quickly, while transition usually occurs more slowly. The distinction is subtle but vital to understand for a new CEO who is pursuing both personal and institutional renewal. 

The day you become CEO, all the attention becomes laser-focused on you, often in ways that distort reality. Says Allianz’s Bäte, “People change their face when you become CEO. Everybody gives you partial information. All of a sudden, you have a lot more friends. You have much funnier jokes. Your ties are much more beautiful than they were the day before.” This magnifies the sense of your own power. Nasdaq’s [Adena] Friedman adds, “Once you become CEO, the relationship with the team changes, and what used to be a suggestion or idea is suddenly taken as a ‘command,’ which was certainly not the intention.” 

Etsy’s [Josh] Silverman shares an example of the power of the CEO chair from his time leading his former company, the invitation website Evite. “One day, rumors went rampant across Evite that we were selling the company. I asked my executive assistant why everyone suddenly thought that, and she said it was because I had changed the position of my desk. It used to be that everyone could see my screen when they walked out the door, and then I changed it 180 degrees so no one could see my screen. They assumed I had something to hide, and if I had something to hide, it must mean we’re selling the company.” 

All this attention and power can quickly create a celebrity CEO phenomenon where the transition becomes all about you. Dr. Robert Grossman, [former] CEO of the [health] system NYU Langone Health, observes, “I see a lot of CEOs who are very much about themselves. They have a lot of ego, and some arrogance… and they view the job as a destination, not a journey.” By contrast, successful CEOs don’t let power go to their heads — they keep their minds focused on the institution. “I think when you’re a CEO, you’re the concierge,” Dr. Grossman continues, “and you’re responsible for the care and feeding of your institution.” 

Former CEO of Merck Ken Frazier shares his leadership approach: “I thought it was important to be humble. My dad was a janitor, and he was ten feet tall in my eyes. I understood that when people came into my office, they were speaking to the CEO — they weren’t speaking to Ken Frazier. I also knew that when I was in that chair, my job was to serve my employees and patients; it wasn’t about me. People respect the chair, and when you are in that position, you need to do what you can to leave the place in better shape than you found it.”