The position of CEO comes with high expectations. Irrespective of their past credentials, any CEO new to a business is under pressure to hit the ground running. They carry the responsibility to deliver break-through results, above and beyond any of their predecessors.
This means that the first 90 days of their tenure is critical. Yet with the unknowns of a new role, the pressure to perform, and the need to be accepted as a new leader by an established team, it can be difficult to know where to start.
The fact is that most new CEOs are appointed to bring a new perspective and fresh ideas. They are there to look from the outside in, and to connect the dots of the whole enterprise, sharper and faster than anyone on the inside.
There’s an old saying, “You can’t read the label when you’re sitting inside the jar” and this is precisely where new CEOs come in. The first 90 days should be dedicated to scanning the business as a whole and identifying the leverage points that can break vicious cycles that are preventing optimal results.
So how can this be achieved in practice? Having worked with dozens of CEOs in different industries, from IT, higher education and healthcare to real estate, construction and more, we’ve put together a ‘Cheat Sheet’ that lays down a clear set of actions – the dos and don’ts during the first three months.
Identify where the customers’ voice is first heard and listen to it
Whether it’s customer services, sales, or the quality department it’s important to start by spending 2 full days listening to customer calls, reading their emails and observing sales meetings. This should be done in collaboration with the department head so that they are part of the process and see the new CEO’s interest in creating end-to-end value.
Understand how customer promises are delivered
Spend another 2 days exploring what information and criteria are used to deliver customers promises. Does the team evaluate delivery capacity, it’s constraints and bottlenecks? Or do they set expectations blindly because departments work in silos and don’t have full end-to-end information in real time?
Establish the current customer experience metrics from end-to-end
Spend a week gathering data to understand how many customers are waiting for the company to deliver their promises and how much money is outstanding from unpaid, overdue invoices (for example, late remittances of 5 days, 15 days, 30-60 days).
Involve managers in identifying system flaws
Invite the leadership team to spend 3-4 days together in those same settings. Listen to customer calls, read customer messages and together study the promise giving moments and the fulfillment milestones. This will create the collective knowledge and urgency to change old managerial habits that may have been obstructing optimal performance.
Stay out of sight
Sitting in an office asking department chairs to deliver data won’t help you understand the detailed systems and processes behind it. It will only leave more questions unanswered and time wasted.
Don’t ask your leadership team to simply report to you. Go out and study the system for yourself end-to-end.
Don’t overestimate the understanding of the leadership team. If they are only concentrating on delivering in their own area, they are unlikely to know how the enterprise works as a system from end-to-end.
Collaborate and communicate with managers
Gather the leadership team for 5-7 days. Split these days over the period of a month.
Identify milestones that the whole organization can monitor
Monitor daily milestones across the end-to-end process so the entire organization can understand where the challenges and bottlenecks lie. This helps to improve performance throughout the whole process, rather than individual functional areas.
Implement daily end-to-end performance planning and accountability
Conduct a daily 15-30 min (virtual or physical) stand-up team meeting around a visual display of the end-to-end business process. The visual representation allows managers to see how performance is built upon the interdependencies between functions, rather than a top-down management approach. This insight brings a radical change; for the first time, leaders understand the need to work horizontally across the business rather than protecting their own vertical functions.
Focus on lagging KPIs
Traditional KPIs can’t help to foresee and navigate daily business risks. Don’t ask the leadership team to focus on efficiency; they will only work on their own area and create more waste in the form of queuing orders, lower overall throughput etc.
Rely on organizational structure
The traditional business org chart should be discarded as it does not reflect the interdependencies needed to function effectively and deliver value to the customer
Build the accountability from the shop floor
Reporting responsibilities should reflect the fact that success is achieved horizontally across an organization. Leaders must be accountable for ensuring the interconnectedness across functions.
Take time to ‘zoom out’
After zooming in on the business process with daily end-to-end planning, it’s time to ‘zoom out’ and identify the weaknesses in the system. Work with the leadership team to pinpoint one fault or bottleneck that is creating a vicious cycle and preventing optimal performance. Expect to spend 6-9 days in total to define the challenge and create a strategy around it.
Acknowledge flaws in current systems
99% of the time, the vicious cycle is rooted in the current strategy, KPIs or process rules. For example, a call center has the KPI to respond to customers within 2 minutes; a sales team’s KPI is to focus on new and lucrative customers; while the production team KPI is to shorten lead times. Everybody is busy and doing their best separately, but mediocre results are being delivered – all because the KPIs of the different departments are disconnected from the end-to-end process.
Dismantle failing and outdated approaches
Work with the leadership team to identify the cause of the vicious cycle and create a strategic plan to break through it horizontally. The plan should have a maximum of 1-2 strategic objectives annually, 3-5 cross-functional initiatives quarterly, with a clear owner and team. That team needs to meet 3-4 hours weekly to work hands-on to execute the plan. Establish monthly routines to review the strategic initiatives based on a recognized process or system improvement strategy, such as PDSA (PLAN-DO-STUDY-ACT) or the AGILE lifecycle.
Dive in blindly
Often a Founder or Board will develop a strategy without understanding the enterprise as a whole. A new CEO must take the time to get to know the organization, identify the vicious cycles and create a strategy that addresses them.
Take the vertical approach
New plans and strategies need to be developed and deployed horizontally to improve organizational performance.
Expect instant effects
Don’t presume that the leadership team knows what it take to execute a strategy. Long term-commitment and discipline is vital.
Through this 90-day process, a new CEO will develop a thorough understanding of their organization, it’s customers, its functional interdependencies, and develop a strategic plan to shift from mediocre performance to achieve end-to-end business excellence.