Youri was a very successful CEO of a multinational logistics company. He grew the top and bottom-line 5 times during his tenure, his team was extremely committed and loyal to him and he and was regarded as one of the best CEO’s in the history of the company. Then after 7 years he decided that there was little growth in the organisation, the organisation needed a new leader and decided to accept a huge challenge. He was appointed as the CEO of an industrial group that needed to be transformed from a process and compliance driven organisation to an entrepreneurial growth driven one. On paper, the new CEO was the right candidate, with the right skills, mindset and relations with the shareholders.
A few months in and the new CEO was struggling. He was unable to get his leadership team members on board. For most of the senior managers, the cultural transformation from a compliance focused multinational to a growth oriented entrepreneurial organisation was too much of a shift. The new CEO clearly had underestimated the culture which he had landed in and all his ‘old tricks’ of engaging the team did not work. He had clearly run into what Marcus Buckingham famously coined ‘what got you here won’t get you there’.
After running into a couple of big walls, the CEO was clever enough to understand the situation and his own role in it. He made some changes, compromised, adapted his style a bit and brought the majority of the senior team on-board. The ones that felt that the changes were too big had also by that time jumped ship and left the organisation.
A mismatch of either culture, structure or systems is one of the most obvious reasons why potentially successful leaders fail in a new role. The best way to avoid this trap is two-pronged:
- Do your due diligence prior to accepting a new role. Speak to as many people as possible to understand the challenges you can expect.
- Prepare – make sure you are honest about your own strengths and where you need help with (an Executive Coach could be a great support system in the first 6 months of a new leadership challenges).
Though these are the best way to avoid failing as a new CEO, and there are a number of mistakes you can avoid as a CEO, I have found 5 reasons that usually cause new CEO’s to fail.
1. Move as a Pack of Wolves
In some industries, especially the financial service industry, it’s customary to move in ‘wolf packs’. The leader of a team accepts a new role – most of the time with a competitor – and within a couple of months he brings over all the people that he worked with in the past. Of course it’s important for the leader to have confidence in his team and to be able to establish himself quickly. But in my view the down-side of moving in old buddies into your new organization outweigh the benefits.
Group thinking often develops where team members only view problems from the same point of view which may or may not be right. Loyalty of “new” and “old” team members can become divided and a culture of favoritism may be perceived even if it’s not the case. Bringing in your old team is a tricky move and can simply lead to failure.
2. Be Driven by Ego and Power
Having had the pleasure to live for many years in countries which have been ruled by ‘benevolent dictators’ I have also seen the impact of such power. Whereas in the beginning ‘benevolent dictators’ have been seen as liberators, (think President Sisi in Egypt or even a democratically elected leader like Erdogan in Turkey) after some time the pleasure of power corrupts. Instead of being the transformers they started out as, leaders become more obsessed with holding on to their seat.
Business isn’t that different. Having worked for so long to finally arrive and having tasted the power and status that comes with an (executive) leadership position, many leaders are more inclined to ‘hold on’ to what they have, rather then being able to adapt, transform with the time and let go. They fall into old traps and aren’t able to adapt to present times leading themselves and their teams away from the path to success.
3. Fear Competition from Followers
Another nail in the downfall of a leader is often the fear that one of his team members are out to take their seat. As a result, the leader will spend most of his time
- Looking over his shoulder,
- Downplaying the achievements of his team members, and
- Not developing that team member.
The leader achieves his short term goal: that his most talented follower won’t be able to take his job. But of course as a consequence the team will never shine and over-perform, limiting the promotional opportunities of the leader and of course harming the company as a whole.
4. Stop Taking Time Out to Learn
The problem with residing at the top is that it’s very lonely and as a result you don’t have an obvious (in-company) network of people that challenge you. This causes limitations to where you can learn from. It becomes more and more difficult to take time out to learn new skills because the pressures to deliver constantly increase. Your priorities shift and as a result, taking time out to read, observe, learn, experiment and network decrease. If Mark Zuckerberg can commit to reading a new book every two weeks I’m sure you can find the time as well.
5. Always Believe They’re Right
Leader’s who are successful often fall for a common illusion: the one which causes them continuously add credits to their “I’m always right” bank account. Of course this leads to inflexibility and becoming dogmatic. A contributing factor is the reverence that the boss receives in some societies where ’the-boss-is-always-right’ culture persists. In these cultures people consider it disrespectful to speak up against their leader, and so they don’t..even if they should.
In such scenarios you really have to work on creating an environment where people feel safe to speak up and disagree. The moment you enter the ‘you-are-right-sir’ phase you know you have to be careful since people won’t tell you things. You might end up overlooking obvious problems and/or alternative solutions.
If you’re part of a culture where old traditions still take hold, you’re more likely to come across traps for executive failure. This is because there’s such disparity between the “old” way of doing things and new age leadership concepts. There’s much to be said about both types of leadership so take the best practices from each one and create a leadership style where you respect your surroundings and those who you work with. That’s the single best way to find success. If you’d like to continue to educate yourself, join the Keijzer community and I’ll email you more lessons learned from some of the most successful leaders in the world.