The Seven Surprises for New CEOs were described for the first time in the HBR of October 2004 in an article regarding CEO Leadership by Michael Porter, Jay Lorsch and Nitin Nohria.
As a newly appointed CEO, one may think to finally have the power to set strategy. To make things happen that comes with the privilege of having a full access to the finer points of your business. But if you expect that this job is so simple, you’d better wake up now. You bear full responsibility for your company’s well-being. But you are a few steps away from many important business factors. You have more power than anybody in the corporation, but you need to use it with extreme caution. You need to facilitate, motivate, give praise, decisive and able to provide a common sense of purpose and an environment where champions can live and be appreciated.
You can’t run the company. The sheer volume and intensity of external demands take many by surprise. You need to be able to work not only with the formal lines and boundaries but also the complex adaptive nature of a living organization.
Giving orders is very costly. No proposal should reach the CEO for final approval, unless he can ratify it with enthusiasm. Before then, everyone working on the matter should have raised and resolved any potential deal breakers. The CEO should be brought into the discussion only at strategically significant moments to give feedback and support.
It is hard to know what is really going on. Certainly, CEOs are flooded with information, but reliable information is surprisingly scarce. All information coming to the top of the enterprise is filtered, sometimes with good intentions, or may be approached heuristically to simplify digestion.
You are always sending a message. The words and actions of a CEO, however small or said casually, are instantly spread and amplified, scrutinized, interpreted and sometimes drastically misinterpreted. Compare: Charismatic Leadership
You are not the boss. Although the CEO may sit on the top of the management hierarchy, his position carries the responsibility of making sure that harmony and loyalty will not rule over creative dissent and constructive conflicts to ensure the longevity of the organization.
Pleasing shareholders should not be the only goal. CEOs must recognize that, ultimately, it is only long-term value creation that is important.
These Seven Surprises for new CEOs carry some important lessons:
First, as a new CEO you must learn to manage organizational context rather than focus on daily operations.
Second, you must recognize that your position does not confer the right to lead, nor your position guarantees the loyalty of the organization.