Hitting the Ground Running as the New CEO
by Harry K. and Tom FitzGerald

Harry

In just two days it took two years off my learning curve. In just two days more it had allowed my new management team to imprint, really imprint, on me as their leader. And, in a way I would never have dreamed possible, it had allowed me to commit to them as the managers I wanted and would create the future with.

"I" was the new, the brand new, managing officer of a 1500 person company. "They" were my new team. Ten senior managers with an average tenure of twenty years with the company.

I had had no say over who "they" would be; I had inherited them; they had no say over my arrival either; I had been appointed. Some of them, I'd heard, had applied for the position too.

"It" was a program of corporate renewal/revitalization that by chance had begun the day I was appointed.

Before I go further, let me tell you a little about me:

I have been in business for 20 years, across many elements of the business from design to production, to supply chain, to distribution as engineer, supervisor, manager, and now CEO.

By formal education I am an engineer with an MBA.

I had worked in many other challenging positions, but not one as challenging as this, and never before with so many people reporting to me, depending on me.

From my point of view the program began with an email from my chairman announcing the survey. It informed me, and all the managers and supervisors in my new organization, that "to help with the planning process" (that sounded innocuous enough) we should go to a certain web address and respond to the survey to be found there; that we should do it within the week. I was given a password specific to the group I was answering with - in my case the senior team. Each of my managers and supervisors was also given a password appropriate to the group they were part of.

The survey was large. But with the questions phrased as statements and buttons to click on by way of response, it took me only about 35 minutes to complete. But I was left with a feeling that a number of the areas covered were unusual: I had filled out many surveys in my time, but there were many issues addressed here that I had not seen before. And I began to wonder what the answers of my new subordinates would show. And the answers of their subordinates, too. And what might the responses to the item "Our need for consensus gets in the way of needed decisions" imply about us?

There were a couple of weeks to wait. Then my boss called me and said, "Can you come and look at this?" I was about to get a private heads-up on the findings.

I knew there were a lot of challenges before I accepted the job. I had looked at some of the metrics of their performance and saw the signs. I also heard what it was like there from others I had worked with over the years, what some of the issues were, largely related to people, process and performance. I had been asked a number of times if I knew what I was getting into. I thought I did.

Now with the results so simply displayed, I saw the depth and pervasiveness of our problems. My chairman was saddened too, and he is an optimist. Why the Consensus question was included was now clear. And the questions on Decision Making and Risk Taking and Acknowledgement of Performance and even the one on Tolerance of Incompetence.

There were problems. There were indeed.

As my chairman and I looked at the results, we realized that we were looking into areas far beyond the usual financials and beyond the operating metrics and warning signs, into the root causes of performance, into the very drivers of behaviors that were generating the performance - into the very operating dynamic of the company.

There must have been a hundred questions, a hundred sets of responses, that showed an unhealthy workplace, where problems existed within and across groups. Problems which appeared to have festered a long time in the soul of the organization. Problems, that if left unaddressed head on, would continue to linger and plague future results as they had the past.

At the time I felt overwhelmed by the results: there were too many problems, too many areas out of balance, too many things to be fixed in the soul of the company. Because that is what we were talking about, fixing the soul of the company.

But as we talked to the consultants who had designed the survey, it became clear that the results, the insights, the opinions of the respondents, like beams of light, were focusing on a few key issues, from different perspectives, from different levels of the organization.

And that these issues were really caused by that single corporate frailty all heavily regulated utilities are prone to: creeping bureaucracy. Except, in our case, it had long since stopped creeping and now had us in a stranglehold.

Tom

We did not design our program just for Harry. We did not design it to bring new CEOs instantly up to speed either. Though that is what it does and that is now a significant part of what we do.

The program was initially designed to turnaround troubled companies - preferably before the full financial crisis hit. At the time we called it Preemptive Turnaround. It worked, like a charm - on the bottom line where it could be measured.

We soon found ourselves using it further and further upstream of financial crises until the terms Turnaround, or Preemptive Turnaround no longer applied and Corporate Renewal or Profit Improvement were the better terms. Its impact on the bottom line was even greater.

The closer a declining company is to a financial crisis, the more technically difficult is the solution; the EXTERNAL players, like bankers, vendors, customers, investors, are not very willing to cooperate. If they do cooperate a heavy price will be extracted.

By the same token however, the closer the crisis is the more willing the INTERNAL players are to do what is needed.

The further a declining company is from a financial crisis the easier it is, technically, to fix its problems. Banks, creditors, investors, will all cooperate.

But the further the company is, or appears to be, from financial crisis the more difficult it is for the internal players to actually do anything about it. Management knows just what to do or can easily find out, but all too often an apathy, a paralysis, a corporate trance has taken hold.

This is the paradox of corporate renewal. It is also the greatest frustration of managers who want to make serious change.

What our process does is shatter the corporate trance. We designed it specifically for that. It causes a crisis, actually a virtual crisis, within the company. But unlike a real crisis, which destroys morale and productivity at every level, this virtual crisis is focused on and confined to the managers and supervisors who must break the pattern of decline and change the trajectory of performance.

This virtual crisis is without danger. The company cannot be hurt by it. But it is not without intensity and it causes all the soul searching and honesty a real crisis does. It has all the focusing power of a real crisis in which people can lose their livelihoods and reputations.

A business turnaround that is driven by a real financial crisis has just three major elements:

  1. Catharsis
    In which management experiences an emotional revulsion with the way things are, the way the company performs, and the way its management and its people behave. This generates a huge amount of energy though most of it plays out destructively throughout the organization among people who have no power to initiate change.

  2. Cathexis
    In which management (often a new management) invests, commits viscerally, the energy released by catharsis into a new vision, a new way of doing business, a new way of relating to each other and the marketplace. A new operating dynamic.

  3. Action! Action!! Action!!!
    Immediate, sustained, and followed up.

Our process does this.

What is different is that we generate the motivation to change without the danger. We also work with existing management.

The creation of the motivation, the drive to change, is our first task.

To do this we use the knowledge, perspective, insight and honesty of the managers, the supervisors, the very people most stuck, most enthralled, most frustrated by the corporate trance. The very people who must initiate and lead the change.

To elicit this motivation we use a questionnaire - the Corporate 360.

This survey primarily addresses the Drivers of Performance. These are the factors that underlie and impel the behaviors of the company. There are about a hundred of these factors. (The best known of these is perhaps MORALE. But in fact it is not one of the more significant drivers. It is much more a symptom.)

Together these drivers provide an in-depth, comprehensive profile of the operating dynamic of the company. This is what we use to drive the renewal of our client companies.

If we had not seen results like these before, we might have despaired. Certainly they were depressing. The issues were pervasive, through all levels of the organization. We were looking at systemic problems, not localized troubles. In fact, if it were possible for a company to be clinically depressed this one would be.

But we had seen it before. It was a pattern we had found in other heavily regulated companies. Fortunately it had within it the seeds of its own correction.

For Harry's organization there were about a dozen core issues, of which the top three were:

  • Corporate Decisiveness,
  • Acknowledgement of Performance, and
  • Leadership.

We knew from experience that when these and the other key issues change, the company changes.

But something else had to happen first: Harry had to become the leader of his organization, not just the manager, not just on paper, but also in the eyes of his managers and their subordinates. He did not have much time. Without strong, accepted leadership at his level there could be no change.

Harry

The responses were depressing, but here and there in the questions and in the answers I began to see the first faint glimmers of hope. I felt that as I shared the responses with all my managers and supervisors things would change.

But then I knew that just sharing results would not be enough; a number of things would have to happen before knowing what we were would change the company into what we could be, should be.

First I would need to become, in full reality, the leader of my new organization.

Then the rest could happen. Then each member of my team and each member of their teams would be able to confront - and, I hoped, accept - what the organization was, openly, honestly, without flinching away. And feel the shame, the anger that would bring - because shame and anger should be felt at what I was looking at.

Then they would have to invest their emotional commitment into becoming something else. What that something else should be was already obvious.

Then they would have to take action, do it. I would, too, but their actions were going to be needed much more.

Getting to Know Them

From my experience I had known just how long it takes to get your hands around a new organization. It is not the strategies, tactics or domain knowledge, however new, that are the challenge. It is the people. The management people, the supervisory people. The ones who make things work out there on the line.

Getting to know them always takes time. The more managers, the more supervisors, the more teams there are, the longer it takes. Getting their acceptance, of course, is something else. And getting them to imprint on the new leader, actually joining the team, something else still. I had heard too many stories of leaders who had found out too late what exactly they had inherited, or had taken too long to really take charge, or who had not obtained the loyalties of their teams.

I had been told we had little time. I had said I'd take the job. And there was still the catharsis, and the cathexis, and the action steps still to be taken.

But it turned out that they could happen together; it was to be part of the program we had contracted for. The diagnostic was just the first step.

The Process

The process has just two phases: 1) The diagnostic and 2) the Renewal sessions (In my case these were also the means of my investiture and assumption of leadership.)

The diagnostic was done, now it was time for the sessions.

It began with me and my new senior team meeting off-site. My chairman opened the session and then left us to the tender mercies of the consultants.

We found ourselves sitting in an open arc of chairs, no tables to hide behind, looking at two large screens on which our answers and our subordinate's answers appeared.

But these answers appeared in a format very different from any survey results we had ever seen: there were no summaries, no charts, no scattergrams or averages or medians. Just our responses: 1, 2, 3, 4, or 5. We could see them all, and each of us privately knew where our own answers lay, and could compare them to our peers and to our subordinates.

The process of dealing with the answers was different too - as was the style. And that defies description. One has to experience it - because it was designed to trigger not just analysis and thought, but feelings, real feelings, revulsion where that was proper. And above all, commitments. Always commitments from the heart and the belly. And always turned into actions.

The questioning began. At first it was the consultants asking, but very soon we all caught the simplicity of them and asked them of ourselves and each other:

  • What is the real answer here? (No, never mind the average, what's the REAL answer?)

  • How do you feel about that? Really FEEL?

  • What should it be? What will you COMMIT to making it?

  • What is the action? Who will do it? When?

  • Who will check to see it's done? To see it had the results we need?

  • Who will defend and support the doers? That was often to be me. Defending the drivers of change is the role of leaders.

Then little by little, hidden in the questions and the answers and the laughter - there was a lot of that - the feelings of the people about the company began to shift. Their attitudes towards each other shifted. Their relationships with each other changed. Their relationships with me changed. They became a team. And I found myself, without ever having thought about it, committed to them as my team, my people.

Commitment after commitment, action after action, was recorded before our eyes. We had created an action plan to change our organization. Each of us had tens of actions to be taken, and we knew we would deliver.

Then the session was nearly over. It had taken two days. And we were very tired.

My chairman dropped in to see what we had wrought and watched my people pledge to me - and challenge me to support them. He watched me pledge to them. And then pledge to him the many, many actions I had committed to - by then I had more than forty and the list would grow thereafter.

Then he pledged to them and me, taking specific action steps for himself. And my people listened to what he said, and more importantly how he said it. Gauging clearly his commitment.

I went through the process fourteen times over the next couple of months - once with each of my direct reports and their teams, the supervisors. More insights, more relationships, more commitments to each other and more action items. In those two months, I saved years of slowly trying to understand the organization, the people and the issues. It was a leap start, which would move us forward very rapidly. Then we began to work, to implement our plans, to change our company.

Tom

Even after twenty years of doing what we do, it is still difficult to describe it to those who have not experienced it. Certainly the techniques we use, the questions we ask, the things we record are all simple enough. We have made them public. But the techniques alone do not account for the changes we see. They do not solely account for the results our clients achieve. A transformation takes place within the spirit of the company that allows its managers to transcend themselves.

For the changes seen here, these results are not ours. They are way beyond anything we might have contemplated. They are uniquely those of the company and the people who generate them: the responses to the questions are theirs; the analyses are theirs; the reactions (and sometimes the revulsions) are theirs; the commitment to change is theirs; the ideas are theirs; the plans are theirs; the actions are theirs; the achievements are theirs.

All we do is act as catalysts.

From time to time we issue follow up questionnaires so that the people and the company can see what progress is being made (long before the financials show) and tie the changes in the drivers of performance back to the changes in financial performance.

Harry

Follow up after follow up, I watched the attributes of our organization change: first from apathy to purpose, then from uncertainty to decisiveness; and then from "management by exception" to generous acknowledgment, praise and guidance and, where needed, correction.

Time after time, I saw evidence the vision I had for the future become internalized, clearer and more certain, picked up in the hearts of our managers and supervisors.

And month after month, quarter after quarter the financials showed that progress too, and I knew why.

But also in that time I saw the occasional slippage here, back sliding there. Through the follow up surveys I knew why and what to do about it. Much more importantly, my managers new why, and what to do - and did it. And managers who might just not have made it in other circumstances, become high performers.

Since then, another challenge has been presented, another organization given to me. And once again they did not much like it, my new team. And once again the questionnaire goes out. And once again the results come in and show just how bad, and good, things are. And what must be done by me and my new team to fix it.


About the Authors

Harry K. is a real person. Because of his company's publication policies, he wishes to remain anonymous.

Tom FitzGerald is President & CEO of FitzGerald Associates (www.ManagementConsultants.com) headquartered in Lake Forest, IL. FitzGerald Associates specialize in profit/performance improvement, corporate renewal and preemptive and early decline turnaround. They have worked in this arena since 1976. Tom can be contacted at Fitz@ManagementConsultants.com or 847-599-9960.

Many more articles on Leading Change in The CEO Refresher Archives

   


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