All the focus this week on President Obama marking his first 100 days in office should call to attention that this period of time is crucial in the life of every new CEO.
I went back into the Directors & Boards archives to dig out "The CEO's First 100 Days," an article I published in 2002 by two longtime and respected CEO recruiters, Dennis Carey and Dayton Ogden. Their prime thesis: If a new CEO is to succeed, the most important thing he or she can do is to move quickly to put their own team in place.
"Personnel is policy, goes a favorite Washington saying," the authors write. "It is no less true in the private sector. Indeed, the reason so many companies falter after a new leader takes charge is usually due neither to flawed management nor leadership style but rather the inability or failure of a CEO to assemble his own senior team that can enthusiastically implement a new strategic direction."
Here are two specific tactics they offer:
• Look Right Away for the Stars: "New CEOs ought to spend less time on grand planning and more time on determining whether top managers fit their vision. With this knowledge, the CEO can weed out the disloyal, push aside the deadwood, and pass over ineffective veteran managers to elevate star players several rungs below," Carey and Ogden write. The board should encourage the new CEO to conduct what the authors call an "independent human capital audit" to better learn about the talent he has and facilitate the selection of a new team.
• Do a Board Reassessment: "The fact that a new CEO inherits a board someone else appointed doesn't make change any easier," the authors acknowledge. They recommend that a leadership change is a good time for the board to do its own internal assessment — a process that would "encourage some of their members to step down and make room for new blood." This is a "delicate matter," they recognize, but nonetheless the board, with the best interests of the corporation in mind, ought to create an opportunity for the new CEO "to select some of his most trusted advisers as directors."
"The 'first hundred days' is a yardstick usually reserved for a new President in the White House," Carey and Ogden observed in their article seven years ago. "But it is exactly the type of timetable more CEOs need to follow."
