First Year as CEO

Win-win solutions are more common than many assume.

Engaging a board demands more time than many new CEOs expect.

A public company CEO's first year is more indicative of long-term success than their first 100 days.

For new CEOs of private equity–backed companies, creating value fast means identifying what's slowing down their organizations.

It doesn't have to be lonely at the top.

Audio: Something Better Than a Work-Life Balance

Overview

Insights for New and Aspiring CEOs

Excel in Your First Year as CEO is a compilation of perspectives from current and former CEOs—members, advisors, and friends of World 50 Group—designed to shorten the learning curve of today’s newest CEOs and to spark inspiration for executives aspiring to the role.

Win-win solutions are more common than many assume.

Engaging a board demands more time than many new CEOs expect.

A public company CEO's first year is more indicative of long-term success than their first 100 days.

For new CEOs of private equity–backed companies, creating value fast means identifying what's slowing down their organizations.

It doesn't have to be lonely at the top.

Audio: Something Better Than a Work-Life Balance NEW

“You are asked to occupy that office because of who you are, not who you aspire to be.”
– Ben Verwaayen, Former CEO, BT Group and Alcatel-Lucent

Today’s best CEOs strive to be insightful, not brilliant.

While the role of CEO is a human job with a superhuman responsibility, new CEOs often discredit their impressive track records, which can undermine their ability to make complex decisions.

“People find themselves in a corner office, and they think, ‘Oh my goodness, I need to be different,’” said Ben Verwaayen, former CEO of British telecommunications giant BT Group and former telecommunications company Alcatel-Lucent. “You are asked to occupy that office because of who you are, not who you aspire to be. It’s not about you being brilliant. It’s about what your team can deliver.”

Feike Sijbesma, former CEO of the Dutch science-based nutrition and health company DSM, attributed his success to finding “the symbiosis of insecurity and determination, as well as … searching for the right solutions—but with guts.”

According to Sijbesma, insight is the most important leadership qualification. Unearthed by listening, observing, and reading—and much less by teaching or presenting—insights spark opportunities for innovation and highlight company culture issues.

Your Year One Journal: Email firstyear@world50.com to join our first-year journaling cohort and receive prompts to log your observations about your first year as CEO.

New Stakeholders

Win-win solutions are more common than many assume.

CEOs face no shortage of constituents. Managing their interests—which often seem at odds with one another—can feel like a losing battle for those who are new to the role.

But in a Venn diagram of what’s important to employees, customers, and shareholders, “there are points of intersection where everybody wins—and that’s where CEOs need to spend most of their energy,” said Bob Eckert, former chairman and CEO of U.S.-based toy manufacturer Mattel. “The needs of everyone can indeed be met.”

The playing field has to be level, though. “One challenge as a new CEO is not to favor the function you came from or the old division you may have run,” said Greg Creed, former CEO of multinational fast food corporation Yum! Brands. New CEOs who learn the parts of the business in which they have less experience signal to employees that their past function won’t receive unfair advantages.

Many conflicts can be mitigated when a CEO explains the company’s top priorities in a way that makes them relevant to every level of the organization. “It’s not simply enough to have a number that excites the street,” said Ben Verwaayen, former CEO of French telecommunications company Alcatel-Lucent and U.K.-based BT Group, one of the world’s largest providers of communications services. “You need to have something that people on the front line of the organization can relate to. If you’re lucky, you can have a subject that people really get passionate about. Passion will bring new ideas, new concepts, and new opportunities.”

“There are points of intersection where everybody wins, and that’s where CEOs need to spend most of their energy.” – Bob Eckert, Lead Independent Director, Amgen; Former Chairman and CEO, Mattel

According to Mads Nipper, CEO of Danish renewable energy company Ørsted, many competing interests aren’t actually at odds with one another. “Balancing the views and needs of different stakeholders actually starts by removing the perceived contradictions that aren’t really there,” he said. In many cases, stakeholder groups have similar interests—but varying opinions on which priorities should be short term and which should be long term. “Just take the example of climate change,” said Nipper. “Taking action now is a lot better for the business than it is to mitigate or adapt to climate change in five or 10 years’ time. As a CEO, you are obliged to help create an understanding that every business needs—to an increasing extent—to take a longer-term perspective on their business.”

Starting Points for Smoother Collaborations

Is the problem at hand worthy of being solved? Before finalizing solutions at claims management provider Crawford & Company, President and CEO Rohit Verma ensured all stakeholders agreed there was a problem to be fixed. If there’s doubt among the team about the necessity of a change, solutions will inevitably fall short.

Each member of a CEO’s leadership team must pull their weight. It’s the CEO’s job to draw valuable insights from each person on their executive teams, regardless of their personality type, said Sara Greenstein, president and CEO of American private investment firm Axel Johnson. “It behooves us to make sure every single member of the executive team has what it takes, is actively engaged, and is bringing their best to the table.”

Effective direct reports ultimately support a CEO’s decisions—even when they don’t agree with them. “You need inputs from lots of different people to make ultimate decisions, but once a decision is made and you put together a strategy, you have to have people who will align behind it and support it,” said Bill Weldon, former chairman and CEO of American pharmaceutical company Johnson & Johnson. “If you don’t, then it’s never going to work because it’s almost like a cancer that continues to grow and will undermine your progress.”

New Stakeholders

Engaging a board demands more time than many new CEOs expect.

“You go through your career reporting to [one] person. Now you report to 10—all with different personalities, backgrounds, and agendas,” said Scott Salmirs, president and CEO of U.S.-based ABM, one of the world’s largest providers of facility services. For many new CEOs, navigating this new reality often requires more time than their calendars allow. Building strong relationships with directors starts during “the honeymoon phase,” said Chip Bergh, former president and CEO of American clothing company Levi Strauss. “The time to start building your relationship with the board is not when you’ve hit your first bad quarter,” he said. “It starts on the very first day.”

“The time to start building your relationship with the board is not when you’ve hit your first bad quarter. It starts on the very first day.” – Chip Bergh, Former President and CEO, Levi Strauss

CEOs can find quality time with board members by including them in activities that are already on their calendar, said Dave MacLennan, former chairman and CEO of Cargill, the largest privately held company in the U.S. Though private, the company is governed by a board. “I invited two board members [to Brazil] so they could see what we’re doing in sustainable and regenerative [agriculture],” he said. Experiences like these also help directors understand the business in a way that doesn’t feel like an academic exercise, he added.

C-suite leaders can also help lighten the burden, according to Frank Williams, CEO of U.S. medical provider Healogics. “We have directors that have some very specific skill sets, and they typically have monthly conversations with my direct reports. This ensures that the board gets a perspective that’s not just mine,” he said. It’s an approach that minimizes chaos in the boardroom. “When you get to the board meeting, if somebody says, ‘Well, I think we should do X,’ the board member with the connection to the functional leader can say, ‘Yeah, that doesn’t really work for these reasons, and we’re working on these other three priorities.’”

Starting Points for Effective Board Relations

What are directors not saying? “In my first year as CEO, it took me a while to realize that much more was being thought about by my directors during our board meetings than was being said by them in those meetings,” said Ron Sugar, former chairman and CEO of Northrop Grumman, an American aerospace, defense, and security company. “It was really important for me to reach out to my directors individually between board meetings, and also to mobilize my C-suite team to reach out to their board committee counterparts to make sure we fully benefited from the full range of their thinking.”

Which board agenda items are critical—and which are not? Speaking with World 50 members halfway through his first year as CEO of Norwegian Cruise Line, Harry Sommer described being surprised by how much time can be lost in the boardroom due to rabbit-hole conversations. Find the “right mix between talking about big ideas and not deep-diving into areas that perhaps aren’t as strategic,” he advised.

Mature CEOs get to the point—even when it’s not pretty. Directors expect problems to arise, said Michael Burgess, CEO of private equity–held Jostens, the leading American provider of school celebration products including yearbooks and graduation regalia. “What they want is quick visibility and to be able to help you problem-solve.”

Frank Blake’s Strategy for Building a Strong Reputation With Directors

“How do I want the board to think of me?” It’s a question that Frank Blake, former chairman and CEO of U.S. home improvement retailer The Home Depot, asked himself early in his tenure to assess the reputation he hoped to build with board members. The ideal traits he identified—to be transparent, strategic, results-driven, and team-building—informed his approach to board meetings and relationships with directors.

Reputational goal: To be a transparent leader.

Tactic: Blake began each board meeting with an executive session outlining five things that were working well in the company and five that needed improvement.

Reputational goal: To be a strategic business operator.

Tactic: Blake focused board conversations not only on the performance outputs of the business, but also on the inputs that generated performance.

Reputational goal: To drive great results.

Tactic: Blake reviewed the strategic rationale behind repetitive core processes and advised the board early and repeatedly when considering riskier strategic bets.

Reputational goal: To build strong teams.

Tactic: Blake never let a team member fail in front of the board. If, for example, a functional leader with underdeveloped presentation skills was on the agenda to present, he set expectations with board members beforehand—in a way that celebrated the leader’s subject-matter expertise.

New Responsibilities

A public company CEO’s first year is more indicative of long-term success than their first 100 days.

A CEO’s first 100 days have long been considered one of the most critical periods of their tenure—a time for leadership changes made quickly and small wins secured just as fast. But, instead of driving the speed of change, many veterans of the role advise new CEOs to identify how fast the organization is ready to move.

In the first few months, it’s best to reserve judgments, said Lila Snyder, CEO of Bose, a privately held American innovator and manufacturer of audio equipment. “Making changes too prematurely or before you have a good understanding of why things are the way they are can destabilize a company and put a new CEO’s top business objectives at risk,” she said.

“When you’re a new CEO, calls for you to take action are strong. When you’re enlisted to lead an organization out of crisis, those voices become louder,” said Oscar Munoz, who became CEO of United Airlines in 2015, as strained labor relations and lagging customer satisfaction demanded a cultural overhaul. “Resist that impulse to act. Listen first. Learn the organization. Only then can you lead and act decisively.”

Upon taking the CEO seat at U.S. global professional services provider Marsh McLennan, Dan Glaser identified urgent priorities that demanded a faster pace of change. “I wasn’t really focused on culture in the beginning. I knew Marsh McClennan was a blue-chip firm that had just gone through a bad experience, and its belief system was damaged,” he said. “So, [I was initially focused on making] a thousand good decisions [and] putting people in the right jobs. … In my mind, there was an Act One and an Act Two. Act One was desperate and short term. Act Two was about culture and growth.”

“When you’re a new CEO, calls for you to take action are strong. When you’re enlisted to lead an organization out of crisis, those voices become louder.” – Oscar Munoz, Former Chairman and CEO, United Airlines

New CEOs should work with board directors “to align upon a shared vision of what success looks like—because so many circumstances and priorities may have changed since you first took the job,” said Munoz.

Starting Points for Building Momentum

Strong relationships with middle managers can help new CEOs gain buy-in for change. Building trust with middle managers through frequent and repeated meetings is critical, as they often function as the “antibodies” to change, according to Barry McCarthy, president and CEO of Deluxe, a trusted payments and data company that processes roughly US$3 trillion in electronic payments annually. “Every morning for the first six months, I gathered groups of two to three middle managers for a breakfast off-site,” he said. It’s a tactic that makes a CEO more approachable and allows them a better environment for getting to know managers more personally.

Who’s right for the company—right now? Establish a window of fairness, and then be decisive about personnel changes; these decisions don’t get clearer over time, said Anne Mulcahy, former chairperson and CEO of American print and digital technology retailer Xerox. Three leadership team members were not up to the journey of a company turnaround, she recounted. Their removal led to newfound trust and commitment among the remaining leaders that held for her eight-year tenure as CEO.

Every CEO’s calendar needs breathing room. Whether extroverted or introverted, new CEOs must know their limits when scheduling their first months on the job—a time when there’s no shortage of people to connect with, according to Margaret Keane, former CEO of U.S.-based financial services corporation Synchrony Financial. “You don’t want to end up … going to something [when] you really don’t want to be there. People sense that.”

New Responsibilities

For new CEOs of private equity–backed companies, creating value fast means identifying what’s slowing down their organizations.

Compared with their peers at public companies, CEOs of privately held organizations face an expectation for growth that’s in “hyperdrive,” according to Michael Burgess, CEO of Jostens, the leading American provider of school celebration products such as yearbooks and graduation regalia. Owners and board directors “want bold, fast action.” Making headway quickly demands that new CEOs identify what—or who—poses the greatest threat of slowing the company’s momentum.

Decelerators of Growth

Lack of Alignment About the Company’s Value Proposition.

“It’s helpful to understand what the board thinks the business opportunity is,” said Burgess. The company’s investment thesis—which will often emerge during a CEO’s interview process—will reveal “why owners bought the company and what they think they can do with it to create value.” A new CEO has a better chance of accelerating growth when they are in agreement with major stakeholders about the company’s primary value to consumers.

Unclear Priorities.

A new CEO should meet with their board chair or compensation committee to clarify what a “screaming home run” would look like in their first year—and what would be deemed a failure, advised Frank Williams, CEO of U.S. health care provider Healogics. “I’m a big believer in three or four priorities—any more than that, you start to get distracted. The most important thing, and the item that gets lost too often, is setting a clear group of goals for year one.”

CEO Indecision.

“Not making a decision is making a decision: It’s a decision to do nothing,” said Michael Franco, CEO of SitusAMC, a privately held U.S. provider of financial solutions in the real estate industry. Not making tough decisions, such as initiating employee layoffs, can have unintended consequences—even when a CEO’s intentions are empathetic. “If you’re worried about negatively impacting some employees in the short term, so you don’t make that hard decision, you might be negatively impacting a thousand employees down the line.”

Distractions.

“I’m no use to the organization if I’m not spending dedicated time thinking about the big picture,” said Norma Kuntz, CEO of asset optimization firm Gordon Brothers. She uses downtime during her extensive travel schedule to assess if her workload reflects the company’s top priorities. “It requires the discipline to constantly assess your time against the most critical business needs. If it is not related to that, then it’s probably not critical. You are responsible for everything, so you always want to be involved in everything, but you are not going to succeed if you do that.”

Managers With “Can’t-Do” Attitudes.

The best leaders at private equity–backed companies are often solution-minded and capable of working within tight constraints. The ones who aren’t up for this challenge are easy to spot, said Burgess. “You quickly get a lot of no’s: ‘No, we tried it.’ ‘No, we don't have the resources.’ ‘No, we’re all too busy.’ It’s just immediately obvious.”

Reactionary Leadership.

Spending too much time reacting to the inevitable fluctuations of the market or industry is counterproductive to building a long-term business—especially when a CEO’s success at a high-growth company is often measured in three-to-five-year transaction cycles, said Franco. “You end up being what I call a ‘vertical swimmer.’ You’re working really, really hard, but you’re not really moving anywhere.”

Internal-Focused Solutions.

The nimbleness of a small company can be a competitive advantage if CEOs explore external solutions for their unmet needs, said Valerie Oswalt, CEO of Kodiak, one of the fastest-growing food companies in the U.S. She joined the privately held company in 2022 after several years as the president of Campbell Snacks at Campbell Soup Company. “Sometimes, you feel like you don’t have enough resources until you go to a smaller company—and then you realize you had plenty. But, in a way, [fewer] resources can be freeing, because you aren’t tied to what you have in-house.”

New Perspective

It doesn’t have to be lonely at the top.

When it comes to the all-encompassing role of a chief executive, “the beast will eat whatever you feed it,” said Dave MacLennan, former chairman and CEO of Cargill, the largest privately held company in the United States. In turn, feelings of isolation are common, as new CEOs quickly realize they have no true peers in their organizations.

It doesn’t have to be that way.

“I don’t believe this job is as lonely as people say. I think people make it lonely,” said Bose CEO Lila Snyder, who took the helm of the American audio equipment manufacturer in 2020. “Of course, there are some things you bear the burden of, but you don’t have to bear them alone.”

“There are some things you bear the burden of, but you don’t have to bear them alone.”
– Lila Snyder, CEO, Bose

Support from inside the company helps CEOs avoid insulated decision-making.

The broad, enterprise-level mindset of a CEO, compared with the functional views of C-suite leaders, is why the role can feel lonely, according to Penny Pennington, managing partner at U.S. financial services firm Edward Jones. “Everybody else has got a dog, and their dog is in their fight. All dogs are in all fights at my level,” she said.

For her, it’s not only lonely at the top; it’s quiet. Too quiet.

“This is why I have 14 people who are directly responsible to me,” said Pennington. While the amount of face time with these reports varies, she has found that gaining perspective from those she leads—on a regular basis—is the best way to stay connected to the inner workings of the business.

But the CEO role demands healthy boundaries with colleagues, said Dan Glaser, former president and CEO of global professional services provider Marsh McLennan. “You know what I would do after a big event [when the] team is heading to the hotel bar? I went to my room,” he said.

External perspectives offer CEOs a creative boost.

CEOs shouldn’t be afraid to reach out to leaders outside their organizations—even those on the fringes of their networks or connections from previous jobs. Before Norma Kuntz became CEO of asset optimization firm Gordon Brothers, she served as chief operating officer and chief financial officer of global private equity at The Carlyle Group. “Having been in private capital for more than 20 years, cultivating meaningful relationships across the industry, I did momentarily wonder if those relationships would transcend industries. It has been affirming to see the strength of those relationships has not only maintained, but in some cases deepened since joining Gordon Brothers.” There’s no harm in asking for support, she said: “The worst thing that can happen is someone can say, ‘No.’” “The thing I tell CEOs to do is call [their] predecessors,” said Bill George, former chairman and CEO of Medtronic, a U.S. medical technology company. “A lot of [CEOs] don’t want to do that; they think it’s a sign of weakness,” he said, but their predecessor is well informed about the unique challenges of the business.

Starting Points for Strengthening CEO Support Systems

Effective CEOs find colleagues who will tell them what they don’t want to hear. “Create a cohort of people who will tell you the baby is ugly,” said Margaret Keane, former CEO of Synchrony Financial, one of the largest issuers of store credit cards in the United States. She found that her most trusted confidants weren’t always the people she expected. “As soon as you get that title, people change the way they deal with you—even people you might’ve known for your whole career.”

Many CEOs underestimate the qualitative data gained from time spent with employees and customers. Former Medtronic Chairman and CEO Bill George has found that most CEOs spend around 70% of their time with a small group of executive team members—which is a “disaster,” he said. He often advises new CEOs to spend 30% of their time with customers, 30% with employees, 30% in meetings and day-to-day work, and the remaining 10% with the board. “You can look at quality reports forever, but they don’t tell you what’s really going on,” he said. “Just get out there and find out.”

CEOs need the support of other CEOs. “I was really fortunate to have a great network of other CEOs,” said Gordon Brothers CEO Norma Kuntz. Connecting with fellow CEOs is a risk-free way to discuss common challenges. “World 50 is huge for me in that I can just reach out to [my group leader] and say, ‘Hey, I have a question. Is there anyone I could talk to?’”

New Perspective

Something Better Than a Work-Life Balance

Many new CEOs quickly realize that a work-life balance isn’t always possible. Veteran CEOs explain how to find time and energy for professional and personal commitments amid the chaos.