7 Rules for Successful CEO Transitions—and Presidential Ones Too
Originally published at Forbes.com
With today’s news cycle occupied by the presidential transition in Washington, D.C., each new member of President-elect Trump’s administration is being vetted.
The presidential transition got me wondering about the rules that apply for successful “transplants” within the private sector and if they are—to any degree—applicable to the arrival of a new president who builds out a new strategy and a new team. When a new CEO is brought in from outside the company, it often means that organizational changes need to be made for the company to be more successful. A change in leadership implies the need for a change in direction.
I’ve been in that position four times as a new CEO, being brought in to a company that has gone “off track” or just needs to adjust to new market realities. I have also studied and written about how companies conduct searches for new CEOs—what makes some transitions successful and others not as much.
So, whether you’re a new U.S. president or a company CEO, how do you ace a transition? The rules in the private sector are relatively simple to say, but not easy to do:
The first 12 months are key. You have to have your people and your vision in place, so change starts well before the end of year one, or you will be stymied by inertia and resistance.
Don’t make significant decisions for the first three to four months. Focus on listening and don’t allow upward delegation to force you to make decisions that won’t get you on the necessary path.
By the sixth month, using what you’ve heard from actually listening, communicate the critical “end goals” and repeat them endlessly to get people thinking and sharing ideas for how to get there.
Pull the trigger on the four to five most important initiatives before the second set of six months is over. Make clear that other waves are coming, but take on the most important or challenging ones with a clear message that the “debate is over” and the company is officially committed to the desired outcome.
Personnel is policy. Bring in or promote people who have the same vision and have experience putting it into practice. Publicly demote or fire those who are committed to “the way we’ve always done it”—which doesn’t align with where you want to be headed.
Share information about your progress and praise the heroes who made it happen. Those who effectively carry out your vision need to be singled out, so they feel appreciated and others are more incentivized to follow in their footsteps.
Toward the end of year one, your main job is to get yourself out to listen to your organization and key constituents, and get their feedback and perceptions. You will also need to clarify and correct what the grapevine is telling them with the actual plan of action, reinforce why change is necessary and paying off, and admit where course corrections may be needed.
Beyond the corporate world, these rules also apply if you’re the incoming president and the “organization” is the federal government. But there are limits to the analogy and applicability. As president, your shareholders are your voters and your job is to deliver what they have decided they want. Instead of a board of directors, you have the legislature and the judiciary to make sure that you pursue those goals within the framework of the law—your corporate governance framework—and the Constitution.
Perhaps the greatest challenge is that the executive branch, while it is the incoming president’s “organization,” maintains its own agenda and its own constituencies. In reality, the president-elect’s true organization is the team of cabinet, agency, and staff members who are appointed to work the new administration’s agenda through the rest of the executive branch as well as Congress and the courts.
With Inauguration Day fast approaching, which rules are most important? Listening to shareholders—namely, the voters—has been going on for a long time, with the vision being shaped by what the new administration has learned on the campaign trail and in the way the electorate voted last month.
It seems that rules one, two, and three are applicable, and that the new administration has adhered to them. Rules four and five also seem to be guiding the incoming administration in that the commitment to certain outcomes is very clear, with the first wave of presidential nominees certainly echoing that change is coming.
The challenge ahead is this: How do you apply rules six and seven in the face of what will be clear resistance from tens of millions of critics and skeptics? Can the celebration of success not be a source of alienating other constituencies, but rather be used to promote cooperation? Can the new administration put the good of U.S. citizens ahead of other interests, sharing the credit and avoiding the blame game?
Holding any major public office, especially the presidency, is a much more complicated job than running a single company. The constraints and barriers to success are of an entirely different nature and degree.
However, human nature remains the same. The process of implementing change relies, to a large extent, on recognizing the seven rules for a successful transition and how they are based on human nature. Whether it’s President-elect Trump or a company CEO, success comes down to your first 12 months and how well the rules are followed.