New CEOs: The first 100 days...

Daniel C. Jones

As a follow up to last year's article on the art of CEO succession I spoke with Ron Culp, Partner and Director of one of the world's largest public relations and communications agencies about the importance of an incoming CEO's first 100 days.

“I think that for everyone in corporate America - and in politics - everything is measured by the first 100 days”
-Ron Culp, Partner and Director, North American Corporate Practice for Ketchum Inc.

Ketchum operate in more than 65 countries through over 100 offices and affiliates and focus on five major global practices: brand marketing; corporate; healthcare; food & nutrition; and technology.

A well-known figure within the Chicago business community and one of Crain's Chicago Business's "Who's Who in Chicago Business", Ron Culp joined Ketchum in 2006 from financial communications firm Sard Verbinnen and was previously senior vice president of public relations and government affairs for Sears, Roebuck and Co.

I discussed with Ron the importance of an incoming CEO's first 100 days.

Would you agree that the first 100 days is definitive for all incoming executives?

Yes absolutely. I think that for everyone in corporate America - and in politics - everything is measured by the first 100 days. It really extends to all executives because those first 100 days define whether or not you're going to be successful.

Is there anything in particular that a CEO needs to concentrate on when first going into an organization?

A lot of preparation ought to go into understanding the culture of the organization and what the culture will accept. In many cases the CEO knows that he or she has to change that culture, but it can't happen in the first 100 days - they have to find ways of getting the culture to buy their leadership and then launch into the change or transformation effort.

An incoming CEO must make the necessary cultural, strategic and structural changes.

Here at Ketchum we call it doing a "culture match audit", where we go in and make sure that there is an understanding between the culture with which the CEO operates, and the culture of the organization that they're entering, otherwise there's conflict from the beginning.

We've seen CEOs who've come in and said, "I want nothing to do with the past of this organization; this organization needs to make dramatic changes now and I am going to force those changes." And that CEO lasts maybe, if they're lucky, three years.

Is the role of culture dependent on the nature of the appointment - whether the previous CEO was dismissed or whether they left voluntarily?

Exactly. I've worked with one CEO to whom the advice had been: "You need to spend time with understanding the culture of the organization, and how critically important it is to come in and learn from the past. So even if you're not embracing it philosophically or operationally, you have to know where the troops are coming from and how they've operated, because if you object and just say "Nope, we're doing a total shift in the way this organization is going to be run," the conflict can be very intense."

A leadership team almost always has people from the previous administration where the management team comes in and says, "He's going to fail, but he doesn't want to listen to us, so we're going to go through the motions of doing our jobs and eventually hope that he corrects course."

That's why the audit is so helpful. We're able to tell them the landscape that he's facing and pinpoint culturally what he's going to be dealing with. In some cases it's nuances in word choice that you say - if within the company culture people say a certain word and you try to change the meaning, or if you don't understand the meaning, this can also lead to conflict.

We once put together a list of 700 unique words and descriptions within a major company. It was a complex organization, a new CEO was coming in, and the nomenclature of so many aspects of the organization, including titles for jobs and everything else was different, so we pulled together a briefing document which basically outlined the following: "Here are the terms that you need to know coming into this organization in order to show your respect to the organization - this is how they operate."

And at first he kind of pooh-poohed it, but within the first couple of weeks we saw him using all the terms, and he became a force within that company because he spoke their language, even though he was totally transforming the organization. They trusted him to lead and transform the company because he understood the culture of the institution.

So, any incoming CEO will be well-advised not to neglect the minor details right down to the language that they use, the terminology they use and their understanding of that terminology?

Absolutely. My number one piece of advice.

What's your opinion on interim CEOs? Companies that favor someone to come in on a preferably short-term basis to make some wholesale changes before then studying the shape of the longer-term appointment. Is that something businesses in today's times are favoring?

That's a very interesting question. I think that model has already played itself out, but I think it still happens to some extent.

It was primarily in the 1980s and early '90s, when companies had the tendency to employ - what I always called - "hired guns". They came in and to shake everything up and then somebody comes in after confronted with a much leaner organization with which to work.

That happened around one or two decades ago, but even today I think some of that thinking is still in people's minds when they make hires, but it is not as apparent and is not often discussed as a sustainable solution. Interim seems to be reserved for when there is a sudden departure and they are bringing somebody in to just to wield the axe and leave.

Can you think of any specific examples of a "hired gun" that may have been successful in the past in coming in and reshaping a company?

Successful is the key word. Most people would say that [Robert] Nardelli going into Chrysler is a known temporary fix for what they were trying to achieve - well the whole Chrysler mix in fact, because then they also brought in Jim Press from Toyota.

And so they made the decision that "if we're going to correct our course, we're going to bring in executives from the outside, they're not going to be long-term and they're not going to be viewed as long-term."

Today most organizations culturally, unless the place is totally in meltdown, want the stability of a leader that they know is going to be there and they want a leader predictable in making decisions on their best interest.

For an incoming CEO, what specific steps can they take to ensure they hit the ground running? Are there common practices that are always going to be a winner in terms of either just stamping authority or letting people know that they mean business?

Yeah, you know it goes back to that first 100 days and it actually starts from the day that their named.

We laid out a game plan for one incoming CEO saying, "here's your 100-day game plan." He said, "No, my 100 days started the day I was hired." And he was right. Expectations immediately start getting set, and what you say, do, the meetings you go to, the first place you visit in the organization, are all judges.

You might think it's perfectly innocent, going to visit a production facility in Alabama, but all of a sudden all of the other production facilities then wonder "Why were they selected and not us?"

So you really have to assess and lay out: "How do the activities I'm going to be doing in those first 100 days interrelate?"

We would then spell out a plan that says: "Let's first of all understand the culture," so we're going to do a culture audit, then we're going to, since the honeymoon period is so short, do a lot of preparation including what are we going to execute during those first 100 days.

Communication is emphasized heavily because if the new CEO doesn't communicate then that vacuum in communication is filled with rumors and gossip, people speculating: "What's he up to?"

So that first 100 days has gone from radio silence to being very visible in the communications sphere, so people know and feel that transparency to your leadership, that they know and feel confident that you're doing the right things.

So an incoming CEO has got to prioritize issues facing the company and avoid being distracted by things that are less important. You know, our President, Barack Obama, ran a beautiful campaign and then found out how difficult it is to govern once you win because of all the distractions and the attention that is required on so many things.

If you become distracted and let things pull you off of what your focus should be, or if you try to take on too many things at the same time, you're going to diminish those first 100 days, which is what happened with Obama.

So the value of a detailed and highly thought out agenda should never be undervalued?

Absolutely. And stay the course once you set it.

 

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The art of CEO succession | Building brand identity | Raj Rawal: A whopping success for BK