The five rules every new CEO should follow
Recently, an executive who was on the verge of being promoted to head his global, publicly traded company asked for my advice on how to be effective as a new CEO. I offered him five recommendations:
1 EXPAND THE PIE
The most fractious and difficult thing to do i n an organisation is to take resources away from someone who is used to receiving them. For this reason, growing the revenue pie is critically important to the success of a CEO’s reign. If a CEO attempts to reallocate existing resources in order to improve the organisation’s prospects, endless fights and a firestorm of protests will ensue.
If, however, the company focuses on increasing revenue, then its investment capacity will increase and it can funnel new resources to growth priorities without needing to cut absolute resources to nonpriority areas. Over time, as the revenues grow, the non-priority areas will diminish in size, and when the priority areas succeed, the CEO can shut down the non-
priority areas without much hassle.
2 FOLLOW DUE PROCESS
CEOs aren’t always obligated to follow due process. For example, they have the power to fire anyone they want. However, it is critical that as CEO, you do follow protocol because all of your employees will be watching you with a keen eye and wondering whether they, too, will be the objects of seemingly arbitrary decisions. When it comes to firing someone whose performance isn’t up to par, be patient and give him feedback and a chance to improve.