On his recent trip to Barcelona with Genesis CEO Richard Wetzler, Michael Watkins was interviewed by Suez (CREA), Europe's second biggest water utility. Please enjoy a video recording of the interview below.
During the same trip, Michael Watkins gave an interview for El Mundo, one of Spain's largest and best regarded newspapers. Please enjoy a translation of the interview (below) which was published on the 10th of December 2017. Follow this link to read the full article in Spanish.
At First, the New CEO Must Listen
by, Marti Saballs
The success or failure usually takes place in the first three months of arrival at the company. Each of the movements the CEO makes will be symbolic enough to mark the rest of the journey.
Consultant and professor of leadership and change at the IMD Business School in Lausanne, Michael Watkins started his career at the Kennedy School of Government at Harvard University, where he was involved in the mediation of different international conflicts, like the one in Bosnia. His book The First 90 Days remains a business reference for executives who assume leadership in organizations, whether internal or external.
MS: What is the first decision you should take in a company as a newly-appointed CEO who comes from a sector other than company he or she is joining?
MW: Build the team correctly and understand the central problems that the organization has on the table. Although he will never know as much as the people who have been working for a long time in the sector, the new CEO will contribute a fresh perspective. The team will be key to creating a strategy. The CEO should look for a balance between industry knowledge, knowledge of the organization and new approximations.
MS: Do you have to bring people from the team that you previously led?
MW: Depends on the severity of problem that exists in the company where he has been appointed. If the problem is serious, he can bring in people from outside, experienced and bright. But if the organization in which you have been appointed the new CEO is successful, it’s best not to bring in a lot of external people. Doing so could create an internal problem between the old guard and the new one. You have to know how to value internal talent. The key is to start giving messages about the value of the people who work in the organization.
MS: Do you have to send an email saying 'here I am'?
MW: There is no reason to, though I agree it is good to announce your arrival. Does it have to be by email? Not necessarily. Initially, you have to say that you have landed, although not maybe immediately. I recommend a message at the end the first week that indicates initial satisfaction on joining the organization.
MS: How should he conduct the first meetings?
MW: At the beginning, with the president of the Board and the Board of Directors, a lot of what happens these first weeks are symbolic. The new CEO will not make decisions immediately and must send signals. For example, in the order of the initial meetings. It is important to visit the center of operations the two first weeks, sending a positive message to the rest of the organization. Of course, you have to meet the first day with all the senior executive team. Give one welcome. You have to get together personally with each of the executives that are key in the company. These meetings should not be about intervention, but should be dedicated to listening. Follow a normal rhythm. Be as an observer, be attentive and proceed slowly. Unless, of course, there is a serious crisis that needs to be resolved.
MS: Who is the most important person on the executive committee?
MW: If it is a company that needs a big change, the financial director is in first place. And after the financial director comes the director of operations. The HR director is key if it is necessary to reduce employee numbers. In a successful company with great vitality, the director of marketing is essential. The idea is to understand who your critics are and who you can trust.
MS: General Electric instituted an internal search for Jack Welch’s best successor. What predisposition exists today in USA between searching outside or inside of the company?
MW: Formerly, in most of the circumstances, there was always an obvious successor within the company that was recognized with time. Nowadays, companies search internally and externally. It's almost an obligation to do this.
MS: Does the external search also work for family businesses?
MW: There have been both cases. Looking for talent internally, because they are prepared for new scenarios and know that they have the necessary talent. In sectors such as pharmaceuticals there is a need to look for new knowledge due to the constant innovation in the sector. In any case, the key is to adapt your approach to the culture of the company, especially in the case of the family business. The external executive must learn with exceptional speed about the family and their traditions; learn how networks work within the company, which can be more complicated and informal than in a non-family business. On everything, you have to align yourself with the family.
MS: How do you balance these months of transition with personal life and not burn out?
MW: The initial weeks are essential. You do not want to exhaust yourself. It is recommended to “disappear” for a few days before joining the new job. Once you are onboard, you will need to organize yourself and find a strategy that balances your time, establishing a methodical agenda that takes into account your work and your personal life. The biggest danger is losing the meaning of the objective, the connection with your family and friends, or neglecting your physical health. What happens in your personal life will impact your professional life.
Ten Basic Steps for a Good Transition
- Mentally and physically prepare the change before it occurs. Get fresh to the new position.
- Accelerate the learning that involves change. Analyze which are the best sources of knowledge.
- Adapt the strategy to the situation of the company. What each project, process and business unit requires. Why business should be bet, which should be relegated or, directly, discarded.
- Negotiate success and establish the right relationships. Either with the superior boss, where the board of directors can be included, or with the team that is directed.
- Ensure early victories to build trust and credibility.
- Identify the correct alignment of the company: structure, strategy, systems, capabilities and culture.
- Develop the team, either the inherited or contributing new additions. Establish new processes.
- Create alliances Determine the networks of influence inside and outside the company, behavior patterns. The formal power compared with the informal.
- Keep the balance. Make the right balance to analyze the emotional, professional and physical state. Estimate what is going well and badly. See how the professional transition affects the family circle and friendships. Rectify what is not going well. There is always time right now.
- Accelerate everyone's transition. Once you have identified the key elements of your decisions, involve the team with which you have accounts. Use communication and transparency You have to know where you want to go and why.