Even in the best of circumstances, CEO transitions are challenging times. The transfer of power in large organizations long has been recognized as a time of potential uncertainty and even instability. In fact, the term ‘interregnum’ was coined by the Romans explicitly to refer to this critical period – the time between the reigns of kings when there could be “widespread unrest, civil and succession wars between warlords, and power vacuums filled by foreign invasions or the emergence of a new power.”
Fortunately, CEO transitions (and top executive transitions more generally) rarely are so fraught. However, even in the most favorable circumstances – when a well-regarded internal candidate is promoted to replace a retiring CEO with a strong track record who is departing voluntarily, they must be managed comprehensively and with care, guided by a well-planned strategy . When they are managed poorly, it can lead to unnecessary confusion, loss of focus on the business and departure of valuable talent. A McKinsey study reported that when executives struggle through a transition, the performance of their direct reports is 15 percent lower than it would be with high-performing leaders. The direct reports are also 20 percent more likely to be disengaged or to leave the organization.
Much has been written about many of the key elements of successful CEO transitions, including the process through which the successor is chosen, how the operational transfer of power is structured, and whether there will be an overlap between the outgoing and incoming CEO. One key element which has not received systematic attention, however, is communication. Communication plays a critical role in CEO transitions for the outgoing leader, the incoming leader, the incumbent leadership team and the overall organization, with materiel impacts on engagement and performance.
CEO transitions tend to be relatively infrequent events, so most communication and HR professionals have limited experience with the unique demands of communicating effectively during these critical times. The experience of one of the co-authors (Teach) in leading communication for CEO transition teams over several decades offered her the opportunity to learn from multiple experiences. The other co-author (Watkins) has witnessed first-hand the impact that effective and ineffective communication have had in the transitions of new CEOs he has coached.
In the case of an internal transfer of power, communication is important to reposition the leader from their previous role to CEO. Without a concerted effort, the new CEO can miss invaluable organizational perspective and stakeholder insights crucial to their future success. Worse, they can create issues/misperceptions that will require resources and repair far into their tenure. Consider, for example, the CEO who has operations in multiple locations but chooses to spend much of their first 90-days planted in corporate headquarters. Not only could they miss vital insights by not engaging with a broad set of stakeholders, they squander a priceless opportunity to be visible in their new role. Failure to engage early and actively with a broad range of leaders and front-line personnel can foster alienation with senior leadership, attitudes that are difficult to change.
In the case of an externally-hired CEO, the time demands can be even more daunting than for an internal hire. Externally hired CEOs generally come in without established board and senior leader relationships and they must make important choices about how to allocate their time to engaging with key stakeholders and assessing the business. A well-thought-through communication strategy can help prioritize audiences for the on-boarding period and maximize the impact of the time given by the new CEO to these efforts.
Regardless of whether the new CEO is an internal promote or external hire, they need a comprehensive communication strategy informed by a proactive posture, and planned and executed by a competent communication staff. Every CEO transition has its unique elements; there is no “one size fits all” formula. However, there are guiding principles that can be applied to shape new CEO communications (and communication for new top executive more generally) in virtually all transitions.
Avoiding Communication Pitfalls
A good way to understand what helps is to look at common mistakes that undermine communication effectiveness during CEO transitions. In our experience, care must be taken to avoid these five pitfalls:
1. Not focusing adequate attention on the outgoing CEO.
When planning for a CEO transition, the selection and introduction of the new leader naturally receives the bulk of the attention. Even if the departing CEO is leaving on positive terms, such as retirement after a long, successful tenure, off-boarding may be relegated to ceremonial tasks and party planning. If a leader is leaving under less favorable terms there may be the instinct to avoid communication altogether and “just move on.”
What gets overlooked, in both these scenarios, is a thorough examination of staff attitudes, perceptions and needs around the departure of the ongoing leader. Front line workers, for example, may have different needs for closure than do upper management who have had more regular access to the outgoing CEO. In the event of a CEO leaving under duress, it is even more important to communicate; understanding there may be significant staff concerns and misperceptions, especially since word-of- mouth and the rumor mill may be leading sources of (mis)information around the transition. In the case of a planned internal succession, there is a wonderful opportunity to demonstrate a cohesive, smooth and positive transition between the two leaders.
How an organization treats its departing leaders makes a strong statement to staff and also to external stakeholders of the organization. Providing appropriate opportunities for closure, whether in positive or negative situations, also creates a smoother runway for the new CEO to make a successful transition. Staff at all levels, who must carry on work under the new leader, are given the appropriate opportunity to understand and process the change. They experience an organization that is transparent and values staff engagement.
To plan for to make the off-boarding as smooth as possible, it helps to:
- Inventory and recognize, as appropriate the accomplishments and impact of the out-going leader.
- Provide authentic opportunities for staff engagement and closure during the transition period. This could include events or on-line venues for staff to submit personal messages to the departing CEO. Many companies now create digital “memory books” for the departing CEO allowing thousands of front-line staff to contribute.
- Support managers during the transition as key communicators. Toolkits, FAQ’s and check-ins are all helpful
- Illustrate the positive connection between the outgoing and incoming leader, as appropriate, to support a more seamless perception of transition.
2) Missing or miss-prioritizing key stakeholders.
To be effective, CEOs have to build and maintain a complex set of stakeholder relationships, both internal and external. It’s therefore essential to communicate effectively with the full set of them about and throughout the transition.
Meeting with external stakeholders is on every new CEO’s to-do list and one of the most important strategies for accelerating early learning and connection. The new CEO often has strong guidance from the Board, especially concerning external stakeholders. Even here, however, the communication team can give the new CEO a broader sense of the external landscape, and sometimes of the intricacies of Board dynamics, so that importer stakeholders don’t get missed and the use of the CEO’s time is optimized.
The more common mistake, however, is to pay too little attention to internal stakeholders. It’s very time consuming to fully connect with the organization, and new CEOs must take care not to underinvest. We have seen, for example, internally promoted CEOs who haven’t prioritized internal stakeholder meetings because they are focusing on establishing new external relationships. What they miss is the importance of re-branding themselves in the eyes of the employees. They may assume staff knew them in their previous role and there is less need to prioritize internal stakeholders. Even for long-time C-suite executives promoted to CEO, there will be internal segments who are quite unfamiliar with them or who need to see the CEO in a new light.
Preparing comprehensive lists of internal and external stakeholders, focusing not just on individuals but on key institutions and their agendas, interdependencies and priorities, will help new CEOs allocate their time most efficiently and effectively. Well-constructed stakeholder maps are the foundation of workplans to guide meeting scheduling and communication for the first 90 days and beyond. Initial stakeholder meetings can and should extend far into a CEO’s early tenure. Unplanned developments may alter the sequencing, but solid initial stakeholder communication plans are an invaluable reference for CEOs and their schedulers.
It typically takes many months to engage with the full range of stakeholders, so it is important to continue allocating time for these activities and adapting stakeholder lists as needed to address the internal and external environment. Communication staff should work with the CEO’s support staff to track meetings, set schedules and manage correspondence following visits. Once a comprehensive set of stakeholders is developed and prioritized, a simple, concentric circle diagram (See “A Concentric Circle Model for Prioritizing Stakeholder Meetings”) can be created to help manage engagements with both internal and external audiences.
3) Not balancing telling with learning.
Good communications advisors help new CEOs strike the right balance between telling their story to build authentic, credible relationships and engaging in listening sessions to learn and gain insight. Both aspects of communication are important and the right balance depends on the situation and the new leader’s communication style and preferences.
More extroverted, charismatic new CEOs may be very comfortable speaking to large groups and selling their story or vision. They may be less skilled in effective listening techniques or adapting their style to various group settings and so run the risk of appearing less authentic or approachable to some stakeholders.
Conversely, more introverted CEOs may struggle with bringing energy to larger forums, but excel in small group settings and listening sessions. They run the risk of under-projecting and they may be challenged to instill confidence and enthusiasm in others. As a result, audiences struggle to understand what they stand for and their visions for the future.
Both types of new CEO’s can be very effective with proper planning and preparation. What they all should have in common is a message platform for their first stakeholder meetings, supported by authentic ways to learn and engage with key stakeholders. The platform should be consistent but adaptable enough that it doesn’t appear too “packaged or scripted”. Key elements include
- Your story: What brought you to this role and how has your experience uniquely prepared you to lead this organization
- Your assessment of the state of organization: Where are we today and what brought us here – emphasizing the positive when possible and the reality when necessary (especially if the company is in a difficult time)
- Your aspirations for the future: Where do you want to take the organization, why is it important to go there, and what roles can the audience play
- What are you going to do next: How are you spending your initial time and what is a next milestone? What should the audience expect as next steps? This is especially important in the first 90 days.
4) Not establishing consistent two-way communication across multiple channels.
Gone are the days when CEO communication could be primarily be 1-to-many projection using presentations, memos, emails and videos. Employees today expect opportunities to engage with the new leader and to provide input; failure to do this is a sure way for a new CEO to seem remote and unapproachable.
New CEOs must leverage a wide array of communication channels and venues supporting both one-way and two-way communication. Social media has been a game-changer for communication, yet a study conducted by Brunswick Group showed that only 48% of CEOs in top US companies maintain social media accounts. This is a big missed opportunity, as employees say, by a ratio of two to one, that they would prefer to work for CEOs who have a social media presence.
Social media, while not a substitute for face-to-face communication, is a particularly potent channel because it is accessible to both internal and external stakeholders and facilitates two-way exchange. LinkedIn is the most popular platform for CEOs, with 44% of them maintaining a presence on the site. Additionally, many organization’s intranet platforms can support social media-type exchanges through applications such as Yammer. Blogs, Vlogs and Live Videoconferencing allow new CEOs a rich array of options that can be tailored to specific communication needs.
These new media opportunities should be considered along-side traditional face-to-face engagements in both small and large venues. The right mix depends on the size and structure of the organization and the needs, including generational differences, of the key audiences . Social media and blogs are not a replacement for the authentic connection made through face-to-face exchanges. The value-add, however, is that traditional communication can be amplified with blogs, social posts, photo posts and other channels to extend reach.
What has not changed over time is the importance of consistent and credible CEO visibility across multiple channels. According to research by Burson-Marsteller in the US, a CEO’s reputation accounts for 50% of a company’s reputation. Building effective communication strategy from Day One accelerates positive reputation building. Consistency of communication is also key to establishing CEO credibility and positive impressions.
Once an effective mix of channels in determined, it is important to fuel the process with a regular flow of quality content from a well- designed message platform. Face-to-Face engagements, whether small group or large venue should always be maintained in the mix. There is an approachability and sense of connection that is best fueled through face-to-face meetings. These encounters, especially those held in larger venues, can then be shared across the organization via video or intranet to offer broader access. Although it is impossible for many CEOs to have face-to-face encounters with all their staff, they can certainly optimize the perception through strategically planned, documented and shared events.
Most CEOs have communication staff on their teams to assist with managing channels, organizing events, producing content and tracking responses. These activities are too time-consuming for the CEO to manage alone, but it’s vitally important that they are briefed and engaged with any channel carrying their name. Many organizations create a dedicated email for CEO inquiries that is constantly monitored and managed with direct input from the CEO.
5) Not getting new CEOs the right communication training.
It’s easy to assume that all CEOs became leaders because they are great natural presenters and very comfortable with speaking to others. Sometimes this is the case, but often it is not. CEO-level communication is different, with the audiences being larger, the pace more demanding, and the stakes greater. Also, the skills that get new CEOs to the top are not necessary the ones they need to be fully effective in the role. To paraphrase Marshall Goldsmith, “What got you here won’t necessarily get you there.”
Even the best presenters benefit from polishing their skills. As Dale Carnegie so aptly but it, “There are always three speeches, for every one you actually gave. The one you practiced, the one you gave, and the one you wish you gave.” A survey of 400 leaders showed that all believed presence can aid success, and 78 percent thought a lack of presence could hold them back. A prime indicator of presence, of course, is a leader's effectiveness when giving presentations or when speaking with the media.
The right training therefore can make a big difference. However, staff can be afraid to raise the subject at the risk of offending the new leader. The communication leader can play a crucial role in building an early relationship of trust with the CEO and introducing processes such as media training or speech coaching. The best way to broach the subject is simply by asking. The CEO who is well-seasoned with media and presentations may have an existing go-to resource that could be applied to this new role. In most cases, CEO express their interest in support, whether that is a tune-up on more extensive training. In all cases, the organizational communication leader should be highly engaged in facilitating and leading this inquiry.
One the subject has been broached, consider engaging a coach external to the organization for speech and media preparation. A coach brings value in their external perspective, helping the CEO make small adjustments that may not be apparent to the individual or those around them. Small changes in dress, body language, enunciation or inflection can make a dramatic impact if sustained. Coaches can give private, personal feedback that staff may find awkward or difficult. Many coaching relationships are long-lasting, helping CEO’s prepare for significant media interviews or presentations. It’s important to find the coach that is a good fit for your CEO and allow the relationship to mature. Additionally, coaches can work with communication staff to enhance their support of the CEO in terms of preparing speeches and presentation briefs in a way that compliments the CEO’s training.
Avoiding these five pitfalls, while of course not a guarantee of success, provides a solid basis for developing an implementing an effective, impact plan for communicating during CEO transitions. Many of the same principles (see “A New CEO Checklist”) also can be applied to most top executive transitions in large organizations.
A New CEO Communication Checklist
Off-Boarding the Outgoing CEO
- Assess the needs and willingness of the ongoing CEO to engage in communication about the departure. Some CEO’s are reticent to engage, sensing this is a self-serving activity, but it is important to emphasize the need for staff closure and creating a smooth entry for the new leader.
- Conduct a qualitative and/or quantitative organizational scan of attitudes and communication needs around the departure and develop a stakeholder analysis and recommendations for channels and messages.
- Find ways to help all employees reach closure. Not every employee can have direct access to the departing CEO and there have been very innovative off-boarding activities using intranet Town Halls and virtual recognition activities.
On-Boarding the New CEO
- Map the external and internal stakeholders with whom the new CEO should engage within the first 90 days. Leverage this analysis to develop a communication plan aligned to organizational and individual priorities for the new leader.
- Organize stakeholders into priority groups so the new CEO can reach the most important within the first two weeks, then the first 30 to 60 days and onward from there. This prioritized list becomes a roadmap for allocating CEO time, and is updated regularly.
- Define the “message platform,” a well-defined list of key messages and topics for the CEO to communicate in their first 90 days. This will always include their personal story and message of introduction married with, depending on the situation, their plan to learn or their plan to act. The message platform should be updated following the initial 90-day period and should be used on-going with the CEO.
- Identify the communication channels, considering a variety of in-person, digital, on-line and video options. Use those that are most authentic and complimentary to the new CEO’s style and approach. Media and presentation training should be offered and encouraged to all new CEOs, regardless of their previous experience.
- Lay out a team action plan, a timeline of key activities, describing the target audience, desired outcome (in attendance or engagement) and responsible party for implementing. This detailed roadmap guides the work of the communication team and administrative support personal. This also allows for quick CEO updates on communication plan progress, results and next steps. The action plan can be adjusted over time as situations necessitate.
About the Authors
Donna Teach is Chief Marketing and Communication Officer at Nationwide Children's Hospital. In her thirty-plus years as a communications professional, she has worked on numerous CEO transitions under a wide range of circumstances. Michael Watkins is the co-founder of Genesis, a leadership development consultancy, and a professor of leadership at the IMD business school. He is the author of The First 90 Days and advises new CEOs through their transitions.