The first 100 days
Article Date: May 19 2006
Strange, even improbable, it may seem but the recent Conservative Ball was notable. Not because there were lots of young men and very pretty young girls – no, because the Conservative leader, the boy wonder David Cameron, didn’t wear a tie for a black tie event!
Not surprisingly, this attracted, (a) criticism, and (b) press attention. But it was a great way for him to make a statement – the Tories are no longer old and boring but young, risk-taking and reformist.
You may or may not agree with his politics but there is no doubt that his first 100 days have created enormous enthusiasm in what appeared only four months before to be a dispirited, tired and defeated political party.
Carrying no baggage
CEOs in their first 100 days can also have the same effect. Setting the scene, creating a buzz and an air of expectancy is what charismatic leadership is all about, and it is the first 100 days that does more than anything else to make this happen.
The other benefit of being the new boy on the block is the ability to question everything. You weren’t responsible, so sacred cows can be killed.
There’s a recurring theme I find in poorly run companies. No one wants to change the status quo, but often diversification or poor business models are damaging basically good ventures. The elusive search for turnover growth at the expense of really solid maintainable profits comes to mind.
My countdown as a new CEO
Day One: Meet all those reporting to me directly and discuss with them their views on how and what they should report. In other words, carry out a sort of personnel inventory. Include in this the pay structure and incentivisation packages of the particular sector. Many companies incentivise sales staff only, so I would look to see if I could find a profit-enhancing way of broadening incentives to a wider and deeper group of people.
Next on my agenda would be a look at the organisational structure to see where obvious cost savings can be made. New CEOs can take tough decisions on people. This may include redundancies and the like, but the real benefits are in allowing the second level of management to move up. This is particularly true in private companies. The old guard are often holding back an excellent team.
At Sage, time and again we have been amazed when we acquire companies at the quality and depth of people below the board. Properly motivate these people and you should have a tiger by its tail!
Day Two: I’d meet everyone I could. Any manager’s assessment of the people that report directly to him or her will become really interesting.
Day Seven: My next task would be setting up meetings with key suppliers and customers and understanding in detail the terms and conditions and trading patterns of each key contact. I’d use the 80/20 rule; in other words, I’d only go for the customers that really count. At the same time I would get the accountant to really analyse the numbers, including my big bugbear, product line profitability.
Day 14: Spend time talking to the marketing people in conjunction with the accountant’s figures to see where the company’s marketing bucks should be spent. I’d need to have a really good look at pricing and product positioning. Drive them slowly mad.
Day 21: Decide on my strategy. Make whoever is responsible for HR a personal friend.
Day 28: Start implementing my plan. Make staff changes and go through the correct personnel procedures to try and avoid any time-consuming legal actions.
Month 2: Talk to the press and the PR agent. Start hiring new recruits in key positions.
Month 3: By now I would know if it was a winner or not! If the company is a public company, I’d buy some shares, or alternatively, look for another job.
Take care – risks abound
But lest you think that all you have to do to get your business booming is hire a new CEO – beware!
There are litanies of companies that have hired CEOs who have then gone on to destroy shareholder wealth in a big way, such as Marconi and Cable & Wireless.
So how do you spot a ‘bad ‘un’? Very difficult but here again the 100-day rule applies. In virtually every case of a CEO not working out, the signs were there within 90 days of appointment. So make sure you have a proper probationary period in place, however enthusiastic you are on the new hire.
If you are not 100 per cent sure at the outset, try and make the initial appointment as, say, chief operating officer, with the CEO title to come.
