The Seven Surprises for New CEOs
were described first in the HBR of October 2004 in an article by Michael Porter,
Jay Lorsch and Nitin Nohria
on CEO leadership.
As a newly minted CEO, one may think to
finally have the power to set strategy, the authority to make things
happen, and full access to the finer points of your business. But if one
expects the job to be as simple as that, you’re in for an awakening.
Even though you bear full responsibility for your company’s well-being,
you are a few steps removed from many of the factors that drive results.
You have more power than anybody else in the corporation, but you need
to use it with extreme caution.
Porter ea have discovered that nothing—not even running a large business
within the company—fully prepares a person to be the chief executive.
The following seven surprises are most common for new CEOs:
- You can’t run the
company (The sheer volume and intensity of external demands
take many by surprise. Almost every new CEO struggles to manage
the time drain of attending to shareholders, analysts, board
members, industry groups, politicians, and other constituencies)
- Giving orders is very
costly (No proposal should reach the CEO for final approval
unless he can ratify it with enthusiasm. Before then, everyone
involved with the matter should have raised and resolved any
potential deal breakers, bringing the CEO into the discussion
only at strategically significant moments to obtain feedback and
- It is hard to know
what is really going on (Certainly, CEOs are flooded with
information, but reliable information is surprisingly scarce.
All information coming to the top is filtered, sometimes with
good intentions, sometimes with not such good intentions)
- You are always sending
a message (A CEOs words and deeds, however small or
off-the-cuff, are instantly spread and amplified, scrutinized,
interpreted and sometimes drastically misinterpreted)
- You are not the boss
(Although the CEO may sit at the top of the management
hierarchy, he still reports to the board of directors. At the
end of the day, the board—not the CEO—is in charge)
- Pleasing shareholders
is not the goal (CEOs must recognize that,
ultimately, it is
only long-term value creation that matters, not today’s growth
expectations or even the stock price)
- You are still only
human (CEO Should recognize he needs connections to the
world outside his organization, at home and in the community, to
avoid being consumed by his corporate live)
These seven leadership lessons carry some important messages:
- First, as a new CEO you
must learn to manage organizational context rather than focus on
- Second, you must
recognize that your position does not confer the right to lead,
nor does it guarantee the loyalty of the organization.
- Finally, you must
remember that you are subject to a host of limitations, even
though others might treat you as omnipotent.
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Seven Habits (Covey)
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