By David Roche 

Two out of five CEOs fail in their first eighteen months according to the Harvard Business Review, and it’s not their experience or expertise to blame; it’s their lack of people skills and inability to build the necessary relationships with the key points of contact in the company.  

McKinsey asserts that $1 Trillion is lost every year in market value of S&P’s top 1500 companies as a result of poorly planned transitions of CEOs and C-Suite appointments. That’s a pot of gold large enough to warrant a serious response. In reality, the job is not done when the new CEO has been chosen and signed up – it’s only the beginning. 

The high failure rates are evidence of too much focus on the selection process and not enough follow-up to ensure integration is deeper than mere induction meetings. Too often the new CEO is expected to be out of the blocks on day one and delivering items on the 100 Day Plan. Arguably one of the biggest jobs in the world is President of the United States; there is nearly a three-month gap between the declaration of the election’s winner to the inauguration day when they take up office, and a transition team is appointed to help manage the process.  

However, no such support is in place for new CEOs. It’s no wonder that seven out of 10 leaders are said to suffer doubts about their experience or skills being adequate. In this article, I will discuss why the focus for first-time CEOs should be on people skills and relationship building to ensure they feel fully equipped for their role.   

Technical skills will only get you so far  

In business, people who have reached the top of an organisation are expected to come pre-loaded with all the necessary experience and skills required for the job.  New CEOs have typically had a successful career to date and often seem destined for the leading role. In the eyes of others, they may make it look easy and appear to ooze confidence.  

In reality, a first-time CEO probably experiences the reverse of this. Of course, they had ample skills to be promoted to the role, but now find they are taken out of their comfort – and sometimes competence – zone and put into an unfamiliar position of overall responsibility that they have not experienced before to this degree. This is most often performed without being provided with support and coaching designed to ensure that they will execute to the best of their ability.  

Even with their technical skill set, what is often going through the new CEO’s head is: 

• I’m supposed to be good enough or I wouldn’t have been given the job. 
• I’m supposed to have all the answers as I’m the person running the company. 
• Everyone is expecting me to know what to do, to give my opinion and to make the right decisions. 

When this is the case, it is how this CEO then builds their relationships that will set them up for success. There is real pressure in this new role, for most it is at a level that they’ve never experienced before. As a result, some choose to wear the armour of a supremely confident image despite what is actually going on underneath. What this behaviour can discourage is the willingness of those around such a confident leader to speak truth to power, as such advice is not received well. Genuine confidence is evidenced when the leader reaches out for help, building their people skills and creating an environment that encourages debate and accepts differing viewpoints.  

The ability to step into others’ shoes and empathise is increasingly rare, but these are part of the arsenal of the highly skilled leader – in business, as well as politics. Only when a leader is prepared to lean on their people skills can they create the environment that allows their and their team’s technical competency to shine through.  

Relationships are unpredictable  

The CEO Winner’s Circle highlights the key relationships first-time CEOs should be building both inside and outside the company. It all starts with you, as the one constant in every relationship that you have.  

Every individual is different amongst all these vital connections and there’s no set answer that can be applied in all cases to any particular category. Any great sports athlete who competes against others will be trained to make initial moves or set plays to defeat an opponent, but the truly great individuals and teams transcend that and play what is in front of them. They override the set play that the hours of practice have tried to instil as second nature and just go for it: the drop shot in tennis or, most obviously, the strategy and reaction on a chess board.  

Arguably there is no right answer in any given situation in a relationship, as the person opposite you may react differently to the person before or the next person – their reaction may, indeed, be unique. There are likelihoods, certainly, but no certainty. As Mike Tyson famously said in answer to the question about whether he was concerned about his next opponent’s strategy to defeat him: ‘Everyone has a plan until they get hit.’ This is why it is essential new CEOs are constantly refining their people skills so they have the techniques to influence in a wide array of settings.  

How do you build the necessary people skills?  

New CEOs can be prepared for what they need to do, but are most often unprepared for the psychological and emotional intricacies and impacts associated with the role. This is why coaching, mentoring and business books all handle this critical area of relationships differently. Business books tend to follow a format of the top five things to do/avoid in order to succeed and that’s very difficult to do with relationships. If x happens, then does y work less well here? However, first-time CEOs need a safe sounding board and a wise head to be able to think things through and to learn on the job which is where coaching and mentoring add value. The results can be dramatic – when your problems seem insurmountable, the solution can appear miraculous.  

Ultimately, when new CEOs encounter challenges, it is the support, guidance, advice and skills of those around them that will help them persevere. 

About the Author

David Roche is the author of ‘Become a Successful First-Time CEO’ and, a professional coach and mentor at Grey Area Coaching, working with first-time CEOs across many sectors. David is Chair of London Book Fair and the writing agency New Writing North. He also works as a consultant with startups entering the book industry and lectures at NFTS. David was previously CEO of Borders & Books, Product Director of both Waterstones and HMV and Group Sales and Marketing Director of HarperCollins Publishing.