In an interview with the Harvard Business Review, RHR executive David Astorino said that one of the biggest and most consistent regrets from new CEOs is that they don’t fire people fast enough.
“They almost always say, ‘I knew in my gut that was not going to work with that individual, and I wish I had trusted that gut feeling and made that decision faster,'” Astorino says.
This is a problem that’s most common to first-time CEOs, and particularly ones that come from outside the company they’re joining. Because they don’t feel like they know the company or people well enough, they hold back, and end up regretting it. Older CEOs who have been at the top before know that it’s better to lose some institutional knowledge in order to get someone you can trust.
Making that assessment and decision rapidly is particularly important because most new CEOs are going to want to make some big changes, and they need people who will act in the company’s interest, not their own.
Just how often do new CEOs shake things up? On average, an external CEO shakes up 63% of their senior team, and an internal hire, 55%, according to research from RHR.
These are the positions that have the most turnover when a new leader arrives:
If you’re holding anyone of those senior positions when a new CEO comes in, better start polishing that Linkedin profile.
Of course, bold HR moves don’t always pay off. Ron Johnson was an external, first-time CEO who ruthlessly cleaned house at JC Penney. Things didn’t work out too well for Ron. favouring friends or previous coworkers over industry experts can have disastrous results, and divorce strategy from a company’s core customers.
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