It's Incredibly Stressful When A New CEO Comes In To Clean House

Empty Office

Photo: flickr/audio_technica

For all of the positive things that come from a new outside CEO: fresh vision, a new strategy, and renewed optimism, it’s an incredibly scary time for the top executives at a company. Especially when the previous leader leaves under pressure, there’s a tendency to want to clean house. A recent example is Marissa Mayer, who let go Yahoo’s CMO and CFO. 

Ron Johnson replaced nearly every one of the top executives at JC Penney after taking over. 

The Wall Street Journal cites statistics from leadership coach John Mattone that should strike fear into the heart of anyone at a company that’s just made a change. There’s about a 30-40 per cent chance executives will be let go when there’s a new outside CEO. Even worse? Only four per cent end up in a better job afterwards. 

That means that some 96 per cent of executives that get forced out end up moving laterally, or moving down the ladder in a new company where they have to establish themselves all over again. A shakeup at the top can end up undoing years of work. 

That means there’s intense pressure on executives to make a good first impression on the new CEO, assure them that they’re not bitter about being passed over, and justify their function within the company.

Joanne Lublin writes about a head of HR who made the unfortunate mistake of waiting to engage with his new boss: 

“He and the CEO clashed over a proposal for an offsite management meeting. “It was a total miscommunication,” the HR executive recollects. “He didn’t feel I had done what he wanted.”

At their next meeting two weeks later, the chief executive declared, “I am not sure you are what I need in an HR leader,” and said that he preferred someone more focused on controlling staffing costs.”

Not long after, the exec was forced out, and remains unemployed. When the person at the top looks like they’re in trouble, it’s best to be prepared for the inevitable scramble afterwards. Research the incoming CEO, make sure you sit down face to face quickly, and make a strong case. 

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