The CEO transition is a tough one. New CEOs especially face a steep learning curve. There are many things I wish I had known going into my first CEO job.
Together with input from two experienced CEOs – Seth Birnbaum, the CEO and co-founder of EverQuote, and Phil Friedman, the founder, president and CEO of Computer Generated Solutions (CGS) – I’ve put together six tips for anyone transitioning to the CEO role.
CEO Transition #1: Understand the job responsibilities
The CEO job is unique. There are five responsibilities of the CEO role that rest solely on the chief executive’s shoulders. Entrepreneurs who know the duties of the position will understand where to spend their time and how to be most effective.
CEO Transition #2: Realize you won’t be prepared on day one
Because of the role’s uniqueness, very few are ready for it, making the CEO transition that much harder. Most people have risen to the top job because they had a stellar career in another area, such as sales, marketing, R&D, etc. Once they get to the CEO chair, they are bombarded with issues they’ve never had to confront.
“When I initially became a CEO, I felt a lot of internal pressure to know how to be a CEO out of the box,” said EverQuote CEO Birnbaum. “I think what I’m learning, especially as we scale and grow, is that you shouldn’t feel like there’s an expectation that you are going to know how to be a CEO on day one. It requires a ton of learning.”
What kind of learning? I’ve narrowed it down to 15 essential CEO skills, but anyone making the CEO transition should have a wide base of knowledge.
CEO Transition #3: Cultivate a diverse educational background
While no one can be fully prepared for the CEO transition, there are many areas that candidates should study and be proficient in before taking on the role. These include fields such as emotional intelligence, game theory, communications, history, and organizational development.
Friedman of CGS had this advice: “In today’s world, the role of CEO is very demanding. You are required to start with a base of knowledge. I don’t believe anyone is born to run a company. You have to have a good understanding of such things as the law (labor law in particular), finance, accounting, and technology.”
CEO Transition #4: Resist the temptation to micromanage
Many new CEOs get caught up in the power of the top job – or perhaps simply not knowing what to do – and start trying to micromanage everyone’s time. Others fall into the trap of trying to put out every fire personally. Fulfilling the true responsibilities of the CEO job from the start will help avoid the tendency to micromanage.
Friedman put it this way: “When I started CGS in 1983, we had five employees. Like any entrepreneur initially you think that you can do everything yourself, such as sales, delivery, quality control, HR, legal. It takes some time to realize as the business is growing that you cannot. So if there is one thing that an entrepreneur or businessperson needs to realize, it’s to start delegating and surrounding himself or herself with a lot of smart people.”
CEO Transition #5: Realize it’s all about people
When I first started out as a CEO, I thought I could solve every business problem logically using my engineering background. I soon learned the error of my management ways during my CEO transition: It’s all about your people.
Engineer-turned-CEO Birnbaum said, “It’s shocking how much management of people and personality matters in terms of results and output. From an engineering role we tend to approach everything by asking what the problem is and coming up with a solution in terms of bits and bytes and force pounds per square inch. It was very novel to me that this had nothing to do with success. It was all about the people.”
Friedman agreed, “The most important element for a CEO is having the skill to interact and manage people, especially in a larger company.”
CEO Transition #6: Ask for advice
One trait of the best CEOs is humility. Humble CEOs don’t believe they have to be the smartest person in every room. They aren’t afraid to ask for feedback and advice.
“It took me awhile to get comfortable with the notion that you can reach out to the cast of people around you and work with them to learn to be a better CEO and manager,” said Birnbaum. “There are a lot of people around you who want you to succeed. If you reach out to them for help vs. approaching them like ‘I know what I’m doing,’ they’ll give you more help than you have any right to expect.”
One thing is certain: “The learning never stops,” as Friedman said. Great CEOs have a zest for learning, which is a necessity in today’s world. He summed it up well:
“There is no one single thing you have to do. You have to be well-rounded and keep up with things like the latest in technology. Things change very dramatically, very quickly. It takes time to be proficient at the CEO role.”
Follow these six recommendations for an effective CEO transition. Thanks to Seth and Phil for sharing their experiences and great advice. For additional insights on the CEO role, be sure to read my interviews with them if you haven’t already:
Seth Q&A: https://theamericance1.wpenginepowered.com/2017/07/26/ceo-interview-seth-birnbaum-everquote/
This post is based on an article I published on Entrepreneur.com on October 4, 2017.