‘Adopt an Outsider’s View’ and Other Tips for Transitioning CEOs

Not all chief executives will be exceptional. What separates the top performers from the rest of the pack? A new study by McKinsey & Co. offers three lessons to help transitioning CEOs become exceptional leaders.

• Adopting an outsider’s point of view can give CEOs the needed objectivity to challenge their company’s culture and overcome organizational inertia. CEOs who are hired externally tend to pull more strategic levers than those who come from within and outperform their internal counterparts over tenure.

• Exceptional CEOs are significantly (about 60 percent) more likely to conduct a strategic review in their first two years on the job versus the average CEO, helping them gain a clear perspective for action. Informed by this view of the company’s past performance—and the potential for the future—these CEOs are emboldened to make more strategic moves in their first year. As changing strategic direction typically requires freeing up resources, exceptional CEOs are also more likely to launch cost-reduction initiatives early in their tenure.

• However, exceptional CEOs are less likely than the average CEO to undertake organizational redesign or management-team reshuffles in the first two years in office. They understand that a grounding in the organization’s context is needed to calibrate the speed and scope of change: high-performing companies can be hurt by management reshuffles, and too many changes in too short a time can be overwhelming.

See the full McKinsey article: “What makes a CEO ‘exceptional’?“