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What Politics Can Teach Us About CEO Transitions

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A little less than two months from now, President Obama will begin his second term. As he launches his new administration, he and the federal government will be contending with a complex transition that brings several new elected officials to Washington. For President Obama to be successful, he will need to reposition his team and reach across the aisle to make an unimaginable array of complex decisions -- and fast.

The benchmark for all political transitions was originally established in 1933, when the newly-elected President Roosevelt had an extraordinarily productive first 100 days in office. Working with a Congress, he was able to enact a series of legislative acts that dramatically expanded the power of the federal government to combat the ills of the Great Depression.

It should be remembered that President Roosevelt took office almost 80 years ago and our view of this transition timeframe has substantially compressed, for governments and corporations alike. With a dramatically increased news flow, a global social network creating an ocean of commentary, and 100-day leaping-off period becoming a 20th century antiquity, Presidents and CEOs needs to be prepared on Day 1 to speak to their vision, mission and demonstrate why they are the right person for the job.

These transitional periods can be tremendously exciting, clarifying and productive if done well, and confusing, dispiriting and chaotic if handled poorly. Because of our unique experience, we have had an opportunity to contribute to both private and public sector transitions and these experiences have provided us with a series of lessons that should help guide every new CEO in his or her first months:

First, transitions should be guided by careful planning, research and initial strategy development.

In every campaign, a small group is given the responsibility for figuring out what happens if the candidate actually wins. Much time is focused on drafting new policies, filling positions and developing a comprehensive communications strategy that can be implemented once the Administration takes over. If done well, this kind of planning can pay huge dividends for the rest of the term.

The same holds true for the new CEO, who should think about the transition phase as an essential vehicle for achieving a company's critical goals. There should be a full analysis of the company's communications landscape, with a particular emphasis on key audiences and stakeholders such as its employees, passed over candidates, analysts, competitors, media, business partners and customers. An effort should also be made to measure the overall market reactions to the successor and related positioning before launching a new iteration of the company's narrative - which should incorporate the new CEO's corporate strategy and vision. This will effectively launch the CEO as a leader in the industry and assure stakeholders that the board of directors selected a corporate leader who will protect the company's interests.

One particularly useful example of good communication around a CEO transition is IBM. When IBM's board announced that CEO Sam Palisano would be stepping down, there was well-developed messaging emphasizing new CEO, Ginni Rometty's considerable strengths. The content focused on how she was a well-known, long-time IBM executive who had helped lead IBM's evolution into the services business. Clear, well executed communication around leadership change made the transition appear seamless.

Second, transitions must be guided by a central mission or rationale.

Transitions must have a declared purpose that everyone understands. For campaigns, this is relatively straight forward since candidates talk a lot about what they intend to do. New CEOs, looking to this political example, should place a major emphasis on making his or her intentions clear. This will instill confidence and optimism and prevent the inevitable anxiety and unease from turning into chaos and paralysis.

In presidential politics, the Acceptance Speech and Inaugural Address are used to make major declarations about goal and purpose. CEOs usually do not have such a prominent opportunity to lay out their thoughts, but there should still be a determined focus on developing a narrative. Major town hall meetings and State of the Company gatherings can help set priorities and identify opportunities.

These events can be used to ensure all corporate communicators and executives are using similar language and tone when speaking with all target stakeholders, further ensuring that every level of the organization understands the "WHY of decision-making. This will create greater clarity when having to make difficult decisions or pursuing major initiatives.

Third, transition first impressions really count.

Everyone will closely watch what the new CEO initially says and does, and will pay very close attention to the many cues that he or she will inevitably send out. In the first few hours and days, the symbolism and message of initial activities will become critically important.

This is why President Obama on his first full day signed an executive order freezing White House salaries over $100,000, met with his economic advisors and made his first foreign phone calls to leaders of the Middle East. Each act signified a desire to foreshadow what he really wanted to accomplish.

Fourth, transitions are hard and the challenges ahead must be clearly explained.

Managing expectations is critically important. American society is not very patient, especially these days. It must be explicitly acknowledged that we live in a period when the unexpected and the unimaginable will almost certainly happen. As we manage dramatic technological, political, social and economic change and institutions, we must develop the ability to adapt, persevere and innovate constantly. Tumultuous disruption will become the new normal and leadership and staff must adapt to the new conditions.

When a new CEO takes over, it should be explained why the road ahead will be confusing and bumpy, and that adjustment is always hard. Since there will be new thinking and new methodologies to embrace combined with the elusive vagaries of this era, there is a heightened need for honest and realistic conversation about what is actually at stake. This will help generate much needed goodwill during the inevitable upcoming difficult times.

Fifth, transitions require an effective mechanism for ongoing internal communication.

People want a very personal sense of what a leader wants to do. In Robert Caro's recent book, he talks a lot about how President Johnson would use his people skills to achieve landmark legislation. A few decades later, personal interaction is more important than ever, as we live in an era where there is a fair amount of cynicism and skepticism and the separation between our leaders and everyone else has become far more pronounced. It is, therefore, essential for senior executives to ensure that they are seen, heard and understood. Effective vertical communication is more important than ever.

Similar to when First Lady Hillary Clinton was running to represent New York in the U.S. Senate, the new CEO should engage in an extensive "listening tour" during which he or she speaks with key stakeholders (e.g. shareholders, analysts, media, employees, vendors, customers, etc.) across the company's geographical network to identify positive attributes to the company's business, as well as potential unmet needs. This practice both allows for new information to be gathered, but also helps enroll stakeholders in the going forward programs.

All in all, transitions are extraordinarily exciting periods that offer great promises of exciting times to come. Taken together, these five lessons should help CEOs deal with the inevitable twist and turns, avoid the potential, easy-to- set off land mines and make the most of these critical periods. Transitions almost inevitably will turn into steep roller coaster rides, but with thoughtful and forthright management, they can be turned into productive experiences for everyone involved.