New CEO? 6 Easy Steps to Get Started

Getting started as a CEO requires you to prioritize. Follow these simple steps to get great results.

Starting a new CEO assignment? This article will show you 6 Easy Steps that you can implement immediately.

Once of the first CEO realities is figuring out where to start. It may be your first day on the job, or you may be years into it, but every new day presents an opportunity for a new direction, for good or bad. Figuring out where to focus your energy, and that of your team, is your top priority.

Step 1: Theory of the Case

A quick triage of the situation can help you get started. What do you know? What don’t you know? You need some information, not every detail, but something that will help you get oriented so that you can prioritize your first steps. If you are new to the business, somebody (Board member, owner, etc.) gave you some description of the situation. You should have also seen a set of financials (P&L, Balance Sheet, etc.) and had some orientation to the business such as markets, customers, products and services. Start with this information a form a trial “theory of the case”, this hypothesis will serve to anchor and orient your thinking as you move forward. However, do not get too attached to your theory because it is likely wrong to some extent. The process will improve and shift your thinking as you move forward.

Step 2: Verify

I made the mistake (multiple times I am afraid to admit) of charging forward to gather more and more information about a business without any consideration of the quality of the information that I was receiving. It is essential at the very beginning to question the validity of data and information that you receive. You have heard the expression “trust but verify”; applying this same philosophy will serve you well in building a solid foundation.

Take for example financial statements, how do you know they are accurate? Who do you ask? How can you validate the data? I once operated a business for nearly a year just to find out that the inventory valuation process was broken (meaning the inventory was less than it appeared and the COGS was higher than reported); the consequence was a write-off that wiped out all of the profits for the year.

The verification process needs to be handled diplomatically, particularly if you are new to the organization. Questioning the status quo can easily be translated into distrust, the exact opposite of what you will eventually need from your team. Spend time explaining what you are trying to understand, be open about your lack of familiarity with the details. Your honesty will be appreciated and is likely to get you information that otherwise would be hidden from you.

Your interaction with your team will also begin to give you a view into the organization and discipline of the organization. Does the team show good execution skills?

Step 3: Collect

You will quickly realize that you need more information to formulate any plan of action. Think of the process like a jigsaw puzzle. You are not trying to complete the entire puzzle, but it can help if you find and assemble the edge pieces. Keep looking for information that either confirms disproves your hypothesis but be cautious of your natural bias towards your current theory. Remember, this process is about building a foundation, not about building the entire house.

Step 4: Assess

Look at the information that you have collected; what is it telling you? Are you on the right path? Is the information reliable enough to allow you to get started? Your priority is always going to be ensuring that the information you are using to guide you is reliable. Flying blind will almost always end with a bad outcome.

Step 5: Prioritize

While there are lots of ways to look at the problem, I like to think in terms of urgency. I believe the order of priority should be: (1) information, (2) cash, (3) execution capability, (4) team, (5) strategy.

INFORMATION – Information needs to be first, because if you cannot get good information any move you make is just as likely to make things worse, than better. Again, we are not talking about perfection, but you need some reliable data.

CASH – Your second priority is cash. If the information you’ve received is telling you that you are about to run out of cash, you must solve that problem first to buy time. Most business failures may have been initiated by bad execution or strategy, but it is running out of cash that kills the business. Get your cash situation under control.

EXECUTION – Once you have a foundation of reliable information (not perfection) and your cash situation gives you at least a year of runway, you can move on to execution. Execution will always matter more than the strength of the team and the business strategy. A weak team with good execution discipline will move you forward, and the process of team development takes time and patience. I love strategy, so I am always tempted to dive in to working on the strategic direction of the business right out of the gate. This is a BIG mistake. A business with weak execution discipline will inevitably stumble and the strategy will not become a reality.

TEAM – Proving that you have a solid execution system in place will be the first test of your team. If you can’t get them into the discipline of defining priorities, executing, and then holding themselves accountable, you will need to work on the team. You notice that I did not use the term people? Individuals are important, they need to be nurtured and developed; however, it is the dynamics and effectiveness of the team will be most critical at the beginning. Also, you will be amazed how much a high-performance team will improve the effectiveness of everyone.

The topics of teambuilding and the development of people are vast subjects on their own. We will get to them in later blogs.

STRATEGY – Strategy is your last priority. If you are focused on it at the beginning, you are highly likely to fail because you have not built the foundation to win. Be patient, I will be talking about strategy in detail in future blogs.

Step 6: Act

If you haven’t figured it out, getting your priorities right is critical to making a good first step. Also, if you are focusing on the people or strategy right out of the gate, I am willing to bet that you are missing something significant.

Cleaning up information or getting your cash situation in order are tedious (and stressful), but otherwise straightforward. They need to be sorted out quickly but be wary of getting distracted; you need to get these priorities right otherwise you risk losing control of the business.

Assuming you have quickly resolved the information and cash issues, you should be turning your sights on execution. Honestly, there are few businesses that do this well, but it has huge rewards. You will probably need to put more energy into this that you might expect, and it will take longer than you will like, but it is essential to set the stage for anything else you do.

Finally, the name of this last step says it all – ACT. Be decisive, take action, get things done. I will go into more detail on execution in subsequent blogs; it is probably one of the most overlooked disciplines in businesses today.

Summary

Running a business requires a process. Start by getting data that will tell you where you are. Make sure the data is good; find a way to verify the quality of the information. Know your current cash position and what you will need for the coming year. If you are going to run short, focus all your attention on resolving that problem. If you’ve got the cash under control, focus next on execution systems in the business. Don’t worry about anything else until your team has demonstrated disciplined execution. You can focus on the team and strategy once you have built a solid foundation of information, cash, and execution.

So, what do you think? Any suggestions based upon your experience? Comment below.