VIEWPOINT:  No career move is more profound than the step up to CEO. Tata Consultancy Services’ Himanushu Saxena and Tuck Executive Education at Dartmouth’s Prof Vijay Govindarajan reveal 10 key dilemmas that the new CEO needs to take account of, to hit the road running:

Finally the day arrived, when Peter was appointed as the CEO of the multinational technology giant. After months of speculation, apprehension and expectation; all came to a logical conclusion and everyone sighed with relief. Stakeholders were satisfied, the board were confident of having made the right choice, and the outgoing CEO felt that he was leaving the company in safe hands. When a week long ceremony and celebrations were over, Peter got some reflective moments to himself. That night, he could not sleep. He wondered, ‘what next’? Where does he go now, from here onward? Who to look up to, where to escalate and where does the buck stop now? Unfortunately, the buck now stops with him. Peter knew that from now onwards, everybody including customers, stakeholders, employees, the market and board will look to him for  direction; looking for those ‘Pearls of Wisdom’ that he had been craving to apply or holding on to reveal now that he had reached this stage.

This a usual scenario in most companies, where succession has happened or is likely to happen in the near future. CEOs are always in the ‘Hot Seat’, irrespective of whether their businesses are struggling due to competition, context or capability; or doing exceptionally but where the continual drive for aspirational growth continues. They have to deal with a number of predicaments that put a strain on their time, energy and decision making. Either way, here are 10 top dilemmas new CEOs will do well to know in advance and brace their organizations to deal with effectively:

1. Finding the New Vector – Each leadership transition/succession is marked as a period of metamorphosis. New CEOs have to decide on their strategic direction: which markets to focus on, what technologies to adopt; as well as the tactical ones: where is the leadership shuffle required and what new regulation challenges to deal with; in addition to shareholder expectations. Identifying the primary source of competitive advantage also consume a significant amount of CEO’s time, stretching the decision-making to the hilt. Time and again, it has been proven that a deep sense of customer centricity combined with new capabilities give wings to the new growth vector.
2.  Core versus White Space Capitalization – Sticking to the core or venturing away from it, in pursuit of new growth opportunities is a major dilemma CEOs often face. This requires ‘Strategic Intuition’, taking that judgment call, where all the perspectives naturally render themselves into a coherent decision. In today’s world, the core must constantly evolve by capitalizing the white spaces.
3.  the Next Big Picture or Scaling the Existing One – One of the most obvious expectations of the board and stakeholders from the new CEO is clarity on whether the current ‘big picture’ will be manifested or a new one will be conjured. Where will the next big idea come from and whether the CEO will have the agility and resolve to bet on it?  CEOs need to structurally organize their companies where the systems and process take care of scaling the current picture and the key enterprise decision-makers spend a significant amount of time in finding the next big picture.
4.  Dealing with a New Pecking Order – In one step, a new CEO alters the pecking order in the organization. He has probably superseded a few of his seniors and has gone ahead of his peers, leading to change in the power dynamics. How to get people to align with thebroader strategic agendas, which may or may not be at variance with others, is a major challenge CEOs have to deal with. What will come in handy here is not their knowledge or intellect but the art of building federations through influencing, iterating and interacting, in a meaningful manner. It is about giving respect at altogether different level, before seeking to earn the respect of various stakeholders.
5.  Building Shared Agendas – In the run up to CEO’s position, especially internally, most leaders develop tremendous familiarity with their peers, direct reports and superiors. This may subconsciously lead them to take each other for granted. Although critical, this doesn’t impact the working relationship as severely, as it does post-succession where, the power dynamics has changed. As a result, thecollaboration takes the hit. Ensuring that there is adequate listening and understanding on both sides is a major challenge. Curbing personal agendas and promoting the shared agenda is what CEOs need to learn and practice.
6.  Being the Face of Organization – Stakeholders want to know, hear and see the face with whom the buck stops now. Many CEOs, who probably have not had the exposure to face the global media, find themselves in an unfamiliar groove and often end up struggling with their messaging both internally as well as externally. From a situation, where his connects and conversations had topical implications, he has now moved into a role wherein he is always sending out a message, even when he is not. This is an unprecedented situation and often there is not enough grooming on this. Unfortunately divorcing or delegating this responsibility does not help. Effective grooming on this aspect must begin well before someone comes into the reckoning for being the next CEO.
7.  Shifting the Growth Curve: Incremental Moves versus Bold Forays – The very growth curve of which the CEO was part of (in case of an organic succession), needs to shift now, few notches up. This is to mark the arrival of the new CEO. Shifting the growth orbit is the most natural aspiration from a new CEO. And this could put his imagination to the test, as to where to direct his ship in search of new growth horizons.
8.  Reimagining the Interplay – Usually the resources of an organization does not change overnight. Resources of all kinds will remain constant initially. It will take some time for him to reinvent the management systems for creating new resources and capabilities. But the marshaling of resources can change from day one or soon after he has firmed in his new ‘Avataar’.  This is not easy. Seeking and searching a new interplay among already existing resources and capabilities requires reframing the outlook or altering the prism. This is about connecting and reconnecting the dots in an altogether different way.
9.  Leading Disruption – Overtime, organizations mature in workflows – decision, process and interactions leading to stability. Long term stability leads to slack in the organization, which creates immunity for change. One of the toughest jobs of CEOs is to identify andgalvanize slack-discovery and drive disruption, before the competition or an unknown player disrupts. It is about dropping the long-standing perspectives and practices and acquiring new ones by virtue of altering the cause and effect linkages.
10.  Create a New Legacy or Build on the Heritage – This is more pertinent for a CEO, who has come from outside to fix things in a turn-around scenario. If he disturbs the legacy too much, people are likely to blame him for showing disdain to the past and if he sticks with it, he will be questioned for being too conservative. What will serve him well is his ability strike a balance between timeless and timely.

Finding business coherence amidst the randomness of internal and external events is a perpetual dilemma for the CEOs.  A lot will depend upon, how he marshals his resources in new and innovative ways to discover that elusive growth orbit for which he has been appointed as the CEO. Discovering new ways of value creation and building conviction around them will help him deal with above predicaments, effectively. Each and every dilemma must be dealt with a filter of Staying Relevant – Proactive Disruption and Building case for Strategic Change. Finally, not everyone will understand the path undertaken by CEO but as long as these paths enable him and the company ‘Stay Relevant’ to its customers, they must be pursued with conviction.

Illustration: King Arthur. Fresco (detail) in the Corridor, Trinci Palace, Foligno, Italy

Further Information

Himanshu Saxena is a thinker, writer and speaker on concepts such as Big Picture, Reimagination, Strategy & Innovation and Leadership@Top Level. He is currently enabling TCS BPS in aligning strategy, coaching and developing leaders of tomorrow.

Vijay Govindarajan is the Coxe Distinguished Professor at the Tuck School at Dartmouth and the author of NYT and WSJ Best Seller, Reverse Innovation.

Tuck Executive Education at Dartmouth