Seven Surprises for New CEOs
(Michael Porter)

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Explanation of Seven Surprises for new CEOs of Michael Porter, Jay Lorsch, Nitin Nohria. ('04)


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The Seven Surprises for New CEOs were described for the first time in the HBR of October 2004 in an article regarding CEO Leadership by Michael Porter, Jay Lorsch and Nitin Nohria.

As a newly appointed CEO, one may think to finally have the power to set strategy. The authority to make things happen, and full access to the finer points of your business. But if you expect that this job is so simple, you'd better wake up now. You bear full responsibility for your company's well-being. But you are a few steps away from many important business factors. You have more power than anybody in the corporation, but you need to use it with extreme caution.

Porter, Lorsch and Nohria have discovered that nothing - not even leading a large business within the company - fully prepares a person to be the chief executive.

The seven most common SURPRISES for new CEOs:

  1. You can't run the company. The sheer volume and intensity of external demands take many by surprise. Almost every new chief executive struggles to manage the time drain of attending to shareholders, analysts, board members, industry groups, politicians, and other constituencies.
  2. Giving orders is very costly. No proposal should reach the CEO for final approval, unless he can ratify it with enthusiasm. Before then, everyone working on the matter should have raised and resolved any potential deal breakers. The CEO should be brought into the discussion only at strategically significant moments to give feedback and support.
  3. It is hard to know what is really going on. Certainly, CEOs are flooded with information, but reliable information is surprisingly scarce. All information coming to the top of the enterprise is filtered, sometimes with good intentions, sometimes with not such good intentions.
  4. You are always sending a message. The words and actions of a CEO, however small or said casually, are instantly spread and amplified, scrutinized, interpreted and sometimes drastically misinterpreted. Compare: Charismatic Leadership
  5. You are not the boss. Although the CEO may sit on the top of the management hierarchy, he still reports to the board of directors. Ultimately, the board is in charge. Not the CEO.
  6. Pleasing shareholders is not the goal. CEOs must recognize that, ultimately, it is only long-term value creation that is important. Today's growth expectations or even the stock price are not so relevant. Compare: Moral Purpose
  7. You are still only human. CEO should recognize that he needs connections to the world outside his organization, at home and in the community. In order to avoid that he is completely consumed by his corporate life.

These Seven Surprises for new CEOs carry some important lessons:

  • First, as a new CEO you must learn to manage organizational context rather than focus on daily operations.
  • Second, you must recognize that your position does not confer the right to lead, nor your position guarantees the loyalty of the organization.
  • Finally, you must remember that you are subject to a range of limitations, even though others might treat you as if you were omnipotent.

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Disagreements in the organization don't help much to choose the right way.
  CEO is a Facilitator and Needs Followers
A new CEO must share his/her vision to the organization in order to attract followers. In the whole process, the CEO must also be ready to be led by the followers.
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  Alternate Meanings of CEO: Chief Excitement Officer
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2. Confidentiality on certain issues makes him lonelier still
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  Even CEOs Need Support from their Team
CEOs need to know that the team they are leading is very important if they want be successful.
The support from the team is crucial and one goal should be to win that support. It is easy and also hard at the same time....
  On #7: Even a CEO is Still Only Human
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  Even CEOs Need Time to Learn...
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This comes with an unconscious...
  On #6: Shareholder Pleasing is not the Goal
Well I think Porter is missing an important point when he says pleasing shareholders is not a goal. I am not a professor on a university but my school is 30 years practice in multinationals. If a CEO is going for other goals then the goals from the s...
  Don't underestimate the emotional and positional power a CEO has
The emotional and positional power a CEO exercises is drastically underestimated by new CEOs. Serious attention to words and potential meanings, physical interactions and worst possible presumptions on body language and purpose, and methodology and c...
  Surprises to a CEO: You Need to Deal with Undercurrents
As a ship sails along the sea, there are undercurrents that tend to limit speed and change direction. The captain of the ship (CEO) has to have knowledge, plans and strategies to undercut these counter tendencies for the ship to sail smoothly....
  CEO: the Strategist of Business
Despite of surprising himself with a lot of challenges, the CEO will be accountable for an effective strategy applied with agility and intelligence to the business.
That means... he is the commander in chief responsible for the success or failur...
  On #3: It's Hard to Know what is Really Going On
What are the most effective ways for a CEO to determine if the information she/he is getting is accurate?...
  Assimilating the Right Type of Information
A CEO is usually flooded with information which can become confusing. What the CEO ought to do is to place all relevant information on the yardstick of the wider vision of the company.
Once the vision remains unwavering then the right in...
  Combine Top Down with Bottom Up Thinking
I guess sometimes man must change his view to the company; not always looking and thinking from the top down, but sometimes explore a bottom up approach
  Being a Chief Executive Officer (CEO) is Easy
The CEO can choose between authority or knowledge. Trusting the team is a key for success. A CEO should focus only on strategic things and delegate other functions to subordinates. A CEO can create the feeling of ownership among all through tr...
  Undercutting CEO Power
In Fortune (Europe, March 12, 2007, no. 4) Geoff Colvin mentions some new rules that decrease the authority of existing (US) CEOs in favor of the shareholders: 1. From 1993, institutional shareholders may discuss companies in which they hold shares w...

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Seven Surprises Porter


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Seven Surprises Porter


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