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Notes From a CEO Crib Sheet: Knowing When to Change Direction

CEOs have many responsibilities. One of them is to analyse, consider and then set a clear direction for the whole company. Where he or she leads, others will follow. Depending on the direction chosen, the company will develop certain products, approach different markets, and hire specific people.

The problem is that the world is always changing and sticking to one path isn’t always the best thing to do. Conversely, constantly changing direction will cause more than corporate travel sickness. It will be so inefficient and the CEO will lose so much credibility, that it’s simply not tenable.

So, what does the CEO do when concerned about the company’s current direction?

1. Face facts

The only starting point is to understand the reality of the situation. There’s no point continuing on the same path through stubbornness, fear or optimism. This is the time to gather as much evidence and as many facts as possible.

Once gathered, the temptation is to make the facts fit a desired outcome. However, an analytical approach serves best. It’s often useful to include some trusted and skilled individuals in this endeavor, encouraging them to speak freely (even if it contradicts the status quo!).

2. Explore alternatives

If, after an objective analysis, you, as CEO, believe a change is required, you need to restrain yourself from a knee-jerk reaction. At this point, it’s time to explore the alternatives, however outlandish they may seem at first.

These can include anything from waiting for a short while to see if things change again (as they can do), to a gentle nudge on the tiller, to a dramatic and wholesale change programme.

It will feel like time is of the essence, and certainly this process does have time limits, but it’s important not to rush. It’s critical to be as considered as when you set the original strategy and direction.

Which way?

3. Change direction

Having deliberated, explored and tested different options (on trusted colleagues), it’s now time to change direction. As with the original plan, you need to establish, and communicate:

  • why the change is needed
  • what the change is
  • how the change will happen
  • what the milestones are
  • what this means to the company
  • what it means to individuals
  • why you have confidence in this new plan.

Even more than with the original plan, people may feel anything from relieved (because they saw the original plan wasn’t working) to nervous (of change) to fear (for their jobs and the well-being of the company). This means that the CEO will need to invest significant time and effort explaining and re-assuring individuals as well as groups.

What’s more, it’s not just internally that the CEO needs to explain and re-assure. Shareholders, customers and suppliers will all be eager to establish whether the CEO and the new plan are credible and worthy of their continued support.

If all of this sounds daunting, you should re-assure yourself that the alternative of sticking to a poor plan will be even worse. There’s more than one route to success, and the best CEOs are adept navigators of the ever-changing economic waters.

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