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Bill Allen February 3 2021 11 min read

How Risky is Your New CEO Job?

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You’ve just been offered the CEO job at a multinational corporation and it looks like a great opportunity. The position plays to your strengths, expands your network of influence internationally, and advances your long-term career plans. But are you ready and willing to face the risks inherent in the design of this particular role?

Unless you assess these role risks, you can’t really know whether what you’re stepping into is truly a positive life-changing opportunity or a career-killing move.

No CEO job is without risk. Usually one risk, by itself, can be mitigated. But in some situations, one risk alone can sink you. In most cases, you will be looking at a combination of risks and exogenous events that can make it extremely challenging, if not nearly impossible, to achieve your goals.

Time after time, I’ve seen such a risk assessment quickly change people’s mind about how “great” a job offer actually is. In fact, I can’t think of a single instance when it wouldn’t be worthwhile to identify what these risks are up front and evaluate how substantially they will impact your ability to deliver what is expected of you in the role.

To shine a light on the different types of role risk, let’s look at a leadership position that is highly visible in the news right now.

The U.S. President's Many Jobs

The role of the President of the United States (POTUS) actually covers multiple specific Jobs To Be DoneTM, each associated with a recognized organization, a set of expected outcomes, and distinct operating systems. As chief of state and chief executive, the President must head the country and the government respectively. "He/she must also act as chief diplomat in charge of foreign policy, commander in chief of the military, and chief legislator with veto powers over bills approved by Congress and the Senate that can shape public policy. Not only do they operate as the chief of the political party that rules the executive branch of the federal government, but they are also the chief administrator of that same branch.

The financial compensation for the copious amount of work associated with these multiple role responsibilities includes: a taxable US$400,000 salary, along with a non-taxable $50,000 expense account, a $100,00 travel account, a $19,000 entertainment allowance, health insurance, and a post-presidency pension. Non-financial benefits include access to: security, a country home, a helicopter, and a personal plane.1 This unique job comes with only a few explicit requirements. The individual must be a natural-born U.S. citizen, at least 35 years old, and have lived in the country for 14 years.

Risks in the Presidential Role

Let’s now look at the risks inherent in the design of America’s presidential role. Think of this as the challenges that come with the job, no matter what the circumstances may be on inauguration day.

First, the role’s authority is limited by the Constitution.

The Constitution declares that the three branches of government—the executive, judicial, and legislative—operate independently of each other. The nation’s founding fathers believed that, in separating powers this way, no one aspect of government could rule the others. The legislative branch, responsible for public policy, rules through Congress. The judicial branch, responsible for interpreting laws, rules through a system of federal courts (district, appeals, and Supreme).

The executive branch, which the president heads, only has limited authority. The presidential role can issue executive orders, appoint Article III judges, designate members of the executive branch, and take regulatory actions through its administration. It cannot create or interpret laws. It cannot alter the Constitution. It cannot tell the other two branches what to do. In fact, the president is bound by oath to implement and enforce the Constitution and the laws of the land.

Second, there will be huge resistance from all sides.

The opposition party, hungry for victory, will fiercely resist the incumbent party. (They are, after all, the “opposition”). They may try to stop judicial or executive branch appointments, the latter which have to be confirmed by the Senate under its under “advice and consent” powers.

The effect of this opposition can often be seen in mid-term elections, when the president’s party historically loses seats in the House of Representatives or the Senate. Either the incumbent party has not been able to fulfill the demands of their base and/or the opposition has motivated more people to turn out to vote. For the rest of the president’s four-year term, the opposition party will continue their efforts to make sure the president does not get re-elected.

Third, there will always be more demands than the president and their team will have the capacity to meet in four years.

Anyone stepping into the presidential role will have only four years—the length of one term in office—to put a team together and get things done. This, in itself, represents a huge stretch for almost any leader. Demands from constituents will always exceed the time and energy available. Resistance will limit what can actually be accomplished. Exogenous events—from acts of terrorism such as 9/11 to natural disasters like Hurricane Katrina and the COVID-19 pandemic—can also do serious damage.

Two “superpowers” would help any president of the United States address risk in the areas of authority, resistance, and capacity.

  1. An incredible facility with communicating clearly in a way that creates confidence in America, both among the nation’s people and its allies. This includes being a master of influence who is sensitive to the repercussions and potential resistance that will follow any choice they make. FDR, with his Fireside Chats, and Reagan, with his reputation as the “Great Communicator”, offer masterful examples of this.
  2. The capability to design a simple, compelling agenda and pull people together to realize it. Critical among those people will be the president’s chief of staff, the individual who must effectively act as a “gatekeeper”, deciding who will see the POTUS and negotiating with Congress to push the presidential agenda. Reagan’s chief of staff, James A. Baker, III, is widely seen as a role model here for his ability to get things done on behalf of the president.

So what does all this mean to you in your new job as a CEO?

This is not the time to be flying blind. People will be coming to you with their diverse agendas, just like they come to the U.S. President. Everyone will be expecting you as CEO to move the organization forward, aligned and performing at a very high level, just like they expect the President to move the nation forward.

You must understand the risks inherent in the role that you now occupy. And you must be aware of the potential for these risks to derail you and your organization.

Do you have the authority you need to deliver the outcomes the board expects of you? Is your organization fully aligned and, more importantly, is your board fully aligned? Do you and your team have the focus, the talent, and the energy to overcome the capacity constraints that exist in your organization?

If you can answer all three questions with an emphatic “yes”, congratulations! Your CEO role is not particularly risky. If cannot answer all three in the affirmative, feel free to reach out to me for a conversation about how to precisely pinpoint and effectively mitigate your role risks.


NOTES

1 Allana Akhtar and Madison Hoff, “19 financial perks of being the president of the United States”, Business Insider, November 6, 2020. Accessed December 10, 2020.

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Bill Allen

Bill Allen, Senior Partner with CEO.works, has spent 20 years in CHRO roles with three listed companies (AP Moller-Maersk, Macy’s Inc., Atlas Air Holdings). This fellow of the National Academy of Human Resources has lived nearly one third of his career outside the United States and counts his corporate “hometown” as PepsiCo.

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