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The path to the ‘corner office’ is different for every executive. Some are hired into companies to become chief executive, while others (although this is becoming more rare) move their way up to the Big Job through the divisions. 

Despite the roles sharing an acronym, they are very different - although the Group CEO role is often seen as the next logical step, the move can be a significant transition. We asked a group of existing and former CEOs for their stories and advice about making the move

Kevin Appleton, who became Group CEO at Lavendon Group plc after seven years in a couple of divisional CEO/MD positions, started with this advice: “Be very clear on why you want to make the transition. Some people make excellent Divisional CEOs, and are inspiring, rare and tremendously valuable business leaders in that role. Sometimes the move to Group CEO means people leave behind the stuff that they love and excel at. Don’t seek to make the jump just because you feel it’s the ‘next logical career step’, because it absolutely needn’t be.”

Remember that Divisional CEOs are more focused on day-to-day operations, whereas the Group CEO looks after the strategy and direction of the entire organisation. “The (Group) CEO’s actions and behaviours cast a very long shadow both externally and internally. This is something that is very different to running a division. It is the CEO that sets the tone for the organisation and employees, the board and all other stakeholders take their lead,” says Andrew Taylor, CEO of Intec plc, who held a complex divisional role for a number of years before moving to Intec to take up his current role.

Bearing this in mind, before you look to step into the top spot, it is critical that you gain sufficient exposure to, and understanding of ‘Group’. Andrew Dougal, who moved from Divisional CEO to Group Finance Director and then to Group CEO at Hanson plc, points out that it was much easier to move from a group function such as FD to Group CEO than from Divisional to Group CEO. “Divisional to Group can be quite a jump. I recommend having involvement in the Group team, or getting a mentor in the Group team, before attempting to make such a leap.”

Finance, the City and the Board

The clearest difference between the two roles is that, once you become Group CEO, you are accountable to the City, various stakeholder groups, and, of course, the board. The new magnitude and complexity of decisions can thus be daunting. Kevin agrees, “Accommodating the added requirement of the corporate finance element of strategic development and management, normally a ‘given’ at divisional level, is a challenge. Also, if you do decide to make the jump, ensure you get as much exposure as possible to shareholder relations and everything that goes around the ‘management of the City’ side of business. At Lavendon Group, we ensure that senior divisional executives are exposed to analyst presentations, major shareholder meetings and strategic planning events, so that their ultimate transition to the main board level will be that much easier,” said Kevin.

Joe Darby, now Non-executive Director at Premier Oil plc adds: “At Group level, I had to obtain a better understanding of how the market works, the role of buy-side and sell-side analysts, brokers, financial advisors, investor relations advisors and, indeed, the shareholders and what their requirements were from a company in which they had invested. Of course, there is a greater focus on share price and what drives the share price up and down.”

Naturally, the Group CEO also spends far more time with the Board than his/her Divisional counterparts. “At Group level, you spend far more time on board matters (than in your Divisional role), dealing with broader issues and establishing relationships with non-executive board members,” says Joe who, earlier in his career, moved from Executive Chairman of Lasmo North Sea to Director of Operations of Lasmo plc and then ultimately to the Group Chief Executive position.

Managing your former peers

If promoted through an organisation, as Group CEO, you will be managing those who were once your peers, as well as individuals who may also have been vying for the CEO position themselves. This should not be regarded as a problem. Although not easy, the key to success here are the relationships you had with your peers before taking the position. “Once in the new role, you need to spend time with your previous peers, getting them to understand how you would like to see things operate going forward and, more importantly, listening to them. Get their concerns and issues out on the table as quickly as possible,” says Geraint Anderson, CEO of TT electronics plc.

Joe admits that this was a challenge, “That was not easy, but I did have a lot of support through the good relationships that I had built up during my time with the company up to that point. Remember though that, whilst they may have been your peers before, now they are your staff – and you must be able to command their professional respect. You will only get this though if you listen to them and ensure that they know that they continue to be valued - ask them for their support, show them that you care, and praise them when it is warranted.”

Advice

The group provided a list of the skills they believe are needed to be a Group CEO:
  • Leadership – how to create a vision for a company that others can understand and aspire to
  • Board governance and process
  • City communications and the importance of having a balanced and well thought through plan that can be referred to
  • You need to be all things to all people so you need to be ruthless with how you allocate your time
  • How to deal with the media and promote the company
  • Values and principles - be very clear about what you expect from people (trust, transparency and honesty)
  • The ability to build a team with appropriate skills and knowledge to take the Group to the next stage – strategy through implementation

We asked our contributors to put together their advice to those looking to make the move to the Group CEO role:
  • Build broad functional experience but also be a specialist in a particular domain
  • Be a good team builder - command respect and demonstrate strong leadership at all levels of the organisation
  • Have a clear vision for the company that staff and investors understand and believe in
  • Have the self-confidence that you can make a difference and the changes necessary to achieve the vision
  • Think strategically, be decisive and have excellent communication skills
  • As a plc CEO, do not underestimate what is required in terms of time, approach and preparation when dealing with the City. “You can only learn this on the job but once you do something once (eg, M&A transaction periods) you will tick the box and move on to the next learning,” says Andrew Taylor

Andrew continues with a final piece advice to those looking to make the change. “Although attractive, do not be driven by the financial rewards of being a public company CEO. Once you start the job, your priorities will change very quickly and, frankly, the most important aspect for you personally will be reputation and ensuring that you do the right thing for shareholders, customers, the board and employees alike.”

Please get in touch if you have any comments about the issues raised here.

I hope to see you soon,

Matthew
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