The CEO's 'first hundred days': companies need a more formal and open process to let the CEO pick his team. Boards can start by considering several proactive steps.

• Author: Carey, Dennis C.
• Position: Spencer Stuart/Governance Letter - Column

OVER THE PAST YEAR new CEOs have taken their seats at AT&T, Honeywell, IBM, Lucent Technologies, Kodak and several other global companies, and will soon be showing up for work at others. Some of these transitions are part of long-anticipated and well-planned successions. Others a result of a sale or sudden departure of the CEO. Regardless, the new CEOs face a daunting task: how to launch changes and put their imprint on the company in the midst of an uncertain economy.

If they want to succeed, the best thing new CEOs can do is to move quickly and put their own team in place in the first 100 days.

The "first hundred days" is a yardstick usually reserved for a new President in the White House. But it is exactly the type of timetable more CEOs need to follow. While Presidents traditionally use their first hundred days in office to select a new senior team, far too many newly elected corporate chief executives fritter away their honeymoon period without making any significant personnel changes at the top levels. The results are predictable and unhappy: Imagine George W. Bush trying to develop policy plans using Bill Clinton's cabinet.

So many falter

Personnel is policy, goes a favorite Washington saying. It is no less true in the private sector. Indeed, the reason so many companies falter after a new leader takes charge is usually due neither to flawed management nor leadership style but rather the inability or failure of a CEO to assemble his own senior team that can enthusiastically implement a new strategic direction. The fact that a new chief executive inherits a board someone else appointed doesn't make change any easier.

We have seen the scenario played out many times in recent years. Douglas Ivestor at Coca-Cola, Dirk Jager at Procter & Gamble, and Richard Thoman of Xerox all left months after they were installed as CEO, never building a team of their own or enjoying the support of the board or senior management.

By contrast, the most successful executives shake up management soon after they enter the CEO suite. Jack Welch did it in 1981 when he took the top spot at GE. The same pattern could be seen when Louis Gerstner took over IBM or Lawrence Bossidy took the top slot at Allied Signal.

Of course, not every CEO succession process demands a transformation. Many incoming CEOs are already company insiders and have spent a few years jointly shaping the next generation of leaders with the outgoing boss.

But for many of the 300 new CEOs who...