10 Questions New CEOs Should Ask Their Executives

  1. Market Share
    Are you gaining, holding or losing market share in each of the segments that constitute your business? Why? Against which competitors?
  2. Customer Leverage
    What percentage of your product is sold to customers who have significant leverage over you? Which customers are they, and why do they have leverage? Please provide a list of your top 25 customers and approximate sales volume to each. How much revenue comes from price-sensitive commodity products?
  3. Fixed And Variable Costs
    What is the ratio of fixed and variable costs for your business? If the business has several segments, is there a wide range by segments? Provide a profit and loss report for last year and your planned P&L for this year. Break down the fixed and variable costs in some detail.
  4. Purchasing
    How do you do your purchasing? Who does it for you? How would you assess the skills of those who are involved with the purchasing process? Do any of your purchasing needs complement those of another business unit? If so, how do you exploit that? What percentage of your total external purchases are bought from suppliers with significant leverage over your business?
  5. Balance Sheet
    Are you running an asset-intensive business? What’s been happening with working capital over the last few years? What is likely to occur this year? Why?
  6. Research And Development
    How would you describe the role of R&D in your business? Who takes the lead in your business unit, and how does this person work with corporate R&D? How much R&D comes from within the business, and how much comes from the corporate office, or outside the company altogether? What is your total R&D budget?
  7. Leadership Approach
    What is your personal approach toward running your business? If you had to sum it up in three to five phrases or qualities, what are they? Has this approach worked? What tells you so? Are you able to modify your approach if you see that it does not appear to be working? Can you offer any examples? What are your five best strengths, and how did you come by them? What are five areas for improvement, and what are you doing about them?
  8. People
    What are you doing to ensure that the best-qualified people are in a position to move forward in your organization? That is, what is your approach to succession planning? How are you ensuring that you re-recruit your keepers and remove and replace those who are either not good contributors or who are not able to adjust to changes in the business?
  9. The New CEO
    What are the three most critical qualities, skills or capabilities that a new CEO should have at this stage of the company’s history? Why?
  10. Business Turnover
    Of your total business turnover, how much of it this year will likely come from markets or market segments where your company is (a) Clearly the leading competitor? (b) One of several equally strong competitors? (c) Clearly one of the weaker competitors? In each of the three situations, how does being in such a position affect your pricing tactics?

Source: Rules For Rookie CEOs / Steve Schaubert and William Hayes / Forbes, 08.15.06

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