Careers

The biggest mistakes new CEOs make and how to avoid them

Many blunders made by first-time chief executive officers stem from hubris and the inability to reconcile expectations of the job with reality, according to a new study.

"From my own experience as a CEO ... I did a self-evaluation," said Sandy Lyons, CEO of The River Group, which conducted the research. "On a scale of one to 10, I was maybe a six. Six months later, I realized I was probably a two."

The self-evaluations from the 75 CEOs from public and private companies surveyed for the study averaged a 7.2 out of 10. And like Lyons, six months into the job, they felt they were more ill-prepared on day one than they initially thought — more like a 3.5 out of 10.

The CEOs in the River Group study run companies that average 8,000 employees and about $3 billion in revenue. Forty-nine percent of the companies are based in the North America, with another 40 percent from European Union nations and 11 percent from South America and Asia.

The best corporate leaders have just the right amount of humility and confidence, Lyons said. But most of all, "you have to be true to yourself," he said.

"You are an apprentice in a role that everybody expects you to be the master," Lyons said.

While new CEOs rely on the skills and accomplishments that got them there, successful ones quickly find out there's plenty to learn on the job, he said.

"Even your closest friends treat you differently." -Sandy Lyons, The River Group CEO

But getting quality feedback from other internal leaders was a chief complaint among the CEOs survey by The River Group.

"The whole aspect of it's lonely at the top. You don't create that. It's created around you," said Lyons, a four-time CEO of multinational businesses in the U.S. and Europe. "Even your closest friends treat you differently. You try to get honest feedback. But people are cautious what they tell you."

One of the best ways to combat this echo chamber is to enlist a trusted advisor or a CEO coach—someone who can tell the CEO exactly what they need to hear without fear of repercussions, Lysons said.

Lyons recalled what a friend told him when he became a CEO for the first time: "You're going to be smarter. You're going to be funnier. You're going to be more handsome. You're going to be taller. And [it's] all because your title changed."

"One of the biggest problems new CEOs can have is actually believing you're CEO," he said, stressing CEOs just occupy the position for a period of time.