When thrust upon a new leadership position, a leader’s authority will be judged based on their actions according to the status of the team. To ensure that their authority is respected and acknowledged leaders need to correctly assess the situation and act appropriately. Our speaker refers to 2 distinct scenarios:

• Firstly, let’s imagine that a CEO is sent away because the company is facing a dire situation, results are underwhelming, and progress is stunted. When a new CEO takes the seat, they will be expected to turn things around and yield better results. In this situation, the CEO will be judged based upon how quickly and effectively they can enact changes upon entering the company. More than just assessing the company, the new CEO will have to have an understanding of the situation and know where to cut costs and how to shift the direction of the company onto brighter horizons. Their ability to make quick decisions will be much more respected.
• Secondly let’s analyze an opposite scenario. Let’s say the CEO is sent away but the company is doing great when their substitute takes power. In this context, if the new CEO decides to make bold and ground-breaking decisions, they will probably be met with some hesitation and resentment. In this situation, that new CEO’s authority would be judged more on their ability to learn about the ins and outs of the company and what it does do ensure such stellar results, more so than if they were to start making changes abruptly. This new CEO will be expected to do a lot of Leadership by Walking Around, a term coined by our speaker to signify a leader’s capacity to observe, listen and to stop and think.

In both scenarios, we can assume that the leaders that were brought in were known for their excellence as managers. However, what comes to define their expertise is their knowledge of the context the company is in. Only by understanding the context are they able to employ the correct function for the job they were given. In summary, a good leader is someone who knows how to apply their knowledge to determine the appropriate course of action in response to their teams’ circumstances.