Long ago, a leadership coach gave me some pithy but untestable advice. It involved three things she said brand new leaders should do quickly to take charge:
Hire someone.
Fire someone.
Move someone’s office.
I question whether it works, although it does conform to my favorite communication rule: the Rule of 3.
(That would be the hard-wired receptiveness we have to things that are grouped in three — everything from the 3 little pigs to “veni, vidi, vici.”)
However, new research from a trio of business school professors, published in the Journal of Management, suggests that there’s a much simpler thing that new leaders can do to set the tone and significantly improve their chances of success.
The trick? Insist on starting either in January or at the beginning of the fiscal year.
‘Heightened net income’
As researchers Diego Villalpando, Robert Campbell and Liliana Pérez-Nordtvedt summarized in Harvard Business Review earlier this summer:
“When CEOs began their tenures within 10 days of the calendar or their firm’s fiscal year (which is around 25% of successions in our sample), their firms experienced, on average, a 0.4% higher ROA [return on assets] than firms whose CEOs started at any other point in the year.
This effect might seem small, but it equates to a nearly 31% difference in ROA compared to our sample’s average ROA and begins to fade after the first 10 days.
We also found that this synchronization resulted in heightened net income for these firms, on average, over the same post-succession period.”
It’s even more important, the research suggested, for CEOs who come from outside the firm, or are women, or else fairly young (under age 46), or “members of racial or ethnic minority groups.”
Why would the calendar matter?
Truly, this strikes me as the kind of study that makes sense — but that you’d really want to dig down and question your assumptions.
I mean: January versus February; does it really matter that much?
Villalpando, Campbell, and Pérez-Nordtvedt said they interviewed stakeholders surrounding many of the 690 CEO transitions they examined for this study, and came up with three non-exclusive theories:
“Alignment of Goals and Objectives.” As they put it, “the beginning of the year is when new goals are set,” and a CEO who begins “in the new year” can set those goals “according to their own vision,” as opposed to having to consider the goals of the departing or departed leader.
“Minimization of Disruption.” Bottom line, the beginning of a calendar year or fiscal year is likely to be perceived as “a natural breakpoint,” which “allows enough time for organizational members to regain focus and attention on tasks and projects before results are expected.”
“Decrease in Time Pressure.” While there’s always pressure for a new leader or CEO to perform, “this pressure is especially strong closer to the end of a calendar or fiscal year,” and so taking over at the start of the year “can alleviate time-induced pressure, enhancing decision-making and ultimately operational performance.”
Atypical CEOs
As for young leaders, women, or “members of racial or ethnic minority groups,” Villalpando, Campbell, and Pérez-Nordtvedt theorized that this population of CEOs — who are a minority overall — are also “more likely to enact major strategic change,” according to previous research.
The start of a calendar or fiscal year is simply a time when people are more open to change and less averse to having their routines or presumptions upended, the idea goes, and thus more likely to be receptive and quicker to buy into a leader’s vision.
At the least, as Jeff Bezos might have put it, they might be more willing to “disagree and commit.”
Of course, timing isn’t always negotiable.
An outgoing CEO might have to be replaced in a hurry, and an incoming leader might not want to put off his or her start date — either because they’re simply eager to get going, or because they don’t want to signal any reluctance.
But all other things being equal, if you have a choice, either just after New Year’s Day or just after the start of the fiscal year seems like a smart choice.
Now, about your office …
7 other things worth knowing
Tom Homan, who was later named President Trump’s border czar, was recorded in September 2024 accepting a bag with $50,000 in cash in an undercover F.B.I. investigation, according to people familiar with the case, which was later shut down by Trump administration officials. Asked for comment … the White House, the Justice Department and the FBI dismissed the investigation as politically motivated and baseless. (The New York Times, MSNBC)
The United Kingdom, Canada and Australia officially recognized Palestine as a state over the weekend, a significant shift in foreign policy and a step away from their alignment with the United States, with several other European nations and U.S. allies set to follow suit this week. Israeli Prime Minister Benjamin Netanyahu accused the foreign leaders of giving Hamas a “prize.” “It will not happen,” he said. “A Palestinian state will not be established west of the Jordan River.” (NBC News)
Jimmy Kimmel is getting back on the air. The ABC late-night host is returning to broadcast on Tuesday following a brief-but-monumental suspension that sparked a national debate over the Trump Administration’s pressure tactics and the modern limits and consequences of free speech. (Hollywood Reporter)
Poland's prime minister warned it will shoot down Russian fighter jets if they violate its territory. This follows a series of incidents in which Russian drones or warplanes entered airspace of Poland, Romania, and, last Friday, Estonia, when three Russian MiG-31 jets remained in the NATO member state’s airspace for nearly 12 minutes before the alliance scrambled jets in response. (The Mirror)
A California attorney must pay a $10,000 fine for filing a state court appeal full of fake quotations generated by the artificial intelligence tool ChatGPT. The fine appears to be the largest issued over AI fabrications by a California court and came with a blistering opinion stating that 21 of 23 quotes from cases cited in the attorney’s opening brief were made up. It also noted that numerous out-of-state and federal courts have confronted attorneys for citing fake legal authority. (Cal Matters)
Isn’t this exactly how you get an ancient Egyptian curse? A 3,000-year-old Pharaoh’s bracelet has been stolen from a museum and melted down for gold. Pharaoh Amenemope’s lapis lazuli bead jewelry was snatched from Cairo’s Egyptian Museum on September 9, before being sold for the equivalent of roughly $3,800. Four suspects have been arrested. (Metro UK)
Thousands of baseball fans set a new Guinness World Record for the Largest Game of Catch at Yogi Berra Stadium in Monctlair, N.J. over the weekend, with 1,179 pairs of participants. The challenge – a five-minute continuous game of catch – and no stopping to look at your cell phone or take a selfie. Yogi’s Big Catch beat the previous record of 972 set in 2017 in Illinois. (Montclair Local)
Thanks for reading. Photo by Dylan Nolte on Unsplash. I wrote about some of this before at Inc.com. See you in the comments.
Is it really about the first amendment, or is it more the fear of being shot up by a mad leftist, ala Sacramento?...
Regarding Tom Homan, welp, something is rotten in Denmark, and the lefties are all over it. As a right-leaning centrist who loves how the right makes the left's head explode...this boils down to neither side is perfect; it's just that the right is less not perfect than the left is.
From another source: Kimmel's return will be pre-empted by at least one large TV station group. Sinclair Broadcast Group, the largest owner of ABC stations, with 38 across the country, including WJLA, the ABC affiliate that serves the Washington D.C. metro area, has said it will run other programming.