On his first day as CEO of a Washington, D.C., commercial real-estate company, John L. Ziegenhein turned to his wife over morning coffee and joked: How do I get to the office?
In three months of interviewing for the top job at Chevy Chase Land Co., he had never been inside the company’s corporate headquarters. Instead of boardroom presentations or quiet dinners in restaurant banquettes, he completed more than 15 interviews for the job almost entirely from his home, sitting on Zoom calls for sometimes hours at a time.
“Well, I guess I got to pull up the address,” he said to his wife with a chuckle. He knew the location but, he said, “I had never seen my physical office until Monday morning.”
Companies are still replacing executives in the coronavirus era, though the role of a new CEO is now different in almost every way. Those starting top jobs during the pandemic must get up to speed online, meet their management teams remotely and deal with a scattered list of emergency action items, alongside turning a profit and creating new products during an economic downturn. Many have never met their direct reports in person, so they must build trust from the ground up.
The experience can be surreal. Some new chiefs say they have still never been in their company’s offices. Many can’t visit employees in other cities due to ongoing travel bans. Some, like the chief executive of medical-device company VisionCare, are asking colleagues to take them on FaceTime tours of facilities. Others, like the new chief of flower-delivery service FTD, have had to deal with emergencies like a coronavirus lockdown that affected overseas call centers.
“The 21st century CEO role was already really difficult,” says Cathy Anterasian, head of CEO succession services at Spencer Stuart, the executive search and leadership advisory firm. “It is all of that on steroids given the challenges of the day.”
In recent weeks, technology startup Magic Leap, beauty giant Coty Inc. and furniture retailer Crate and Barrel have all named new leaders. Gap Inc.’s Sonia Syngal, previously the head of the company’s Old Navy brand, took on the CEO role in late March, while the New York Times Co. last month named Meredith Kopit Levien, its chief operating officer, as its next CEO. On Monday, Tyson Foods Inc. said it would promote company president Dean Banks, a former technology executive, to its top job, while Clorox Co. said it would elevate its president, Linda Rendle, to CEO in September. Ford Motor Co. also said this week that chief operating officer Jim Farley will take over as chief executive on Oct. 1 after a three-year turnaround effort led by the auto maker’s current CEO, Jim Hackett, failed to raise profits or boost Ford’s stock.
While some companies are seizing on the current crisis to make changes, many more are reluctant to oust leaders in a downturn, hoping to avoid added disruption. New research from Spencer Stuart and Bain & Co. using 30 years of data shows that CEO transitions tend to decline by up to 32% in times of economic crisis, as many boards seek stability, even if leaders are showing poor performance. The numbers from April and May show the trend has continued in this crisis, with CEO turnover slowing dramatically worldwide.
Companies choosing to make changes in the C-suite now may be addressing immediate needs, or the turnover could also reflect long-term succession planning put in place in prior years, Ms. Anterasian says.
For some executives, the pandemic was a catalyst for changing jobs. In March, soon after the U.S. went into lockdown, Johnson & Johnson vice president Tom Ruggia undertook a personal exercise to map out his career. He said he asked himself, “Where are you today in your life, and where do you want to be?”
‘You’ve got this situation: It is what it is,’ says. VisionCare CEO Tom Ruggia. ‘We can cry about it, or can we make the most of every moment.’
Photo: Bryan Anselm for The Wall Street JournalFor several years, Mr. Ruggia had commuted each week to a J&J office in California, keeping him away from his family in New Jersey more than he wanted. The pandemic, he thought, could be a pivotal moment.
“This time period was going to define people and their future,” he said.
Around that time, Mr. Ruggia got a call about the CEO role at VisionCare Inc., a small company developing products to help restore vision to people in the late stages of macular degeneration. The company’s purpose resonated with him, Mr. Ruggia said, so he studied up on the firm and reached out to a peer who had also left a corporate giant to lead a startup to get his perspective. Ultimately, he made the leap and took the reins this summer.
With the pandemic raging, Mr. Ruggia quickly embarked on a listening tour—albeit a virtual one. He hosted a town hall meeting to answer questions and introduce himself to the company’s 18 employees and set up a marathon of one-on-one meetings with his management team via video. Instead of visiting VisionCare’s manufacturing and research and development facilities in Israel, a general manager there dialed Mr. Ruggia on FaceTime and walked around the office, holding his phone up so Mr. Ruggia could wave to employees.
“It’s not like making a trip to Israel, and that’s still in the plans for when that can occur again. But at least they can see my face moving around the building,” he said. “You’ve got this situation: It is what it is. We can cry about it, or can we make the most of every moment.”
As a first-time CEO, Mr. Ruggia says there is much he wants to accomplish, but he also frequently reminds himself to be empathetic with employees, knowing many are facing personal difficulties in the pandemic. “When you take the helm, whether it be a small or large company, in this environment, you generally have that energy of a racehorse and that can be completely disruptive to people’s lives,” he says. “To be an executive in this time, especially one taking over a new role, you have to stop and say ‘human first, human first.’ You almost have to remind yourself before any meeting you get on: Slow down, human first.”
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Some new CEOs say that, somewhat unexpectedly, the pandemic has helped them to better connect with staff. Hayden Brown, CEO of Upwork, which helps companies hire freelancers and remote talent, began her role in January. Instead of being sequestered off in her corner office, more employees feel free to connect with her online and she pops into more virtual team meetings than she would otherwise be able to attend in person, she says. Since everybody’s square on a Zoom call is the same size, Ms. Brown said that she finds employees feel less intimidated about speaking up with her. She’s also noticed a shift in how staffers communicate with her over email and Slack.
“Their guard is down in terms of reaching out to me,” she said. “People feel like everyone’s doing this and we’re all communicating this way. I can Slack my colleague next to me and I can Slack Hayden, and it’s not a big deal.”
The best-performing CEOs in a crisis tend to be those who act quickly, looking for chances to not only survive, but to transform a business, says Courtney della Cava, a partner in Bain’s leadership practice. Many boards give new leaders the benefit of the doubt in a downturn, creating chances for even greater change, she added.
“The best ones recognize that winners pull away from losers, so this is not an opportunity to squander,” she said. “It’s a defining moment. It’s the kind of challenge and opportunity that occurs once in a generation.”
New CEOs who have been on the job for a few months already say they have faced tests that have solidified bonds with their teams. Charlie Cole took the helm of flower-delivery service FTD LLC in late March. By then, the coronavirus had upended the economy, and Mother’s Day, the company’s most-important holiday, which Mr. Cole calls FTD’s make-or-break “Black Friday,” was just six weeks away. FTD’s offices outside Chicago were closed, and Mr. Cole opted to work from his home in Seattle out of respect for the state of Washington’s shelter-in-place order. That meant remotely directing a team he did not know.
Flower delivery company FTD has its corporate offices outside Chicago. New CEO Charlie Cole has been working from his home—and occasionally, a standing desk in his yard—in Seattle.
Photo: Jovelle Tamayo for The Wall Street JournalProblems soon mounted. Some farms in California closed, halting the supply of fresh flowers. Many of the company’s retail partners—florists it doesn’t directly control—temporarily closed shop. Some flower deliveries were delayed because shipping companies were overwhelmed by all the new online orders. A lockdown in the Philippines temporarily disrupted an outsourced call center where customers dialed in with questions and complaints, so FTD hired more virtual agents in the U.S. and set up other overseas call centers, including one in Jamaica, to hedge against any future issues, Mr. Cole says.
“You kind of have to throw out the manual,” he said. “Covid-19 doesn’t care about what my vision for the company was. We had to change our goals on a daily, nightly basis.”
Amid it all, Mr. Cole amped up communication, scheduling 50 hours of videoconference calls in his first week on the job with his direct reports. He vowed to answer every email he received from employees, a commitment he said he has upheld. He also began writing a personal letter to employees nearly every week, sharing raw moments, like how the death of his mother during his childhood shaped his view of Mother’s Day, and weighing in on police brutality and racial unrest. “It was vulnerable by nature,” he says.
In the end, Mother’s Day revenue surpassed FTD’s expectations, making it one of the best in company history, though there were customers who faced delivery delays, he said. The intensity of those early weeks also made clear the company’s strengths and weaknesses to Mr. Cole, while giving FTD’s culture a jolt.
Rachel Martin, owner of Ballard Blossom in Seattle, assembles a floral arrangement at her shop. Ballard Blossom uses FTD to fulfill orders.
Photo: Jovelle Tamayo for The Wall Street Journal“Success in the face of unprecedented circumstances... I think it gives us a momentum,” he said. “Our team congealed in a way that you couldn’t fake. We did it all virtually.”
But transitions during the pandemic can be hard on people in other ways.
Mr. Ziegenhein, of Chevy Chase Land Co., spent 11 years at his prior company and says there were no satisfying goodbyes. With everyone working remotely, there was no farewell lunch or happy hour with his former colleagues. Instead, he went in on a Saturday to clean out his desk, and took a picture of his empty office.
“It was difficult for me, somewhat emotional,” he said. “To leave, it felt like going in under the cover of darkness, taking my stuff out of the office. It just left me feeling a little bit empty.”
In his new role, Mr. Ziegenhein told a virtual town hall his first week that anybody who wanted to meet face-to-face could come over for a socially distant beer or margarita in his backyard. The first backyard meeting is planned for next week.
There have been upsides to taking on the job amid the pandemic. With so many people working virtually, Mr. Ziegenhein has chosen to go into his office regularly but nobody stops by to ask him to micromanage situations. Instead, he said that he is able to focus on big priorities for the company, which owns and manages offices, apartment complexes and retail facilities, including how to build and design offices to make them more resilient to future pandemics.
“I’m in an office right now completely by myself,” he says. “I’m just laser focused.”
Write to Chip Cutter at chip.cutter@wsj.com
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