Last verified: October 1, 2026.
The short answer
According to Entrepreneur, new CEOs must prioritize listening and learning to understand company culture during their first 60 days. Leaders should schedule focus groups with frontline staff to build trust, identify structural friction rather than personality conflicts, and form relationships with key stakeholders to avoid strategic blind spots.
The turnover rate for top leadership
The turnover rate for top leadership is higher than most owners realize. According to Equilar data cited by Entrepreneur, between 12 and 13 percent of CEOs are new to their position in any given year. Roughly 28% of those new CEOs are being hired externally. That means a significant portion of businesses are navigating a transition where the person at the helm is learning the ropes while trying to steer the ship.
Why culture matters more than you think
I talk to business owners who think valuation is just about the math. Honestly, they are wrong. If your company relies on personality or has a toxic culture, you are sitting on a liability, not an asset. When a new leader takes over, they need to understand the hidden operational friction. Entrepreneur reports that cross-functional friction typically stems from structural issues like unclear ownership rather than personality conflicts. You know what fixes that? Systems. Get the business running without you in it every day.
How to build trust and fix the structure
So what does a new leader actually do? You start by asking where the friction is. Here is the path forward:
- Schedule focus groups with individual contributors and mid-level managers to get a ground level view of morale and execution speed. It is one of the fastest ways to build trust early on.
- Avoid strategic blind spots by mapping out key stakeholders instead of overlooking them during onboarding.
- Prioritize listening and learning to understand the company culture and its strengths and weaknesses.
What this means for business owners
My read is that this applies whether you are a new CEO or an owner focused on building a business that runs on systems. You have to assess the culture and the relationships. Focus on getting the business running without you in it every day. Build KPI based scorecards and clear ownership of roles so the structure holds up when leadership changes. The first 60 days set the trajectory for a CEO’s entire tenure, but the systems you build today determine how valuable your company becomes.
Frequently asked questions
How long does it take to assess company culture?
The first 60 days set the trajectory for a CEO’s entire tenure, making this period critical for understanding strengths and weaknesses.
Is operational friction usually a personality issue?
No. Friction between teams is typically a structure problem involving unclear ownership or roles rather than a personality conflict.
What creates strategic blind spots for new leaders?
New CEOs often overlook key stakeholders during onboarding, which can create strategic blind spots.
How can new leaders identify hidden operational friction?
Leaders can identify hidden friction by asking where cross-functional friction occurs and scheduling focus groups with frontline employees.
Join us at BusinessOwner.com
I have seen enough businesses fail because the owner was too proud to fix the structure or understand the people. If you are looking to build a business that actually runs on systems, come join us. Reach out to me anytime at businessowner.com. We can help you find what is next.
Sources
Get your Transferability Score
Free 14-question assessment. See where your business stands and what's holding it back from a clean exit.
Take the Free Score