Getting New Executives Up To Speed: The Business Case for Executive On-boarding

Article by E. Scott Golden appearing in the Charlotte Business Journal.

Each new executive hired from outside the company begins his or her new job as an outsider in a strange land. No matter how similar the former company or previous job superficially seems, the new position is a major transition with opportunity and peril for both the new executive as well as the company. By designing and institutionalizing formal executive on-boarding processes for newly hired executives, CEOs and HR executives can ensure a higher probability of success when hiring outside leaders.

The probabilities for success when hiring outside leaders definitely need to be improved. Research into the performance of executives hired from outside the organization indicates that 40-60 percent will fail to be successful in their new jobs. The costs of such failure are significant and impact both the individual leader, who may lose his or her job, as well as the organization where direct costs due to failure of a newly hired executive have been estimated to be two to three times his or her salary. When indirect costs are factored in, the cost of failure to successfully onboard new leaders has been found to reach as high as 24 times the salary of the failed executive.

Think about it! Not only is it potentially perilous for the newcomer but failure can be extremely expensive for the hiring company. The causes of failure are complex and idiosyncratic. They involve the fact that many executives have been thought to be beyond the need for training or coaching, that organizational culture is so powerful (and yet mostly hidden) and it involves the fact that people are naturally wary of strangers. It frequently happens that no one "shows-the-ropes" to a new executive and he or she ends up wandering into organizational minefields and blowing him or herself (and others) up.

Though the goal of avoiding failure in executive deployment is important, the true goal should be to ensure success and increase the speed in which that executive can achieve the performance goals he or she was hired to accomplish in the first place. It's been estimated that it takes newly hired middle managers an average of approximately 6.2 months to become fully integrated into their new roles. Senior executive positions are even more complex and thus the integration phase may be even longer.

The good news is that new leader on-boarding increases both the probability of executive success and the confidence of individual executives in their preparation and ability to focus on reaching key goals and objectives.

Executive on-boarding programs should be flexibly designed and administered so as to competently address both the individual characteristics of each executive as well as the organizational situation he or she is being positioned to lead. An example of such flexibility would be to have two variations of the program: one designed for internal promotions and the other designed for external hires for whom elements of cultural alignment and stakeholder networking are critically important.

New leader on-boarding programs provide HR a huge opportunity to play a key strategic role in positively impacting organization leadership and the company culture as a whole. A quality executive on-boarding process typically involves an organized talent management process that provides integrated support services from the time of hire through the first 6-18 months of employment. World class executive on-boarding programs are built around a structured learning process that systematically involves the new leader in the key business, culture, and relationship dynamics of the organization. Components of such a program may include:

• Individual executive coaching
• Creation of an executive development plan
• Facilitated goal and role clarification with new leaders, or for a new CEO and the board of directors
• New leader team building workshop with direct reports
• Development of stakeholder analysis and a networking plan for understanding and getting to know all the key people (other executives, employees, customers and vendors) who are important to success
• Training in specific line of business products, services, and processes

Successful executive on-boarding ultimately involves a partnership between the new executive, the hiring manager, HR and the executive coach, where all are focused on helping the new leader become a successful member of the organization's leadership team.

Leadership transitions can be risky business. Luckily we have the tools to both manage these risks and the techniques to increase the probabilities of success. Why expose your new executive hires to the law of the jungle when you can use leadership on-boarding to lay out a clear path to successful executive performance.

E. Scott Golden, MS is partner-leadership development services for Coleman Lew & Associates and can be reached at (704)377-0362 or sgolden@colemanlew.com.

Coleman Lew & Associates, Inc., founded in 1979 and headquartered in Charlotte, N.C., is a international retained executive search firm that recruits board members, officers, and senior level executives for national and international companies, academic institutions and non-profit organizations. The firm also provides customized leadership development services to organizations seeking to maximize corporate performance. Member, Association of Executive Search Consultants (AESC).