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Executive Onboarding: How and Why It Can Make a Difference

executive onboardingCongratulations! You’ve just hired your new CEO or executive leader. You’ve invested a great deal of time, energy, and money into finding the right candidate for the position, and you feel confident that you’ve found the person with the best qualifications and abilities to take on this crucial leadership role. At this point, you’re ready to celebrate, turn your attention to the next pressing project, or even more likely, you’re tired, and you feel like your job is done. You’re ready to relax and let your new executive take it from here. This is certainly an understandable position—but before you hand the torch over to the new executive and believe the process ends with the hiring, consider these statistics:

• 30 – 50% of new CEOs fail within the first 18 months of being hired

• 21% of executives promoted from within a company fail

• The direct costs of failure can be as much as 3 - 10 times the annual compensation of the executive

• The indirect costs—loss of productivity, morale, and reputation—can be even more significant than the financial losses

These daunting figures should be enough to make you stop, take a deep breath, get your second wind, and ask yourself, “How does this happen to good organizations so often? And how can we make sure this doesn’t happen to us? We spent so much time and energy finding the person with the highest qualifications for the position!” Consider the following statistic for a moment:

• Lack of interpersonal leadership skills remains the #1 reason for failure at 68%, and lack of personal skills comes in at #2 (Alexcel Corporation and the Institute for Executive Development, 2008)

You may be asking, “What do these numbers have to do with me? We’ve hired a senior person. That person should be able to develop these relationships and personal skills on his or her own.” However, compelling data indicates that performance is greatly improved, particularly in the areas of socialization and “growing” interpersonal relationships, when the deliberate process known as Executive Onboarding is used to prepare and integrate new executives. Research from The Journal of American Academy of Business indicated that by far, the most important mistake of new incoming executives in their first 90 days is not taking time to understand the environment and culture before making changes. In spite of this, a survey by the National Association of Corporate Directors reported that 45% of companies with sales of more than $500 million have no meaningful process for grooming potential CEO’s or senior executives. Boards can play an important role in this missing or incomplete process and further, have a fiduciary responsibility to ensure that the new executive has a reasonable chance at success. Whether a new leader succeeds or not depends largely on the support network a company has in place—this is where you can make the difference and protect your investment.

Executive Onboarding: What It Is (or in most cases, what it isn’t)

Executive onboarding refers to the process an organization puts in place to integrate new executives in such a way that they are fully accepted, productive and successful in their role. If done systematically and thoroughly, it will allow the new leader to put forth his or her best ideas and maximize his or her full range of abilities while ensuring support and acceptance from the staff. Unfortunately, it often operates as no more than a basic orientation process limited to introducing the person to the business, its history, structure and who’s who. But onboarding is much more than providing the new leader with necessary paperwork and a tour of the facilities. At the minimum, onboarding should focus on socialization (learning the culture), relationship building, and building the executive’s content knowledge. However, our research shows that of those companies who do offer onboarding, it is incomplete. For example, a 2005 Corporate Executive Board Recruiting Roundtable survey found 89% of new U.S. executive hires indicated they did not have the optimum level of knowledge and skills to do their job (Psychology Today), and only 30% of global executives were satisfied with their onboarding process for new hires (Korn/Ferry). While there is a great deal of material about onboarding out there, one of the key problems is that the socialization process or specific onboarding tasks are rarely made explicit. We hope this article can help fill that gap.

executive onboardingThe Board’s Role

Step One: Before the Interview

For the board, the onboarding process should begin no later than at the recruitment stage. Begin by creating a formal onboarding plan that you can utilize from the moment you determine the date to hire your new CEO. After reviewing your strategic plan and results from the last several years, brainstorm goals and leader characteristics needed to grow into the future, and revise the strategic plan for the next 5 years based on your findings. Update the job description to include the new strategic plan and leadership characteristics, and make sure your HR expert or executive search firm is familiar with this information before they begin screening potential candidates for you.

Step Two: During the Interviewing Process

The interview needs to be viewed as a process through which both you and the candidate honestly and fully assess how closely goals, personalities, and work styles match. While it is typical during an interview to talk about an organization’s business strategy, structure, and position in the industry, it’s also vital to spend a considerable amount of time talking about the organization’s culture, mission, history, and key members’ personality traits. Oftentimes this is neglected in the interview process, and focus revolves more around business skills and past professional successes. You need to recognize that top performers in one organization are not necessarily going to be the top performers in their next job—how successful they will be has much to do with their ability to positively adapt to the culture and substance of the new organization. As in any relationship, creating a successful partnership means going beyond common interests and goals—the personalities and approaches to crises, as well as triumphs, needs to match. Management style is just as important as are management skills.

You should also ask candidates specific questions about their vision of and commitment to the onboarding process. What steps do they have planned out to help them assimilate into their new roles? What sort of help do they plan to seek in order to assist them in better integrating with their new co-workers? What sorts of challenges did they face in terms of socialization with their last position? How did they address these? Make sure you both have a clear and mutual understanding of what the onboarding process will look like.

Step Three: Before The Start Date

Once you’ve made your decision on your next CEO or executive hire (and by the way, congratulations!!!! This IS cause for celebration), begin providing your new leader with information and opportunities for key introductions. Whenever possible, give him or her budgets, case studies, strategic planning documents, program information, board books, and a list of coming events and required technical training. Having such exhaustive information before a start can help the new executive become familiar with the processes and goals of the organization. Create a list of and coordinate meetings with key staff and stakeholders. If there are any organization outings, firm-wide retreats, or other important work meetings before your new hire’s start date, include him or her in these events. This can help the individual put names to faces and to create environments where the new candidate can see how the culture works, what the informal behaviors and norms are in the organization, and the way people interact with each other.

Step Four: The First 90 Days

First of all, keep in mind that while 90 days is often considered a benchmark for specific onboarding practices, 37% of all HR and line of business professionals believe that it takes 6 months for a new employee to make a firm decision about staying with a company (Aberdeen Group). Research further indicates that the majority of CEOs and executive leaders don’t feel that they are fully in a position to effect real change within an organization before the 6 month mark. Ideally, onboarding practices should continue well beyond the “90 day mark,” and at least up through the first 12 months. But there is no denying that those first 90 days are crucial in developing the executive’s key relationships, and therefore, success. To best promote that success, follow these basic steps:

• Have the outgoing or interim executive prepare a detailed memorandum that analyzes both the business challenges and an assessment of the interpersonal dynamics at play. This type of information can provide invaluable insights into those crucial relationships the executive will want to form and maintain, and can really assist the new leader in preventing any initial social “faux-pas”.

• Have a “transition ceremony” to acknowledge the outgoing/interim leader’s achievements and to welcome the new leader. Be sure to invite those key members and stakeholders to participate in this celebration. This can bring both emotional closure to the transition period and formally and ritually put the new leader rightfully in charge of the organization. It is also a way to confer legitimacy to the new leader and solidify some of those early relationships that began with initial introductions.

• Create an onboarding team that ideally includes 2 mentors. Define the roles and responsibilities of each member of the team. For example, who will be responsible for stepping in if issues arise? How do successes get reinforced, and by whom? Make sure the team is aware of with whom the executive will need to establish relationships and in what order. How do the different stakeholders operate? What political and organizational nuances do they need to understand and how can they best navigate them? Those in a new senior position should have partners in the firm who are helping them through the onboarding process. One mentor can act as a confidante while another can advise on the professional aspects and responsibilities of the new role. This will enable the new candidate to learn to operate successfully within both the formal and the informal organization and culture. If the position is that as a new CEO, it is especially important that these mentors are members of the organization’s board.

• Agree in advance to the timing and frequency of “check-in” or assessment points. At the very minimum, there should be formal sessions at 30, 60, and 90 days. The executive should be given frequent milestone feedback, and these meetings can provide valuable insight on successes and areas for further development and growth.

The Executive’s Role

While the goal of this article is primarily to offer concrete advice to organizations in developing strong onboarding programs, we cannot stress enough how crucial it is that the onboarding process be a joint venture—both the organization and the new executive need to be equally committed to and partnering in the venture for it to be successful. We consider this “integrated approach,” where both parties take responsibility for the onboarding process, the best chance for your new leader’s success. With that in mind, what follows here are just a few suggestions for incoming candidates:

• Gain information early. Begin in the interview process to ask about onboarding practices in place, and who will be involved and what dedicated resources will help you as the new executive enter the organization. Ask specific questions about how you can best assimilate into the organization’s culture. Get up to speed on the organization before you start, by requesting comprehensive information and attending important events and meetings with key stakeholders. Go to association meetings and attend legislative sessions.

• Look for opportunities to build many relationships and networks, even before your start date. Remember to build external networks outside of your immediate community with peers as well.

• Listen, listen, and listen. And then ask questions. Don’t try to show your value by talking too much. Check your ego, listen carefully, and be willing to meet people where they are. Ask employees what they enjoy most about their work. Find out about their career plans and what they need to be even more successful in their jobs. Ask open-ended questions such as “How do you define success?” and “What are your concerns?” This is your chance to build relationships, not show off.

• Seek help: Ask for, and meet regularly with, a mentor, if one is not initially provided by the organization.

• Respect the existing culture. Develop a list of problems to solve, which usually involve financial issues or the organizational structure, but early on, make decisions on small, quick fixes that will earn trust and respect from employees for making their lives easier. Don’t try to change the culture—at least too quickly. Don’t feel you need to “shake things up” immediately, unless what you are observing is clearly dysfunctional behavior.

• Establish specific professional and relationship goals and a clear timeline for reaching these goals. Make sure you have checkpoints in place for discussing your successes in meeting your timeline with those to whom you report.

Final Thoughts: Getting the Most Out of Your Investment

There is so much at stake both for the organization and the individual accepting a new executive position: Consider the onboarding process part of your mutual investment in each other. The experience doesn’t have to be burdensome or costly—in reality, not providing an onboarding process can be much more expensive, both in terms of direct and hidden costs. At Deffet Group, our goal is to provide you with as much information as possible to help you achieve your targeted results, and we know how important finding the best candidate is to your future success. We also don’t want the new leader of your community to be part of the 30-50% of new leaders who fail. Taking the time to invest in a solid, thorough onboarding experience for your new executive is, we believe, one way to help ensure you experience a lasting and satisfying relationship with that individual. Successful leaders, like all businesses and organizations, are a product of interdependent networks and relationships characterized by a high degree of trust and agreement. Remember what you have already learned from your past successes: your business will improve when relationships are stronger.

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