Data on Leadership Transitions

·         Thought-provoking saying

·         Humor: What were they thinking?

·         Startling data on leadership transition

·         Thought-provoking saying

·         Humor: What were they thinking?

·         Startling data on leadership transition

Thought-provoking saying: Your ability is your responsibility. Share that with the troops and see what reactions you get.

Humor: I can’t believe this Irish company’s high-priced product got out the door with this name, but it did.  Succession Planning: Toolkit for Execution

I know people in the business who think that’s a pretty good tool for succession planning. (You are supposed to laugh at that.)

This week I listened to a teleseminar that aired some startling statistics on leadership transition and success rates. The session was hosted by Patricia Wheeler, an executive coach to Fortune 100 companies, and featured Scott Saslow from the Institute for Executive Development. The issue was the success and failure of top executives. Here are some of the nuggets I collected.

• ·         The rate of change at the CEO level is at 15% a year, an historic level according to Booz Allen, a leading consulting firm. The accelerated pace is due to Boomers retiring, companies growing, and leaders being asked to step up to new roles at a faster pace.

The Institute surveyed 150 companies in different professions on their leadership success. Their findings applied to the top 5% of executives in the participating companies. Here is some of what they found.

• ·         When an executive is brought in from outside the company, 30% of them fail to meet expectations by the two-year mark. That means 1 in 3 fail after a company has gone to great cost to find the right exec.
• ·         When the executive is promoted from within the company, 20% of them fail to meet expectations by the two-year mark. That’s 1 in 5. Even though they’ve been in the company, subtle shifts in culture and employee perceptions can cause trouble.

So, what drives these failures to meet expectations?

• ·         The survey showed 70% of failures (both external and internal hires) were due to a lack of interpersonal and leadership skills. Wow.

The good news is the solution is manageable. The most important safeguard against such failure is to establish clear expectations between the new hire and the boss, be it the CEO or the board of directors. Also, you need to establish clear expectations between the new guy and his team and his peers. That is particularly important for promotions from within.

The survey also found that the top four things firms do to acclimate the new guy are mentoring, formal orientation, executive coaching, and customized assimilation plans and programs.

• ·         For external hires, mentoring was most effective, followed by assimilation plans and executive coaching.
• ·         For internal promotions, executive coaching was most effective, followed by having a customized plan.

That’s certainly food for thought.

Date of newsletter: May 22, 2008