Q: Is it a good idea to go outside the company for a new corporate leader?
A: Filling senior vacancies by looking outside for the best candidates can help to spark new ideas but grafting in new leaders has its risks. The cost of failure is high. Leadership transitions get riskier the higher up the organization they occur: two out of every five CEOs fail in the first 18 months (Harvard Business Review, January 2005). Corporate bankruptcies reveal that some CEOs fail on such a scale as to bring down the company with them.
Leaders in new positions often fail for a few common reasons: due to unclear or outsized expectations, a failure to build partnerships with key stakeholders, a failure to learn the company, industry or the job itself fast enough, a failure to determine the process for gaining commitments from direct reports and a failure to recognize and manage the impact of change on people.
When newly recruited, the following types of executives experienced the highest failure rates within the first 18 months: senior-level executives (39%), sales executives (30%), marketing executives (25%), and operations executives (23%).Here are the major reasons for failure in the new job:
They fail to establish a cultural fit……………......................75%
They fail to build teamwork with staff and peers…...........…52%
They are unclear about what their bosses expect….............33%
They don't have the required internal political savvy…..........25%
There's no process to assimilate executives into the firm…...22%
Yet, if companies don't seek fresh blood periodically, they can become dangerously insular, warns David Ulrich, professor at the University of Michigan business school. "At fast-growing or fast-changing businesses," he adds, "you may find that existing managers can't scale up or transform what they do."
Onboarding coaching of the newly recruited or promoted executive can turnaround this high rate of failure. Onboarding coaching helps the executive more quickly adapt to the employer's culture, create rapport with his or her immediate team and find productive ways to achieve necessary goals.
Today, executive movements are increasing as companies make adjustments to become more globally competitive.
Leading a community, country or business transition through a cultural change is a tough assignment. Getting the people side right can make all the difference. Cultural transitions are times of heightened emotion where perceptions, feelings and hunches trump logic.
Everyone's decision making is emotional, not rational ... subconsciously under the control of their emotional brain (limbic system), not their analytical (neocortical) brain.
When people make decisions, their decisions are not just about rational data weighing of the pros and cons. Buying a car, choosing a mate, selecting a new home, following a career path, perceiving how the world works is all decided emotionally. Emotion is always operating below the surface and the executive doesn't recognize how important his or her feelings are at the time of the decision.
Today, many executives are driven by the fear of not surviving the transitional period and this fear can adversely affect their decision-making abilities. The turnaround won’t be complete until the fear of failure is confronted in the minds of the executive survivors. Helping managers to become emotionally stable, free from the fear of failure, when making important decisions is the job of the leader.
Albert Einstein once said, "We should take care not to make the intellect our god; it has, of course, powerful muscles but no personality. It cannot lead; it can only serve."
Transformational leaders have a clear collective vision and manage to communicate it effectively to all employees. By acting as role models, they inspire employees to put the good of the organization above self-interest. They know and science has discovered emotionality's deeper purpose: the timeworn mechanisms of emotion allow two human beings to receive the contents of each other's minds. These leaders stimulate employees through the power of emotion to be more innovative by taking risks on-the-job.
Yet, after years of cost-cutting initiatives and growing job insecurity, most executives don't feel like putting themselves on the line. Add to that individual performance incentives, where a one-year term determines a large bonus, and investing in risky long-term payoffs takes a back seat. Most managers postpone risky decisions for fear of failure -- to not make incremental mistakes that can lead to innovative success.
That's why it is difficult to make the shift from a play-it-safe corporate culture to an innovation-driven culture.