A comprehensive approach helps attract, retain and develop senior executives.
Hiring a new CEO is arguably one of the most important decisions a board will make. Finding the right talent and the right fit is only part of the job, however: Onboarding can make the difference between a successful hire and failed one.
Studies show that 40 percent of new leaders fail during the first 18 months (Bradt, Check & Pedraza, 2006) and the average cost of a failed executive-level hire is a staggering $2.7 million (Bossert, 2004). Despite a substantial investment of time, effort and money to recruit top talent, many companies do a poor job of onboarding; only 39 percent of executives reported being satisfied by their company’s efforts to integrate them (Wells, 2005). Other than the typical onesize-fits-all orientation, few companies effectively acclimate and acculturate new CEOs and C-Suite level executives into the corporate culture.
The return on investment for onboarding is significant. Effective onboarding results in a shortened time to productivity, increased engagement and reduced turnover. However, a successful onboarding is not simple. Integrating a new executive into an organization is a highly political and multidimensional process, with numerous opportunities for success and failure (Ferris, Perrewe, Arnold & Gilmore, 2000).
New executives must quickly navigate the unspoken rules, processes and networks that contribute to how things really get done in the company. They must establish key strategic partnerships, align themselves with the culture and strategy of the organization, build their teams, and deliver results. The overall purpose of executive onboarding is to help leaders transition quickly, avoid common obstacles, shorten the productivity curve, incite engagement, and increase organizational commitment and satisfaction.
Onboarding is not a standalone activity; it is a comprehensive approach to attracting, retaining and developing successful leaders in a five-stage process:
- Selection: Determining cultural fit and leadership style, along with identifying core competencies.
- Preboarding: Developing an onboarding plan, preliminary stakeholder analysis and identification of a coach.
- Integration: Focusing in the first 30 days on stakeholder mapping, partner meetings, transition meetings and executive coaching.
- Execution: Developing scorecards and feedback processes over the next two months, as the new leader executes his or her role.
- Results: Determining results through metrics and through feedback in the form of tools such as 360-degree assessments.
Recognizing and implementing these steps can greatly improve a new hire’s likelihood of a smooth and productive transition. Think of onboarding as a type of insurance for the successful placement of senior executives.