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The PAINFUL TRUTH – recruitment has a high failure rate!!

  • The annual CEO Success Survey by PWC revealed that CEO turnover at the 2500 largest companies in the world rose from 14.3% in 2014 to 16.6% in 2015—a record high for this study.
  • 58% of the highest-priority hires, new executives hired from the outside, fail in their new position within 18 months (Michael Watkins).
  • Only a 19% success rate — only one out of five successfully selected candidates can be classified as unequivocal successes (Leadership IQ).

It is also widely understood that, in real terms, the actual cost of this failure may approach 2.5 times the executive’s annual package. Taken in context the development of a new appointee, either at CEO level or below, is a small price to pay given the data and trends outlined above.

If this is what the stats say then what is going wrong?

There are numerous and varied studies from distinguished sources to support this information, and research now indicates that in order to mitigate these risks a solid support structure must be put in place to on-board the new executive.  Whilst I advocate a 120-Day Plan supported by coaching or mentoring many experts suggest onboarding should continue for upwards of and beyond eighteen months. Indeed best practice models such as the onboarding at Johnson and Johnson show a verifiable ROI of upwards of 1400% – NOT just a small price BUT a massive payback!

Coaching and Mentoring can play a vital role in this payback as my own practice has demonstrated time and again.

The First 100 Days … the ‘Honeymoon’

In most walks of life there is a ‘honeymoon’ period and, for many years, new leaders and senior executives have had their ‘First One Hundred Days’. Pressure to deliver in today’s business environment may well have changed this.

Newly elected presidents, prime ministers, leaders in business and senior executives have, in the past, enjoyed this period of grace. It is still true that it usually takes about this amount of time before various ‘reckonings’ come into play. In today’s market with ever more impatient investors, stakeholders, internal and external critics and the heightened focus on speedy results are making this hundred days seem more like a trial rather than a honeymoon. The advent and proliferation of 24-hour news and the, now ever present, social media do nothing to limit this trial atmosphere.

Recruiting Managers demonstrate a bias time and time again!

In today’s modern world most recruitment is thorough but, I would argue, fatally flawed. Too much effort is put into the ‘process’ of recruitment and precious little focus is put on the support mechanism, an appropriate induction, under development of a clear vision and strategy that is focused on a high degree of certainty for success in the new appointment.

Too often organisations are recruiting highflyers from other competing businesses, making a big PR exercise out of the appointment and then, mistakenly, sitting back whilst the new executive faces an almost impossibly steep climb whilst becoming increasingly disillusioned in his/her new position and pining for his or her old company!

Put some support in – what’s stopping you?

In reality the creation and implementation of a transition plan and some form of coaching support that is put in place for the First 120 days will see both the success and survival of the new incumbent and, just as importantly, the profitable development of the organisation concerned. BUT far too few organisations do this!


PWC (2015) CEO Success Survey

Onboarding at Johnson and Johnson (independent research)

Leadership IQ. (2015)

Watkins, M. (2003 ) The First 90 Days. Harvard Business Press

About the Author:

Alan Denton specialises in working with executives in transition. Alan is an unconventional and daring executive coach & mentor. He provides a great balance of executive coaching & mentoring with deep experience as a leader & CEO of organisations. He specialises in working directly with Executives new to role. To read more of Alan’s insights and articles please Click Here