- The annual CEO Success Survey by PWC revealed that turnover among CEOs at the world’s 2,500 largest companies soared to a record high of 17.5% in 2018 — 3 percentage points higher than the 14.5% rate in 2017 and above what has been the norm for the last decade.
- 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 — just 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. This means investing in 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. As an executive coach specialising in this all-important transition period, I have a proven track record in supporting businesses and professionals to make sure the first 120 days of a key hire’s tenure sets the tone for success.
The importance of investing in future success
There are numerous and varied studies from distinguished sources to support this information, and research now indicates that to mitigate these risks, a solid support structure must be put in place to onboard the new executive. Whilst I advocate a 120-day plan supported by coaching or mentoring, many experts suggest onboarding should continue 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 too!
Coaching and mentoring can play a vital role in this payback as my own practice has demonstrated time and again.
The honeymoon from hell? 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’. However, pressure to deliver in today’s business environment may well have changed this period of relative grace.
It is still true that it usually takes about this amount of time before various ‘reckonings’ come into play. In today’s market, ever more impatient investors, stakeholders, internal and external critics combined with a heightened focus on speedy results are making this hundred days feel more like a trial rather than a honeymoon. The proliferation of 24-hour news and social media do nothing to limit this trial atmosphere.
A plan beyond the process
Today, most recruitment is thorough but, I would argue, fatally flawed. Too much effort is put into the ‘process’ of recruitment with precious little focus put on the support mechanism, an appropriate induction and the development of a clear vision and strateg focused on a high degree of certainty of success in the new appointment.
Too often organisations recruit high flyers 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! At The Results Centre, we work with companies to put in place people development programmes designed for the new appointee, the team and the business as a whole to benefit from the new hire.
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!
Alan Denton 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 find out more about Alan’s executive results-driven coaching services please visit www.alandenton.co.uk.
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