Integrating New Execs Takes More than Name-Plate Changes in the C-Suite

By Tim Ruef Dec 3, 2008
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Janet called the day before she resigned. A senior executive at a major pharmaceutical company in New Jersey, she had joined the firm only two years before. “I suppose I thought they would just do a little more to make me feel welcome,” she said. “There was so much ‘romance’ during my recruitment. Then all of a sudden it was ‘sink or swim’ when I walked in the door. I buried myself in work just like always, but it didn’t work here,” she went on. “The culture was just too different. I eventually set up internal networking meetings, but it was too little too late.”

Unfortunately, similar scenarios are all too common among executives placed at major corporations. Numerous surveys have found that between 30 percent and 50 percent of executive appointments end in termination or resignation. The impact on the individual is significant. It's costly for the organization, too.

In research conducted in 2004, Bradford Smart, author of the book Topgrading, showed that “mis-hires” in the salary range of $100,000 to $175,000 cost companies an average of 15 times their base salary. His earlier research showed that company costs for mis-hires for positions such as a vice president, president and CEO are even higher as the salary of the hired executive escalates.

So why do such a high percentage of new executives fail to achieve expectations? Looking past obvious explanations, such as bad hiring, ineffective hiring managers and ill-defined job responsibilities, the cause might be the lack of a good executive integration plan.

Integration Plan?

As it turns out, very few organizations have any type of executive integration plan. Michael Watkins, founder of Genesis Advisors and author of The First 90 Days, believes that “surprisingly few managers receive any training in how to transition into a new organization, diagnose the company, and align strategy and skills.”

And even if the organization has an executive integration plan, it might be worthwhile to gauge its effectiveness periodically. RHR International in Wood Dale, Ill., conducted a study that found that only 39 percent of more than 100 executives, from senior managers to CEOs, interviewed over a two-year period were satisfied with their organization’s efforts to integrate them.

Effective integration is fast integration that, in turn, leads to increased productivity and cost savings. Watkins estimates that it takes mid-senior managers an average of 6.2 months to reach a break-even point, or the point at which their contribution to the organization begins to surpass the company’s costs of bringing them on board.

“Anything you can do to shave the transition time is going to make a difference,” says Watkins. “Reducing the ‘ramp up’ by even one month can mean a bundle.”

First Steps to Assimilation

So what can HR professionals do to help quickly maximize the potential of a new executive? It all begins with a good integration plan.

This should not be confused with an orientation program, however, which is typically a one- to two-day activity focused on filling out benefits enrollment forms, touring the facility, and understanding company history and values. Executive integration should be a purposeful program tailored to individual needs and designed to assimilate a newly hired manager or executive effectively over a matter of months.

If, like many companies, your organization doesn’t have a workable plan, the most important things are to get started and keep it simple. Establish a timeline for achievements, including key milestones. Remember, too, that while the design of an integration program is normally considered to be the responsibility of the HR department, the hiring manager also must be intimately involved in carrying it out. In fact, the importance of effective executive integration must be embraced across the company at all levels if it is to be successful.

Attitude Check: Feeling Important

When developing or updating an executive integration plan, remember that it’s crucial to make the new hire feel important and wanted. Even senior executives want and need attention.

The process of leaving one organization for another can be an excruciating ordeal. Executives rarely arrive at their new company without lingering doubts about the wisdom of their decision. It is critical from day one that the new executive feel appreciated and valued at the new organization.

David J. Williams, executive practice manager for the Recruiting Roundtable, contends that one of the most important things to accomplish during the post-offer stage (second only to communicating the importance of the job) is to “make the new candidate feel special.”

Beverly Kaye, co-author of Love ’em or Lose ’em, and Getting Good People to Stay says it is important that the hiring manager “really connects with the new hire in a deeper way. The hiring manager has to get to know the new hire—who the new person is and what he or she wants.”

Put another way, it is important to relate to the new executive as if the recruiting process were still happening. Managers often forget that candidates are choosing an organization, just as the organization chooses them. And their process of evaluation goes on long after the offer letter is signed.

Structuring meetings between the new executive and the hiring manager need not be complicated or time-consuming for the HR professional or the manager. Point out to the manager that often just taking time out for a cup of coffee and asking how things are going will do the trick.

In his book The 7 Hidden Reasons Employees Leave, author Leigh Branham cites a lack of recognition, lack of feeling regarded as a valued asset, and lack of regular open and honest communication as key factors that cause employees to disengage. Sincere, regular conversations will make new executives feel as though they are being recognized and respected and that the company is investing in their successes.

Making the Right Connections

It is critical that newly hired executives build strong intra-organizational relationships. A systematic plan for orientation meetings with departmental and cross-functional colleagues should be set up before the candidate arrives for the first day of work.

Interestingly, while some new executives and managers will embrace integration as a chance to fast-forward their career, others will not see a need. Remember that the company strives to hire highly qualified, successful people who might expect that their success in their previous firm will translate automatically to success in their new position. As with Janet in the previously noted scenario, it is often hard for them to see the importance of understanding the culture and politics of a new company. And HR can’t expect that they will ask for assistance.

This mind-set is reinforced if, during the initial meeting with the new executive, the hiring manager has outlined challenges that need to be dealt with immediately. Still, be firm about the need for networking meetings and enlist the support of the hiring manager to make sure they occur. Supervisors must appreciate that time spent on effective integration now will greatly enhance the chances for success later.

Tim Ruef is a vice president with the New Jersey-based executive search firmMichael E. Marion & Associates. He can be reached by e-mail attruef@marionsearch.com.

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