“Typically organizations work extremely hard to identify and hire new talent…but then rely on hope when it comes to making their investment successful.”Scott Saslow, Institute of Executive Development
One of the unexpected outcomes of the Covid-19 pandemic has been a great many people re-evaluating their careers, their current roles and the activities which are meaningful to them resulting in what is being called ‘The Great Resignation’. We now live in a culture that must embrace transition as the norm and the greater transience of the workforce means that more leaders than ever are changing roles and companies, hence the issue of successful leadership transition becomes even more important.
But why is it important? It is a shocking fact that around 40% of executives are pushed out, fail, or quit during their first eighteen months in a role, and two years after executive transition, between 27-46% are regarded as failures or disappointments (https://www.mckinsey.com/business-functions/people-and-organizational-performance/our-insights/successfully-transitioning-to-new-leadership-roles). This is perhaps not surprising once you realise that typically, 90% of the total cost of hiring a new executive is spent on the front end with only 10% spent on the back end such as structured onboarding and coaching support (https://www.veruspartners.net/wp-content/uploads/2018/06/Successfully-transitioning-to-new-leadership-roles-web-final.pdf). The war for talent is on, meaning that identifying, acquiring, and retaining talent is of key importance.
Many of us feel the impact of the past two years whilst living through a pandemic, when everything that was familiar changed and we had to flex and adapt to new ways of doing things; the landscape was recognisable, but at the same time, the way of living in this landscape was different and new. This is a great analogy for the executive taking up a new role; the skills and competencies needed are recognisable, however, the application within a different environment needs time, agility, and support. McKinsey defines executive transition as ‘the period (which can last up to 18 months) after an executive has assumed his or her new C-level responsibilities’, confirming that transition is not a single event, but a process.
A successful transition process is one that enables new leaders to become swiftly effective in their new role and to integrate successfully into the organization, it supports letting go of the old to identify and make way for the new. Without the right pillars in place, the transition process can easily be derailed and result in failure. The impact of a failed transition is not easily contained and ripples out to affect many areas. Firstly, there is the cost; research shows that a failed leadership transition can cost from 2.5 to a massive 20 times the executive’s yearly compensation (https://hbr.org/2017/05/the-biggest-mistakes-new-executives-make; https://www.ddiworld.com/blog/executive-transitions). This includes the investment in search fees, possible relocation expenses, signing bonuses and issuing of stock grants and options. In addition, a failed executive transition can have an impact on the business which lasts years, and when you consider the potential damage to the client base and brand reputation, and the impact on employee morale, not to mention the detrimental impact on the executive involved and the potential damage to their career trajectory and personal wellbeing, you have a situation which demands a solution.
The good news is that research shows that transition-acceleration coaching can halve the time required for new executives to become fully effective in their roles, and an experienced transition coach can increase the likelihood of successful transition by a massive 50%. (https://wabccoaches.com/2009/09/senior-leadership-transitions-what-makes-them-work-and-what-causes-them-to-fail/).
If you would like to find out more about our transition support and coaching for new leaders, contact us at email@example.com