Executive Assimilation: Improving the Success of Executive Appointments

INTRODUCTION

Each day around the world, hundreds of executives in all types of organizations move into new roles. In every instance, the organization expects improved success. And, the individual making this personal transition has high hopes for gains in knowledge, skills, prestige and, frequently, wealth. Many of these transitions are reasonably successful. Incremental improvements are made. Companies succeed a little better. And, individuals prosper. Sometimes executive transitions make an important impact, for good or ill, on the performance and prospects of a large enterprise. When Lou Gerstner came from RJR Nabisco to take the helm of IBM, many believed that the computer powerhouse had no options but to break itself up, that there was no way forward for the giant IBM. But a few years later, Gerstner was hailed for leading IBM to new strengths and successes not to a breakup. In Europe, Belgian Luc Vandevelde is leading a very challenging but promising turnaround of the venerable British retailer, Marks & Spencer. After taking the helm at the worst time in the firm's modern history, Vandevelde made some wrenching decisions but has put the company back in touch with its customers. He shed operations on the Continent, sold the American firm, Brooks Brothers, and focused on core strengths. He has sustained improvements in operations long enough to qualify as a major success.

At Donley Townsend Associates we have an opportunity to work with senior executives as they plan for and implement executive transitions at the top levels of business, higher education and government. From this vantage point we've talked in-depth with corporate CEO's, managing directors, board chairmen, university presidents, heads of government agencies, general managers and human resources leaders. We've gathered their thoughts about executive transitions, good and bad. Our perspective has been shaped by their views on the transitions of others and by their often intensely felt stories of their own transitions.

As we've gathered these stories, we began to look for the characteristics of highly successful transitions and, the characteristics of failed transitions. The stakes for an enterprise, the gap between a highly successful transition and a failed transition, are huge. While certain themes seemed easy to spot, a more rigorous investigation seemed warranted. Over the course of five years (1998 to 2002), we interviewed over three hundred senior leaders. The executives worked in a wide range of industries and included leaders from Belgium, France, Germany, Great Britain, Japan, Mexico, the Netherlands, Sweden, Switzerland and the United States. While often wide-ranging in scope, each of these interviews was structured to gather information about the actions the new executives took on entering new roles, and then to probe beneath the surface to determine which actions worked and which did not.

From these in-depth and revealing interviews, we distilled the essential elements of successful transitions and the practical steps of implementing them. Our view encompasses actions that highly successful executives take when they transition to a new role and actions that organizations take to help new leaders make transitions. Executives have been very open about what worked for them and many looked back on their career to describe how they learned from early transitions such as their first leadership role or their first general management role. We also found, somewhat to our surprise, that the executives we talked to were very willing to discuss the mistakes they had made in their transitions during their careers, how they learned from their missteps and what they will try to do differently in their next transition.

SIX KEYS

Our analysis points to six key transition hurdles; immersion, goal setting, building peer relationships, developing a cultural or political sensitivity to the new organization, finding the right external vs. internal alignment, and, finally, building a productive relationship with the boss. (See figure 1 below.)

IMMERSION

Immersion describes the new leader's first three to six months in a new role. During this period, an executive must master a tremendous quantity of new information about the specifics, the details of their area of responsibility. For a business general manager there may be a product line, its competitive strengths and weaknesses, new products in the pipeline, factories with labor problems, etc. For a university president, there may be a curriculum to build, funds to be raised and the competitive threats of distance learning and expanding for-profit educators. For a government agency head there may be intricate legislation to master as well as complex relationships with other agencies to learn. In every case, whether through promotion, transfer or appointment from outside, new leaders in executive positions face a daunting amount of information to master.

In the most successful immersions, the new executive commits the time and energy to dig into the details of their new organization and beyond that to the underlying technology, products, services and laws. One CEO of a well-known Silicon Valley technology firm, recruited from an outside firm, studied up on the underlying technology of his company's products by reading the graduate textbooks on the appropriate engineering and scientific subjects. Most general managers spoke of the need to learn by seeing. One CEO mentioned that he learned early on that "a desk is a dangerous place from which to watch the world". Successful transtitioners go out in the field "to work beside people who work at the customer facing level". Another CEO (of a Fortune 100 energy firm) prepares individualized "90 tasks in 90 days" To Do lists for all new subordinates. Each of these lists is carefully tailored to provide both breadth and depth learning as well as introductions to key external relationships. And, importantly, this effort on the CEO's part endorses the immersion period. During the immersion stage, executives typically begin with a focus on their immediate responsibilities then move to an understanding of the influencing factors; they move from technology, to products, to markets to trends or from understanding the plant managers, to labor contracts to overall labor relations to comparative manufacturing costs in other countries.

The immersion period for highly successful executive transitions also naturally includes meeting and learning about a wide variety of people. This includes bosses, subordinates and peers. During the immersion phase, the first three to six months, new executives must carefully assess their subordinates and, in many cases, they must assess candidates for key subordinate positions. This learning process is fraught with emotional issues and undertones. New subordinates frequently include disappointed aspirants for the new executive's position. Often there are old or existing rivalries between subordinates who will want to pursue their own goals and ambitions. These same individuals will have different evaluations of the on- going work of the organization. How do the successful transitioners make their way through this?

They often begin with one-on-one meetings with each subordinate. In these initial meetings the new executive asks about the subordinate's role, objectives, key projects and, very importantly, aspirations. These conversations enable the new executive to gauge individual talents, understand the working structure of their organization and the level of collaboration. The best transitioners follow these meetings with discussions further down their organization. They may hold brown bag lunches with small groups to meet supervisors and individual contributors. In some cases they conduct skip-level, one-on-one meetings. As mentioned above, successful transitioners spend time with the people who do the day-to-day making, selling and servicing.

The most successful transitions also include reaching out to people outside their organization whose views could be helpful. These outside contacts help new executives quickly sift the true from the somewhat true. Conversations with outsiders…friends, bankers, attorneys, auditors, consultants…help the new executive organize the learning, to make sense of the tremendous amount of new information. The key element of the immersion phase is learning the facts, the details.

Organizations can (and some do) provide a roadmap. The most helpful provide access to information and introductions to key individuals. Some appoint a formal or informal sponsor to provide a sounding board on interpreter…someone who can provide helpful context for the new executive. So much of a successful immersion depends on the new executive because learning styles are so personal. But, the most successful transitions belong to those executives who spend the extra hours to pour through reports, literature, policies, processes…all the nitty-gritty of their new responsibilities during the first three to six months.

GOAL SETTING

Goal setting refers to the process whereby a new executive develops, communicates and gains support for a new vision for the organization. The goal setting phase of an effective transition is the new executive's opportunity to establish and communicate a broadbrush look at a better future. While detailed strategies, tactics, programs and plans take awhile to shape and unfold, the most successful executives move quickly to articulate in broad terms how the future needs to differ from the past. Once the broad themes are in place, they can move on to the more discrete objectives with a visible context. Few if any executives these days come into a new role with a mandate to keep things as they are. Organizations expect leaders to take action to make things better. And, the time horizon for making improvements is growing shorter. At the executive level, new leaders generally enjoy a fairly broad mandate. It is up to them to translate this mandate into the specific programs, initiatives and measures that they believe will lead to the fulfillment of their mandate. In the late 1980's Thomas Gilmore noted that "leaders absorb uncertainties and transform them into directions that give meaning to the work of others". Executives who make the most successful transitions focus carefully on setting and communicating their goals and they visibly lead the work of translating goals and themes into specific, detailed programs for each area of their responsibility.

Frequently, this work begins before they formally assume their new responsibilities. One senior operations leader for a semiconductor manufacturer spent his flight time between California and Europe developing the high-level goals for the troubled plant he was sent to turn around. He knew he needed to strike an ambitious tone to help galvanize the organization for the hard work ahead. He knew that big improvements were needed to justify the investment made in the facility. His initial goal setting communicated the size of the task and provided the framework for dozens of specific objectives for the departments of the plant.

Once onboard in their new roles, the most successful executives articulate some key themes repeatedly as they begin their immersion work that includes detailed reviews of the programs and plans currently underway in their new organization. This approach contrasts markedly with executives who have unsuccessful transitions in which the executives tend to repeat their key theme until it becomes almost a mantra; they frequently omit the detailed work of aligning discreet objectives with their vision.

Once they've established an overarching goal, successful transitioners begin their goal setting work with a careful review of current plans and programs in their organization. This process provides them with opportunities to meet individually again with key subordinates and members of their organizations. In the goal setting phase, the new executive learns how goals have been set and the assumptions behind those goals. He/she begins to develop relationships with subordinates and some of their subordinates, which move beyond the scope of the fact finding in the immersion phase. The new executive also begins to develop a sense for what his organization is capable of, how far it can stretch. The most successful executives want to know right away their new organization's strengths and weaknesses.

As the detailed review comes to a close, the successful transitioners gather their organizations to revise and update their goals and plans. They frequently introduce new measures, key indicators of how well their organization is meeting their new goals. Frequently, the most successful new executives use this forum to begin disclosing more about themselves. They provide information about who they are, what they hope to achieve, how they manage, what's important and what's not. They also work to learn more about the key people on their teams. They seek to understand their histories, goals, personal values and aspirations along with their views on the organization. Then they link the new goals and objectives to the overall theme they communicated in the beginning.

BUILDING PEER RELATIONSHIPS

Successful executive transitions are broad as well as deep. In fact, one of the key differences between successful and unsuccessful transitions is breadth. The most successful executives reach out energetically to build strong, positive relationships with peers. Less successful executives focus vertically on their boss and their subordinates.

How then do the most successful transitions do the work of building relationships with peers? The answer depends in large part on the role the executive is entering. Those coming into staff functions have the advantage of positions that naturally provide services to other parts of the larger organization. One top human resource executive at a medical instruments firm in the Midwest noted that a key element of building relationships with his peers was providing an especially high level of service to their requests during his first few months. He followed through personally on their requests increasing his opportunities for interaction with them and providing him with insights on the performance of his key subordinates and his organization. He recognized that performance on the more mundane things served to build his credibility. Another executive, entering one of the world's largest financial services organizations in a role with great influence over executive succession and development realized that she could and would be viewed with suspicion by many in the company's top ranks. Recognizing the sensitive nature of the role, she built trust by asking her peers for advice and counsel. This approach tapped a vein of helpfulness that was a strong part of the company's culture. It also flipped expectations. By seeking advice rather than giving it, the new executive found that her peers opened up readily. She established productive relationships and her peers "voted her in".

Executives entering general management or line roles have a tougher time. One executive in our study joined a large Midwest based retail company to head Logistics & Distribution. His organization was formed by taking these functions away from the divisions where they had historically resided and centralizing them under his leadership. Not surprisingly, he faced some obstacles to building strong relationships with peers who felt they had lost something to him. Because he was brought in to make major improvements to the logistics and distribution functions, he possessed in-depth technical expertise. Recognizing that this could become a disadvantage in his efforts to both make improvements and build relationships, the new executive framed each of his initiatives for each product division demonstrating the positive impact it would have on that division's performance. This approach meant extra work for him and his people to prepare financial analyses and presentations broken out for each division. But, it provided a way for the new executive to build relationships through one-on-one meetings where he talked about his initiatives and showed the impact. These meetings allowed him to triple check his facts and gauge potential opposition. He was able to sense what might make his peers defensive. In this way, he was able to accomplish what he had been hired to do and be accepted as part of the senior team.

In another instance, a fast growth high technology firm in the Southwest hired a Vice President/General Manager to lead a new state-of-the-art engineering and manufacturing facility. The new executive was superbly qualified through experience, industry knowledge and drive. He also possessed exactly the management style the president wanted for the new facility, a project that represented a significant capital investment. The new executive concentrated on building his organization and on his relationship with the president ignoring his peers and the group executive between him and the president. The president called him frequently, listened to progress reports and praised his efforts. His subordinates took readily to his approach and the opportunity afforded by the company's investment in the facility. Morale, energy and engagement on new objectives were all high. Yet, when he encountered some inevitable and normally manageable bumps, he had no allies among his peers. Within 14 months he was fired; the new facility's workforce was demoralized and relationships among the company's top six executives were visibly damaged.

Many line executives and general managers note that disparate locations and different businesses can make building peer relationships more difficult. However, the executives with the greatest successes in new roles use every means available to reach out to peers. They look for opportunities for social interaction as a way to build peer relationships; they use conference calls and emails. They seek opportunities to use task forces and other ad hoc structures to bring them into contact with a broad range of colleagues. Successful transitioners have realistic expectations about peer relationships. One senior executive in a top manufacturing job said, "In a couple of cases it's like oil and water. I don't mix well with two peers; I have good relationships with most; and there are two or three where I've made great relationships quickly. I accept that not all of them will be great".

Developing Cultural & Political Sensitivity

One CEO who successfully negotiated transitions into four large public companies during the course of a distinguished career summed up his experience by saying, "one thing is for sure; don't underestimate the differences in company cultures. They are more different than they are alike. In a way what helped me the most was learning from early mistakes. I learned not to come in with a ‘missionary complex', thinking I was smarter than I was". Another CEO noted that every organization has a certain momentum when you join it and if that momentum is, on balance, positive, then, you must make your ideas somewhat compatible with the momentum. In his experience this meant taking the same care in selling ideas inside the company as he would in addressing a major opportunity with a prospective customer. In addition, he tried to find influential individuals to help champion new ideas. He summed up his ideas by noting that even when you are in one of the top jobs, you must sell your ideas and "there better be some meat on the bones when you introduce them". He expanded on the selling notion by noting that he liked to view objections or resistance from individuals similar to the way he would with a prospective customer, as an opportunity to fully understand their views, learn from their perspectives and modify his views where needed. "Even with opposition you must believe in your ideas and keep coming back and selling them in a way compatible with the culture".

Developing cultural and political sensitivity is easier for executives whose roles put them in regular contact with customers, suppliers and other outsiders who know the company. These outsiders provide insights about the organization that take much longer to acquire from insiders. This is a key finding for executives entering new organizations in staff roles. Among CFO's, CIO's, General Counsels, HR leaders, etc., the most successful are those who spend time with their companies' customers and suppliers as well as in the field or plant with the company's sales, service and manufacturing workers.

Political sensitivity means learning how decisions are made and carried out within the culture of the organization, how the work is actually done. Successful transitions go to executives who link their initial successes to issues where others win as well. Successful transitions also go to executives who do the work of immersion and goal setting well. Executives who depend on cultural change as their key leadership tool seldom enjoy sustained success.

Internal/External Alignment

At and near the top of organizations, the web of important relationships with people outside the company expands significantly. After a career of working inside an organization and dealing only with slices of outsiders, executives near the top find their schedules brimming with business and social meetings with customers, suppliers, lawyers, bankers, civic officials, politicians, regulatory consultants, strategy consultants, accountants, public relations consultants, investor relations consultants, etc. There are also requests for their time and attention from cultural and philanthropic organizations. In a number of cases there are outside board memberships that require time and attention. For any new executive the time management challenge can be daunting. For an executive coming from the outside the challenge is even greater. At first there are the challenges presented by their immersion phase. Then there are norms to learn regarding outside board memberships, cultural and philanthropic endeavors. Frequently, the differences can be large.

One business school dean who came from industry was thrown off track for months by these differences. He brought a set of assumptions from a highly successful career in a Fortune 100 firm. All his experience was in a culture that stressed deep concentration on improving your own organization before engaging outside the enterprise. First one, then the other was his viewpoint. He set out with vigor to improve the business school based on the problems and challenges identified during the selection process. For him it seemed normal to refuse invitations he viewed as social or ceremonial while concentrating on a turnaround. Because he was the first business leader to take a key role at this university, months went by before he, the president and the provost identified the situation and arrived at an understanding. The president, provost and trustees wanted an action-oriented leader. The new dean wanted very much to succeed in this new role that he viewed as an opportunity to give back to a business world where had enjoyed great success. Finally, the three glimpsed the problem. For the university community, the events the new dean saw as social were part and parcel of how work got done. The organization wanted broad engagement even though it meant a slower turnaround at the business school.

After this painful transition, all the people involved had a keen appreciation for the importance of understanding an organization's norms about the external/internal balance for top leaders. Unfortunately, the interviewing and selection processes in most large organizations avoid discussion of relationships with outsiders focusing almost exclusively on job related issues and inside the organization topics.

External relationships are important at the upper levels of any organization. When an executive grows up in one company, there are usually informal mentoring mechanisms used to introduce rising executives to appropriate external connections. Executives coming from outside, through recruitment, acquisition or assignment to a joint venture, need to explicitly learn the new organizations ropes and then make appropriate time for external relationships.

Boss Relationship

Through the selection process, hiring executives and candidates for executive positions play out an elaborate ritual of behaviors designed to fill a position with a person of outstanding capabilities. Once the selection process is over and the new executive starts, a new relationship must be built. The new executive must understand and respond to the boss' way of working. Frequently, the switch from candidate to employee and the different behaviors required shocks new executives.

Most executives coming into new roles pay particular attention to their relationship with their boss. Almost everyone intuitively grasps the importance of understanding their boss' expectations and acting on them. Our experience indicates that at the upper level of organizations, building a solid relationship with one's boss is far more than just carrying out tasks and making improvements. One division president who shared his experiences on several transitions, summed up his learnings with the conclusion that "building trust' is the essential ingredient. This requires delivering on commitments, demonstrating that you are learning your role and the challenges you face. It also means moving beyond defined roles to become a person others rely on for counsel and an objective viewpoint.

For those in the top executive role whether president, CEO or Managing Director, there is the complex challenge of reporting not to an individual but to a board of directors or trustees. (See figure 2 below) Aside from the obvious multiplicity of relationships there is the very limited and formal interaction inherent in conversations scheduled months in advance for a set, limited time and following a prearranged agenda all under the influence of by-laws and statues. It's a tough environment for anyone to build productive relationships in. Recent legislative changes and new exchange requirements in the United States have made it even more challenging and time consuming for the CEO's of U.S. public companies to build these relationships with the individuals on their boards.

Conclusion

Transitions take place everyday. New leaders take over. Organizations and individuals want and need for these transitions to lead to improved operations and results. Our work with top leaders shows that those with the right skills can indeed make a significant positive impact on the enterprises they lead not just incremental improvements. Clearly, leaders who possess good transition skills will have opportunities never seen by others.

For information on Executive Assimilation Coaching please contact

Donley Townsend Associates, LLC
One Galleria Tower
13355 Noel Road, Suite 500
Dallas, TX 75240

v. 972.720.6226
f. 972.628.3795

info@donleytownsend.com

(Figure 1)

CEO Relationships During Transitions

(Figure 2)

Relationships for new CEO’s are especially complex. Organizationally, they have no peers; all of management are subordinates. Instead of one boss, they have a boardroom full. If they head a public company, there are laws that increasingly govern their relationship with the members of their board. Heads of government agencies and universities similarly face situations in which their relationships with their organizational superiors are governed by laws and by-laws. These aspects of the job make effective transitions especially difficult. Frequently, in our interviews with executive in the top position, we heard the admission that they had not given the time and attention to board relationships that they should have. More than one CEO felt that he had been fired once because he did not develop the right relations with board members focusing instead on their managerial role as the chief executive and neglecting their role as board member. From those top executives who learned how to excel at this aspect of the job we distilled these five keys to successful transitions vis a vis the board of directors.

1. Discuss governance issues individually with each director. Uncover their views on what should be started, what stopped and what continued. Let them know your views. Follow through with discussion and changes at an early board meeting.
2. Discover the strengths and interests of individual board members and engage them in something that aligns with their interests and abilities. Help them make a contribution.
3. Improve the quality of communication going to board members. Put your own stamp on it.
4. Use site visits and retreats as opportunities to deepen relationships between board members and senior managers.
5. Realize that educating and developing directors is partly your responsibility. Take the lead for continuous improvement in the work of the board.