We wrote a post about how to make a graceful exit (especially when it’s involuntary) that explored what steps to take when leaving your position. This post is the follow-up that dives into how to identify, assess, and consolidate lessons learned to find the right next job. We’ll explore three key steps to a successful transition plan for CEOs.
Public company equity-based pay practices, such as stock, restricted stock, and employee stock options are often a poor fit for private companies committed to reward leaders for performance and growth and to motivate leadership and capital succession.
Equity based programs that make sense and work well in a public company come with many ills for private companies: they can be costly, tax-inefficient, static, ineffective, and sometimes downright unfair. In the worst case, equity pay practices can derail the owners’ plans for growth and succession.
Dynamic synthetic equity presents a more tailored solution for private companies interested in leadership and capital succession. Restricted stock and employee stock options often distort outcomes for private companies. Consider that:
The underlying stock price in a private company gyrates as owners enter and exit from, for example, a living or a death buyout or even a recapitalization. Stock price can jump 50% – unjustly rewarding the owners of true equity awards.
Most people cannot listen until they have been heard. As a consequence, wise leaders who want to affect thinking and behavior learn to first be a great listener to those they aim to impact.
Holding back from jumping-in when a key point comes to mind in the middle of a fast-paced conversation can be a challenge but it is also essential in order to avoid being written-off as one who does not listen or understand, especially if the leader is new to the organization.
The following steps help a leader stay in-tune and attuned and dramatically improve their odds of success:
Pay attention. When someone talks, give undivided attention and do not interrupt. While s/he is talking you may think you know what s/he is going to say and what you want to say next rushes to mind. In that instant you experience an irrepressible urge to interrupt and jump-in. Following the urge causes many bright, successful senior executives to often unintentionally and repeatedly use the power of their position to hijack conversations. The pattern wears on those in the organization and soon the leader is written-off as one who never listens and who does not get, or care about, those s/he leads.
Don’t jump-in. Set thoughts aside in your mind or make a note of what you plan to share when the time comes. Force yourself, instead, to concentrate on precisely what is being said. Do not evaluate what is being said and do not begin to formulate a response. Just listen word-for-word with the objective to repeat back exactly what you heard to be sure you got it right. To force yourself to listen, try to write-down what is being said exactly as you hear it in the moment. Strive to hear and understand each word as well as the overall point being made.
Say what was said. When the speaker stops, ask for permission to repeat back what was heard. Follow with an opening phrase such as: “What I heard you say is:…” and then say back what you heard, word-for-word. When done, ask for confirmation that you heard correctly.
Many intelliven.com blog posts are based on the slides and lecture notes from a masters class in Organization Development called Organization Analysis and Strategy offered at American University and taught by Peter DiGiammarino. These posts and other material from class, including:
Slide shows, and
are available from Amazon as a softcover workbook or from iTunes as an iBook titledManage to Lead: Seven Truths to Help You Change the World.
Whether one wants to change personal habits, implement a new information system, improve a business process, get team members to work together, increase a community’s appreciation for diversity, or even to topple a monarchy, taking seven actions driven by seven disarmingly simple truths will individually and collectively help achieve the goal.
Manage to Lead presents a framework to describe and assess any organization. It also provides a structured approach to plan and implement next steps for an organization as it strives for long-term growth and performance.
Readers are invited to select a familiar organization on which to apply the tools and templates introduced throughout the workbook. Exercises in each chapter produce essential elements for the organization’s annual strategic plan and lay the groundwork for implementing that plan.
Readers can package the key elements from Organization Exercises to form a strategic plan that communicates how the organization sees itself and where it is headed. At the end of the year leaders can compare actual results with what was described in the strategic plan to study what happened, why what happened was different than plan, what is to be learned from that, and what to do differently going forward as a result.
Repeat the process over several years and compare actual to planned results year-to-year to see the organization mature, perform, and grow to its full potential.
Fast growing and otherwise successful organizations often outpace the rate at which they can groom and grow senior executives to keep up with the need to guide and govern increased scale and complexity of operations. Consequently, they bring top talent in from the outside.
As outlined in a previous IntelliVen post, a senior hire is hardly a path to guaranteed success. Similarly, a Harvard Business Review article by Jean Martin in 2014 reports: “Outside hires take twice as long to ramp up as a leader promoted from within. Astoundingly, C-suite executives report that only one out of five executives hired from outside are viewed as high performers at the end of their first year in house. And ultimately, of the 40% of leaders who are hired from outside each year, nearly half fail within the first 18 months. The direct and indirect costs of the failures are staggering, far exceeding the cost of the search that found the executive.”
Executive transition is hard for the receiving organization and for the entering executive. Fortunately, there are things both can to do increase the odds of success.
One of the toughest things for a senior executive to do is transition into an existing system of operation. At first, during the “honeymoon period”, a lot about the entering executive seems to incumbents to be new and different. It may at least be interesting, and at most exciting, to let the “new guy” operate with a high-degree of independence hoping and trusting that good things will happen especially given how much he or she is being compensated.