Tag Archives: executive transition

Transition Plan for CEOs

What To Do Between Your Exit and Next Position

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.

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Paying Fair: Four paths to fair pay and succession for private venture executives.

Synthetic Equity Cover - Paths to fair pay and successionBackground

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.

Continue reading Paying Fair: Four paths to fair pay and succession for private venture executives.

How a new executive earns respect by listening until s/he can be heard.

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.

Continue reading How a new executive earns respect by listening until s/he can be heard.

Introducing Manage to Lead: Seven Truths to Help You Change the World as an interactive digital workbook.

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:

  • Work problems,
  • Templates,
  • Graphics,
  • Slide shows, and
  • Assessments

are available  from Amazon as a softcover workbook or from iTunes as an iBook titled Manage to Lead: Seven Truths to Help You Change the World.

Selected intelliven.com blog content is now available as a workbook from Amazon or as an iBook from iTunes.

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.

How entering executives can increase the odds of successful transition.

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.”

The Usual Case

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.

After six months or so the honeymoon is over and results start to speak for themselves.

Rarely is everyone happy.

Differences that once made the entering executive seem interesting now make him or her seem odd. Incumbent executives sour and adopt a wait-and-see attitude, leaving it to the entering executive to sink-or-swim on their own thereby increasing the odds of failure. In the worst, and all too common, case some incumbents ostracize and/or try to accelerate the entering executive’s demise.

The story is much the same from the perspective of the entering executive. At first, there is an exhilarating air of difference.  Everything is new and exciting with much to figure out and to absorb. The opportunity to have a major positive impact induces what seems an endless rush of euphoric excitement. All too soon these feelings devolve into isolation and loneliness along with the realization that no matter what good is accomplished, everyone will wonder why there was not more.

Recommended Approach

A programmatic approach to new executive transition does not guarantee success but it increases the odds and shortens the time frame in which it is achieved. The objectives are to:

  • Raise the incumbent team’s individual and collective consciousness as to what the entering executive is to accomplish and the definition of success in the first six months, in the first year, and beyond.
  • Turn incumbent executives from observers to stakeholders in success so that their energy, wisdom, insights, and ideas are constructively channeled to work with and for the entering executive rather than evaluating, but not contributing to, success.
  • Accelerate the entering executive’s learning curve and integration into the organization’s leadership network.
  • Promote interest in, and commitment to, the entering executive and his or her vision for the organization’s future

The result is to make the entire team accountable for success, not just the entering executive.

Conduct pre-meetings to promote Relationships-That-Work: The entering executive first meets offline at least twice with every direct report and key members of the leadership team, one-on-one for a couple of hours, in order to open a channel of communication and to begin to develop a relationship and build trust with each team member.

This is done before official work business needs to happen between the two, perhaps in the weeks prior or just after starting in the new role. Meetings should be off of the worksite and in a low-stakes venue that appeals to the person with whom the incoming executive is meeting such as a leisurely lunch or dinner, a golf outing, a walk in the woods, etc.

It is not possible for a new leader to effectively take charge without knowing the people who work directly for him or her. The same goes for working with key stakeholders. Pre-work meetings are to open channels and begin to get to know each other. The executives also verify that they can see themselves being an important person in each other’s lives.

Subordinates that the entering executive cannot fathom getting close to may as well be let go right away because it never gets easier as time marches on. Similarly, incumbents that feel they will just not be able to have a productive relationship with the entering executive should raise and deal with it sooner rather than later.

As the incoming executive starts to work full-time, the opportunity to open constructive channels of communication declines markedly due to day-to-day pressures. This makes it harder to develop a productive relationship and all the more difficult to ever work well together.

Give Guidance not Orders: The safest approach for subordinates reporting to the entering executive is to find out what he or she wants and then do it. Unfortunately, this is sure to backfire. The entering executive needs to make clear that no one should ever do anything just because he or she said to do it. Instead, everyone should do what they do because they believe it is the right thing to do, they want to do it, and they agree it should be done.

Help and Impress: The incoming executive needs to earn the respect of each team member and direct report. Until the incoming executive greatly helps or otherwise impresses each incumbent, there will persist an element of doubt that torments, and possibly sabotages, their working relationship. The incoming executive should consciously seek, find, and deliver on a way to help (or otherwise impress) each incumbent as a gesture of genuine kindness and support, asking nothing in return. If the incoming executive tries too hard, tries and fails, or is pompous, the odds of success are reduced.

Engage in Critical Business Activity:  The incoming executive surveys what is going on across the organization to select a high-stakes activity to become integrally involved with; such as a key sale or a difficult client, delivery, or product development challenge. The project provides a foil for the incoming executive to:

  • Work with strong people from different parts of the organization on something important.
  • Learn how the best people get things done.
  • Find out who knows what.
  • Experience firsthand how things come together in the clutch.

It also gives the entering executive a chance to make a contribution to the organization and earn a reputation for leadership and success while providing input towards developing a well-grounded picture of the way things work currently and an outline of how things need to work in the future.

It may at first seem wiser for the entering executive to help out on a small, simple effort rather than something big-and-hairy out of the gate. It turns out that doing something small does not teach much about how the best of the organization gets put to work, is not very visible, and simply does not matter much. The better strategy is to learn all there is to know from pitching in on something big and important as soon as possible.

Operate with ExcellenceThe entering executive also establishes a pattern of excellence in operations characterized by:

  • Clarifying what they seek to accomplish, why, when, and how.
  • Having a team of strong players with complementary skills who thoroughly enjoy working together to accomplish their common goal as described in this post.
  • Clarity with respect to performance metrics that will be tracked to know how well things are progressing towards stated goals and then driving to design, build, and put in place processes to routinely collect, organize, analyze, and present performance data in an easy to manage fashion.
  • Installing systems for performance goal setting, performance appraisals, salary reviews, incentive compensation awards, personnel resource allocation, and professional development.
  • Having routine oversight, guidance, and direction to selected programs, projects, and key personnel.
  • Being prepared for, attending, and participating in leadership forums such as executive team meetings, operating meetings, and initiative reviews.
  • A pattern of stating goals and performance projections followed by actual results consistently meeting or exceeding goals and projections.

Executive Session: At about the three-month mark, the entering executive prepares and presents a summary of what he or she has done, seen, and begun to envision to that point. It is too soon to have done much and certainly no one will expect everything to be sorted out yet so there is a lot of leeway. On the other hand, it is long enough that there should be some good data and thinking going on and it is time for the hiring manager and stakeholders to review that thinking and to nudge it in the right direction if it is off base.

The hiring manager calls the meeting and ensures, ideally with the help of a trained facilitator, a safe space is created. They work with the incoming executive to prepare and to facilitate the briefing session to ensure incumbents are interested and helpful and that the incoming executive:

  • Puts their  best foot forward
  • Listens carefully to questions and guidance from the group
  • Completes action items in a timely manner.

In three more months, roughly at the six-month mark, the entering executive ought to have a pretty good handle on what they think they can and should do to deliver on the promise to make a major contribution. The next executive session is held at the half-year mark for the incoming executive to lay out:

  • How things are now.
  • Why things need to change.
  • How things will be when they are changed.
  • What they plan to do to affect the intended change.
  • What will be hard about making the envisioned changes.

This leads to a rich discussion about whether the incoming executive’s perception of the current state rings true, whether the reason for change and target state are agreed to, and a discussion as to whether the planned initiatives are right and what it will take for them to succeed.

If things are off track, the incoming executive takes the guidance and goes back for another try and another review in at most a few weeks. If it is again off-track then it is probably time to wonder if the incoming executive is in the right role. On the other hand, when the session reveals solid thinking, analysis, and plans that are on track for success then the hiring manager provides further guidance as for any other executive as outlined in this post.

Bringing in top talent from the outside to keep up with success is never a sure thing but organizations that work at improving their odds of success put themselves in position to perform disproportionately better than most. More well-developed organizations that have the scale, resources, and stakes to justify so doing may want to augment the suggestions above with an even more aggressive Executive Transition Support Program to further enhance their odds of success.