THE BOSTON GLOBE ON HOW TO REDUCE THE RISKS OF CRITICAL
This article contains interviews with
a Harvard Business School professor who has a book on the subject plus two
CEOs who have worked with Stybel Peabody Lincolnshire on critical leader
TOP FIRMS RETAIN SPECIAL COACHES:
Practice intended to smooth transition, increase retention
By Diane E. Lewis, Globe Staff, 3/9/03
Rather than risk the
expense of having top executive recruits fail, some US companies are hiring
coaches to ensure the success of new hires during the most critical period of
their tenure: the first 90 to 100 days.
Known as assimilating or
onboarding, the practice is being used at Fidelity Investments, Johnson &
Johnson, State Farm Insurance Co., Cisco Systems Inc., and others to increase
retention levels and help business leaders transition into new jobs faster,
said Michael Watkins, a Harvard Business School professor who helped
spearhead the trend.
In the wake of recent
corporate scandals, many companies are keenly aware that the fallout from a
bad hire can ripple across an organization and result in lost productivity
And turnover in the
nation's top managerial ranks remains high. Challenger, Gray & Christmas,
a Chicago retained search firm that tracks employment, reported last year that
corporate officers have left US firms in unprecedented numbers over the past
three years. In August 1999, when the company began tracking CEO departures,
32 resigned or were forced out. Today, chief executives step down at an
average rate of 79 per month.
''Studies show that
relatively high-level people coming into companies have a pretty high failure
rate,'' said Watkins, author of a book due out this summer titled, ''The
First 90 Days: Critical Success Strategies for New Leaders at All Levels.
''Typically, by the end of five years, two-thirds have failed. So, companies
are interested in knowing how to reduce costs and get people up to speed
This is especially true in
a down economy, said Jeff Durocher, director of market development at RHR
International, a team of 70 management psychologists who specialize in
workplace and business consulting. ''Companies do not have time to let people
fail anymore,'' he said. ''So, they are shortening the honeymoon period,
which means people are expected to hit the ground running.''
To do that, an executive from
outside a firm, or one promoted to a different division within, must learn to
navigate the corporate culture or political climate fast. ''They also need to
be in touch with key people, with support from the boss,'' Durocher said.
''And, they need to know which agendas to worry about and which ones to
Watkins maintains executive
recruits can maximize their success rates by learning how to build personal
credibility and momentum during the first three months. ''Transitions are
really critical times,'' he said. ''You are more vulnerable because you do
not know the politics or culture of the new organization. At the same time,
expectations are high that you will make something happen. So, to succeed you
must develop a reputation for being a quick study and then make small
After learning that her
predecessor kept detailed files on everyone and everything that took place in
the office, one new executive carted the files away. To those around her, the
act was symbolic: ''It meant that she was ready to take on small issues that
might have been irritants, repair damaged relationships and that she wanted
to be perceived as decisive, thoughtful, fair, and willing to listen,''
STYBEL PEABODY LINCOLNSHIRE
Ronald Goodspeed, a
physician and president of Southcoast Hospitals Group in southeastern
Massachusetts, gave a newly hired vice president who reports directly to him
an ''owner's manual,'' with key information about himself. In the one-page
primer, Goodspeed spelled out his likes and dislikes, his expectations, and
his goals. Goodspeed got the idea from Laurence Stybel, president of Stybel
Peabody Lincolnshire, Boston.
''In the first six months,
people are trying to get their bearings and figure out how to work with
you,'' said Goodspeed. ''So, if you can cut the amount of time it takes to do
that, the new person can spend more time on their assignment.''
To better compete in a down
economy, both retained search firms and executive recruiters are adding assimilation
or executive transition coaching to their menu of services. Executive
recruiters started the practice many years ago but moved away from it in the
mid-1990s when the pace and profits associated with executive hiring
Gordon Curtis, founder of
the eponymous Marblehead leadership and development firm, said search firms'
participation in the practice raises critical issues. ''For recruiters, the
service is like an extended warranty,'' he said. ''The company buys the
search and the recruiter guarantees the new executive's first 12 months. That
is one model for doing this. But corporations still have an arm's length
relationship with their search partners and do not necessarily want them to
dabble in their inner workings.''
Even so, the trend is
picking up. Executive search firm Heidrick & Struggles includes
assimilation coaching in its package of services. So does Korn/Ferry
International. Right Management Consulting, the retained search firm, is
offering a 90-day assimilation or onboarding coaching service.
corporate clients pay between $10,000 and $20,000 for onboarding, said Andrea
Eisenberg, managing principal of the New York region. ''When an executive
lands a job, we go in and talk to the new company about its expectations and
what it wants from the candidate,'' said Eisenberg. ''We call it KES - key
executive service - and we do it around the world.''
In some cases, newly
promoted executives contact coaches themselves. Shortly after Dr. Marylou
Buyse became president of the Massachusetts Association of Health Plans last
year, she hired Stybel. As the first medical doctor to run the HMO trade
association, Buyse was faced with setting a new course for the group, whose
eight members have 2.1 million health care clients in Greater Boston. She
said she wanted to make an impression quickly and help the organization
separate itself from the tarnished image HMOs had acquired in the press.
After consulting with
Stybel, Buyse changed the group's name from the Massachusetts Association of
HMOs to the current title. ''The change was symbolic in that it signaled a
new administration with a new approach,'' she said. ''It was substantive
because HMOs, rightly or wrongly, have gotten an unfavorable name.''
Stybel said that first
actions such as this are crucial, and a new executive needs to know how to
pick his or her battles.
Said Stybel, ''During the
first 100 days people give you the benefit of the doubt. They learn about you
by looking at how you respond to the inevitable pressures and stresses.'' He
said that by winning the first battles, ''you establish a platform for other
things. If you lose, someone is going to light a fire under that
platform. You may not burn today or next week. But the fire is
lit and you may not know it.''
Diane E. Lewis can be
reached at firstname.lastname@example.org.