The Executive Entrance
July 29, 2008
Most companies don't offer onboarding programs for new executive hires, but they should. Here's why and some tips for success.
By Steve Fall
It may seem hard to believe, but 40 percent of executives who join organizations in key positions fail. Charlie Bishop, founder and president of Chicago Change Partners, calls it "the American business world's dirty little secret."
It's also a costly secret. Tom Mallory, president of Atlanta-based executive search firm Acadia Associates, estimates the cost of bad executive hires at six times their annual salary.
Much of this could be avoided, according to Karen Benjack Glatzer, founder and president of GH Consulting in Sandy Springs, GA.An executive's failure to succeed in his or her new role often has little to do with job skills or functional talent. "Usually when executives don't make their second year anniversary, it's because they haven't known how to or haven't been given the right kind of help to become organizationally savvy," says Benjack Glatzer.
That's where onboarding comes in. Onboarding trains executives on the culture and politics of their new company. It helps them gain the support of their peers and form alliances. However, despite the benefits, most companies don't offer onboarding programs for new executive hires. "Recruiters drop them off at the front door," says Bishop. "Then human resources gives them an orientation and lets them go. I've had people say, 'Let cream rise to the top' or 'Give good people the keys, and they'll take care of things.' Well, that's not true. You have to give them some help, especially because you have so much at stake with the money you're paying them."
If a company elects to onboard, one tough decision comes before the process even starts. It must decide whether to handle the task internally or bring in a trained professional. While the company could have the capability to onboard with existing resources, it may not be the most efficient use. "If a company goes outside, though, it has to be clear that the onboarding person understands the culture," stresses Benjack Glatzer. "Are they going to work well—not just with the executive getting onboarded—but can they establish quick and deep rapport with all the stakeholders?"
Eighteen months ago, Michele Crocker, vice president of worldwide distributor optimization for Herbalife International, established an executive onboarding program called "The First 100 Days Hit the Ground Running Work Plan." While Herbalife hadn't experienced any problems developing executives, the company felt it should focus more attention on that initial 100-day time frame. The program takes a structured approach focused on three vital areas.
"The first one is ensuring that they establish solid people relationships early on with their team, peers, key internal and external customers, and any global business partners," says Crocker. "We also put a lot of emphasis up front on understanding the philosophy, the culture, and how we operate as a company. The other area we look at is operational: how the functions work and the executive's role in Herbalife's success."
Herbalife, which has 3,800 employees worldwide, has new executive hires spend time with the head of each function. Crocker describes it as nothing like a typical "meet and greet." Instead, they prepare several robust questions for everyone who meets with the executive. "We work with them to develop the right questions, so the executive gets on board understanding the big picture and how the moving pieces all fit together," explains Crocker.
Every 30 to 45 days during the program, Herbalife also conducts a progress check with the new executive and some of his or her teammates. Crocker believes that if somebody's not fitting in culturally, it's best to learn that early on. They discuss how the program's working with the executive, and determine whether to any make mid-course adjustments or focus on other areas.
"Onboarding is also about helping an executive get his team excited about having a new boss," says Benjack Glatzer. "It involves helping that executive assess the team he or she's inherited, and build bridges with peers. That's a tough task."
Frank Maguire, now chairman of Maguire Communications, saw the value of onboarding when he served as chief personnel officer for Federal Express. He believes three questions from the executive must be answered early in the onboarding process: What do you expect of me? What's in it for me? What are the limits of my authority? "Those are the three things I addressed when I brought people on board," Maguire says. "I made sure the expectations from both sides were understood and discussed in detail, the rewards were clear, and the limits of their authority were clearly defined."
The onboarding step Maguire used next varies from Herbalife's approach. "Be quiet and step aside," he emphasizes. "Give your people the chance to fail. You'll be amazed at how much they appreciate the fact that you're not stepping in at the last minute saying, 'OK, I'll take it from here.'"
Herbalife, on the other hand, covers "derailers" with its new executives during onboarding as Crocker believes it's vital to identify things that could cause them to fail or get into trouble.
Bishop adds that executives need to determine what they're being charged with. Oddly enough, they may not find it in writing. "What's normally said in job descriptions is not what the world is about," says Bishop. "They also have to start producing some results. They have to understand the initial set of priorities and take some action."
Six executives currently have completed Herbalife's onboarding program and provided positive feedback. Crocker says they've seen solid results and continue to build on the process. "We've found this onboarding program has helped new leaders come in and go after the important stuff," she says. "They're much more focused on getting quick wins and results through people, and we've had some good cultural fits because of it. Our executives who completed this program are talented people anyway, but it enabled them to get off on the right foot and get some results from the company standpoint. We've seen that both in financial and non-financial results."
Maguire himself experienced the benefits of onboarding at FedEx. Before adopting the program, he described it as a chaotic scene with everybody running in different directions. He saw the program pay off when the company faced major challenges, such as when the fax machine emerged in the 1980s. At that time, 50 percent of their revenue came from shipping documents. "We had to reinvent ourselves, and we did," Maguire says. "All of this was made possible by our tightly run training and development organization."
Bishop believes the investment made by companies to onboard pays off "big time." He contrasts that with the financial consequences of losing an executive. "It costs you for another recruiting, downtime, and for opportunities lost," says Bishop, who then describes another way it hurts the company that's difficult to measure: "You demoralize people if you keep bringing on executives who don't make it."
While most onboarding programs last 90 to 180 days, Benjack Glatzer says executives must think well beyond that and establish themselves as real leaders in the company. "They should ask: How am I going to ensure that when I leave, that I have a positive legacy?" she says. "Executives are not thinking enough about that. They're so short-term focused."
Sidebar: Quick Tips
• Decide whether to use internal or external talent for onboarding executives.
• Educate new executives on the company's culture and politics.
• Enable executives to see the organization's big picture.
• Have executives start meeting with their new team early and often.
• Arrange one-on-one meetings with peers.
• Establish an initial set of priorities and have execs take action.
• Identify potential "derailers."
• Hold progress checks every 30 to 45 days.
• Prepare executives to move into the next stage for additional learning and action.
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