There is a compelling business reason for organizations to invest in the integration of their executive talent. Acquiring a new senior level manager is an expensive proposition — fees for retained searches are typically in the range of 30% of the executive’s first year’s total compensation. At the same time, the failure rate of external hires in their first two years is high, frequently ranging from 40 to 60%. Those promoted to higher levels of responsibility from within often fare little better. Despite this, organizations don’t do much to increase the odds in favor of success for executives in new positions. By failing to attend to integration as carefully as it does to the selection of the new executive, the organization is leaving much to chance.
Successful integration benefits corporations in three ways. First, companies can save millions of dollars spent on search fees, education and severance packages. Second, by maintaining continuity in the leadership ranks, corporate strategies, goals and development programs proceed on schedule without disruption caused by changes in management. Third, the process itself can actually facilitate and accelerate the integration process by involving the organization and addressing derailing situations before they escalate and divert attention away from the operational aspects of the position.
What are the dynamics involved in integrating into a new culture or a new position? Is there a systematic approach available to ensure the successful onboarding of senior level executives? What are the success factors that can make a difference in the process? What steps can today’s CEO take to ensure his or her management team stays intact for the long term? These are a few of the questions we explore in this issue of Executive Insights.