Open Minds Open Doors

Final decisions aren't what they used to be. The rapidly changing operating environment demands intellectual quickness and mental flexibility to resolve complex issues. Is your executive management team agile enough to measure up? In a recent survey by RHR International, senior executives were asked to name the most critical characteristic or behavior for successful future leaders. A majority of participants specified some form of mental or learning agility.

Rather than looking just for high IQs or demonstrations of pure mental horsepower, these leaders want individuals who can bring an open-minded approach to problem solving and grasp the complexities of unfamiliar, ambiguous situations with a speed that truly sets them apart from their peers.

What makes intellectual agility such a crucial characteristic for effective performance? The current economic climate gives a perfect example. Yesterday's solutions have limited traction when applied to the financial and operational challenges of today. The competitive advantage goes to leadership teams that combine the basics (broad business experience and a command of the fundamentals) with the development of innovative strategies and tactics.

WHAT IS INTELLECTUAL AGILITY? Executives with nimble minds stand out for their ability to proactively 1) combine information from different sources to provide new ideas or meanings, 2) generate a range of perspectives and options, 3) adapt their thinking process to varying environments, 4) work with new ideas or concepts that originally conflict with their initial thoughts, and 5) maintain flexibility over time as solutions play out.

When assessed for intellectual agility, executives can usually be placed in one of three levels. Individuals at the basic level of agility adopt a single plan or strategy and work only within this framework. They fail to gather information that might suggest an alternative approach, or have a tendency to reject fresh proposals out of hand. These people have difficulty adjusting their preconceived ideas when challenged with new information and might be said to have "one track" minds.

Executives operating at the next level can, at the very least, view problems and issues from a variety of perspectives. At times they take it one step further and generate more than one plan of attack for an operational challenge by enlisting others to help them generate new ideas. Leaders at the upper end of the mid-range sustain support for all alternative proposals before and during determination of the best solution. They can also maintain a certain degree of flexibility as plans play out. Even at this level, these executives tend to be more effective in different environments than their less agile counterparts.

On the top end of the spectrum are the executives who consistently demonstrate a high level of openness to data, feedback, ideas, and learning and then ingrain this mind-set into the culture of their companies. This is accomplished by establishing strategies to encourage multiple solutions to every issue. The most agile leaders actively involve others around key challenges through direct questioning, probing and brainstorming. All ideas receive equal consideration until evidence forces their disposal. As opposed to a "one track" executive, these leaders and their teams operate on multiple tracks, with the ability to switch among them at will or even "fly" above the rails to add a third dimension to the problem solving process.

Finally, although a consensus must be reached, these executives and their teams know that the chosen solution is always a work in progress that will likely need constant mid-course corrections. They are able to emotionally detach from the chosen plan and act objectively in the face of new facts, unlike people who suffer from "confirmation bias" and only focus on data which supports their prejudged conclusions.

DEVELOPING MENTAL AGILITY Where do your leaders fall on the agility scale? What if you can't find naturally nimble executives to fill your bench? Even individuals with low levels of agility can improve their performance with guidance, direction and the right questions - "How broad a search did you conduct? Do we have any other options? How would each solution play out? How would you build an action plan around that?" They can also learn by example from others in the organization and put their observations into practice. Once they are recognized for applying these lessons successfully the first time, they will look for other opportunities to make use of them.

Assessment for intellectual agility should be part of every company's executive development program, whether for CEO selection, succession planning or accelerating the effectiveness of executives in their current roles.

The quality of mental agility is especially important to assess in high stakes situations, such as conducting M&A management due diligence. The reason is that senior teams with high levels of mental agility simply make better business decisions, which gives them a distinct edge in the marketplace.

While there are a multitude of desirable behaviors and attributes required for building the best possible senior team and executive bench, making sure they are filled with nimble minds is one key way to prepare your organization to take advantage of - and prosper during - the coming recovery and beyond.

ABOUT RHR INTERNATIONAL
RHR International is a firm of management psychologists and consultants who work closely with top management to accelerate individual, team and business performance. We focus on five key areas of client need - CEO Succession, Executive Selection and Integration, Accelerated Executive Effectiveness, Senior Team Effectiveness, and Management Due Diligence. We have been proven difference-makers for more than 65 years, unique in our combination of top management focus, psychologists' perspective and high-level business acumen.

RHR International
We see what others don't.

Success Factor #5: Accelerated Learning

"I may not be aware of every gap in my knowledge, but I have a plan to learn what I think I need to know. The rest I will figure out as I go along."

Taking on a new role will inevitably reveal gaps in knowledge and experience. These may not be as great as those experienced by external hires, but to assume someone knows everything they need to know when they step into a brand new role is unrealistic. One of the challenges is overcoming the assumption, on everyone's part, that the new leader knows everything just because he or she has been in the company. External hires are given more leeway when it comes to learning. The task for the leader moved internally is to get up to speed as quickly as possible. Early in their assignments, most executives acknowledge their biggest learning gaps include learning the business, the organization, and the people.

"I still have one foot in my old job, one foot in my new role... I'm concerned that it may keep me from delivering."

When organizations allow for job overlap – someone is expected to do some, or all, of their old job while trying to learn the new one – they delay the learning curve and the transition. Someone hired from the outside is not expected to multi-task in the same way. Indeed, who would tolerate an employee who is spending 30% of their time with their former company? And, yet, we expect our internal leaders to do this all the time.

Success Factor #6: Targeted Development

"I need more development regarding business, financial, strategic acumen, and leadership at this level."

Whereas for external hires the key challenge is to integrate into a new organization, internal hires face two challenges: to integrate into a new role and to develop the knowledge and skills required to operate at a different level or in an unfamiliar function. Leaders, again, tend to overestimate how prepared they are to take on a new role. Over time, gaps in skills and capabilities required to be successful emerge.

While in the first 3 months almost 80% of executives rated themselves as prepared to take on their new role, by month 10, this dropped to 40%. They start to feel the gaps in their leadership and higher-level business skills (which they hadn't anticipated or prepared for) very acutely.

"I'm frustrated in this role. It does not do anything for my development or advancement."

In some cases, leaders come to realize that the new role is not going to satisfy their needs for career development and advancement. There will always be times when extraordinary things are asked of extraordinary people to help the organization successfully meet its objectives. But consistently failing to align succession plans with an individual's needs and expectations can lead to disillusionment and departure.

How Organizations Can Improve and Accelerate Leadership Transitions

Many organizations have robust, effective processes for recruiting, selecting and onboarding external talent. The application of these proven procedures to internal placements should likewise enhance the success rate of these transitions and accelerate the performance of promoted executives. Our research highlights areas where organizations can focus to maximize the success of their internal transitions.

Before the Transition

Defining the role and context before a formal selection process occurs is critical for success:

• D evelop a formal job description that defines critical skills and competencies so the selection criteria are clear to everyone. This includes defining unique cultural aspects of the role (e.g., geography, team dynamics, group culture, etc.) where interpersonal "fit" issues may be relevant.
• G enerate a complete roster of potential candidates. Too often internal hiring decisions are made based on only one or two people without thoroughly vetting alternatives.
• Involve the hiring manager early. Without this person's initial input before the selection, and active support afterwards, the promoted executive's chances of being successful are significantly reduced.

Making the Decision

"I'm still trying to define the real expectations of my boss. They have never been fully communicated, or maybe I didn't understand them."

Just as with external selection, once the hiring criteria and the context have been defined, potential candidates can be screened and assessed against these standards in an objective way. The process should:

• Include a formal selection process that compares candidates against the success criteria for the role. This also provides the opportunity to test the readiness of the individual for advancement to the next level and to hone in on specific gaps that will form the foundation of a transition and development plan.
• Incorporate multiple interviews so the candidate can start to form an understanding of the role, boss and peer expectations, and anticipated challenges. In addition to ensuring there is fit on both sides, this will kick-start role clarity, an issue that plagues internal transfers.
• Ensure the hiring manager supports the decision. Forcing someone to accept a direct report not of their choosing is a recipe for disaster.
• Offer the job to the successful candidate in a non-threatening manner. Forcing people to make snap decisions about taking a role (and not being serious about it being optional) doesn't help the organization or the leader.
• Anticipate integration challenges. Where is this person most likely to struggle? Engaging in this analysis early will help ensure the right support is offered immediately. This will help to accelerate the leader's successful transition.
• Result in a clean break. Asking leaders to take on a new role while they are still filling their old one is an all-too-common scenario. Plan your transitions so these overlaps are minimized.

Post-Transition Support

"When I first started I underestimated the amount I had to learn
and the scope of information I would need to stay on top of."

Don't abandon the executive once the selection decision has been made. While the specifics may vary, a leader who is changing jobs inside his or her company faces just as many potential obstacles as those who come in from the outside. Whereas external hires need more time to get up to speed on processes, culture and the business, internal hires have the challenge of overcoming reputation and re-contracting relationships. External hires probably step into the role with the skill set they will need to be successful and have impact early. Executives promoted from within usually have gaps in their skill set they will need to close. Providing the right kind of support to a new leader can make the difference between success and failure. Strategies to consider:

• Ensure the boss is engaged as a partner in the leader's transition and ongoing success. This is the single best predictor of transition success.
• Identify key integration challenges for each person and customize your support initiatives. Ensure goals and expectations are formalized and documented.
• Share assessment feedback – key strengths and identified gaps. Use this as the foundation for a development plan targeted at rapidly closing gaps that are critical for success. A coach may be needed to accelerate learning.
• Monitor progress past the first 3 months. Internal transfers report struggling most in their new role well past the 6-month mark, and long after external hires seem to have settled into the routine. Areas to pay special attention to include role clarity, relationships and developmental progress.

In Summary

Successful leadership transitions are challenging whether an executive is hired into a new company or takes on a new role or set of responsibilities with an existing employer. Internal transitions have an added layer of subtlety and complexity that is lacking in external transitions. Our research suggests it is taking leaders moving into new roles inside their organizations too long to integrate. Five reasons seem to dominate:

• A coherent understanding of the role, how it interfaces with others in the organization, and the expectations of one's boss and others takes too long to resolve.
• T he importance of re-contracting relationships, establishing influential alliances with peers, and reinforcing one's credibility with others in the new role is overlooked.
• Recognizing one's development gaps vis-à-vis operating at a new level of leadership occurs too late.
• Assumptions run rampant on all sides, interfering with open, candid dialogue and thereby decelerating the integration timeline.
• A new position is over-interpreted by the leader as an unqualified vote of confidence, leading to an unwarranted level of overconfidence and optimism. Problems and issues are dismissed too quickly and allowed to fester, leading to frustration, disillusionment and derailment.

"They assume I know the company because I came from within."

Organizations should apply the same methodical approach to managing their internal succession as they do their external recruitment and hiring. This research identified Six Key Success Factors – role clarity and alignment, re-contracting relationships, adapting to a sub-culture, early wins, accelerated learning, targeted development – that provide a road map for organizations to more effectively manage internal transition, get leaders up to speed more quickly, and reduce the likelihood of failure.

Methodology

In-depth interviews were conducted with 150 leaders from 59 different organizations located on 3 continents. Multiple levels and functions were represented, with 35% coming from the CEO/Executive Vice President/Senior Vice President ranks and 38% from the Vice President ranks. Sixty-nine percent of those surveyed were in a new role due to a promotion. Participants ranged from 1 day to 36 months in role. Thirty-one percent were female; no gender differences in the quantitative data were reported.

For more information, please contact Dr. Rebecca L. Schalm, Global Practice Leader, Executive Selection & Integration for RHR International at rschalm@rhrinternational.com.

About RHR International

We are a firm of management psychologists and consultants who work closely with top management to accelerate individual, team and business performance. We focus on five key areas of client need – Executive Selection and Integration, Accelerated Executive Effectiveness, Senior Team Effectiveness, Management Due Diligence and CEO Succession. We have been proven difference-makers for more than 65 years, unique in our combination of top management focus, psychologists' perspective and high-level business acumen. RHR International has offices in Belgium, Brazil, Canada, China, France, Germany, Italy, Switzerland, United Kingdom and United States. The company is headquartered in Chicago, Illinois.

For more information, please visit us at:

www.rhrinternational.com
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