Executive Integration: Beyond the First 90 Days

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 Insight.

Integration is a Multi-Stage Process
Contrary to current opinion, integration progression is more complex than originally thought and takes much longer than the traditional three month "Honeymoon" period usually allowed by an organization. While the first 100 days are critical, an executive's integration does not stop at that point. Current research shows that successful integration actually takes between 12-18 months.

During this time frame there are a series of distinct stages an executive traverses when integrating into a new role: Honeymoon (1-3 months), Reality (4-6 months), Adjustment (7-12 months) and Integration (13 months+).

Key Integration Success Factors
Progress through the four stages of Executive Integration, and the likelihood of success, is enhanced when the organization and the executive attend to five Key Success Factors:

• Role Clarity — understanding the role, its relationship to others in the organization, and how success is measured. This factor is most critical during early stages in a new position. A lack of role clarity is a frequent reason for early derailing.
• Relationships and Networking — identifying and building relationships with key stakeholders both inside and outside of the organization. Relationships develop slowly. Failing to invest time in building them before they are needed is often a cause of derailing later in the integration process.
• Navigating Culture — understanding the implicit rules and beliefs held by people in the organization that influence how things really get done. Failing to understand and adapt to the culture can cause derailing at any point during the assimilation period.
• Early Wins — achieving early successes around things that are important to the organization. This is a critical component of building credibility early in a new executive's tenure.
• Accelerated Learning — acquiring information that will be critical to understanding the business and achieving success. Executives who are not seen as "catching on" feel both their credibility and ability to drive results suffer.

The focus and importance of these factors shift over time. For example, early wins are an important contributor to credibility in the first 3-4 months, whereas relationships take a lot longer to build and the knowledge that is required to successfully navigate the politics of the organization continues well into the first year.

The Four Integration Stages
Honeymoon: Welcome Aboard!
Most executives begin with a lack of in-depth understanding of their role, the organization, and its people. In spite of this, new hires report being unrealistically optimistic and overly confident in their ability to succeed. During this phase the organization is also on a honeymoon and it transmits positive, confirming messages that reinforce the confidence people feel. Everyone starts by seeing the positives and overlooking the negatives.

The organization at this point typically provides some support to the executive. For instance, an orientation program may be in place. However, sometimes even this elementary step is missing. The CEO and organization can provide additional support to the executive with the following steps:

• Introduce the executive to the organization in a way that demonstrates support and confidence early (e.g. within the first week).
• Identify early wins and clarify priorities. Often what the executive sees as an "early win" may be unrealistic or off target.
• Provide clear and specific feedback both about task performance and fit with the culture.
• Be clear and specific about role, expectations, and measures of success.
• Provide introductions and networking opportunities.
• Provide help with the administrative basics.
• Highlight the onboarding plan and orientation program.
• Assign a peer coach.

Reality: Did I Make the Right Decision?
After three months or so, executives in new positions have a lot more information and the real challenges facing them become more salient. They begin to understand the organization more accurately — seeing the good, bad and ugly. Positive feedback that was flowing typically stops and doubts start to set in as they wonder if they've made the right decision in accepting the job. This is accompanied by a decrease in confidence around their ability to be successful. During this time frame, the following actions should be implemented:

• Provide the organization with visibility to the new hire's successes.
• Hold regular one-on-one meetings to provide feedback both in terms of performance and fit with the culture, and to monitor how the executive is doing.
• Articulate decision making processes and organization dynamics that are critical to success (i.e., how things really get done here).
• Clarify critical goals and objectives.
• Broaden exposure to the culture and people.

Adjustment: Do I Want to Do This?
During the third phase expectations are more realistic, relationships start to take hold, and people start to recover their confidence. While challenges are acknowledged, they don't seem so daunting. At the same time, however, questions about fit linger and commitment hits its lowest point. While from the outside it may look as though they have settled in, this is often the point at which executives will make the decision whether to stay long term or leave. They may hang on, however, until they feel their departure can be explained to a subsequent employer. Issues surfacing during this stage can be addressed by:

• Reviewing progress against goals and deliverables.
• Further broadening exposure to the culture and people through involvement in a cross-functional project or work team.
• Beginning to identify longer term development needs.
• Providing feedback about what is working and what's not.
• Having a key leader reach out to reinforce commitment and connection to the organization, providing an opportunity for dialogue and two-way feedback.

Integration: I'm in the Right Place!
Successful integration is usually completed between 12 — 18 months, depending on the complexity of the role and organization. Knowledge about the more subtle aspects of the operation increases. People start to have friends at work. They recognize that they still have a lot to learn, but they feel a sense of success and accomplishment. Commitment goes up. For many, completing a fiscal cycle with the organization is seen as a critical aspect and brings closure.

What Does Success Look Like?
Once the need for an integration program is acknowledged and the process has begun, how do you know when it's over? Progress can be measured by paying attention to four distinct components of success:

• Credibility — The executive is respected by others. His or her opinion is actively sought out, and others listen when he or she speaks.
• Alignment — The goals and actions are aligned with both boss and organizational imperatives. The organization feels that the executive understands its goals.
• Acceptance — The executive is embraced by people and feels a desire to belong. The organization feels the executive fits in well.
• Contribution — The executive is achieving measurable results. He or she knows how to get things done and the organization feels that the individual is making a difference.

With the integration process winding down, the organization should now begin to shift to the next phase of the executive's career by focusing on succession planning and potential advancement, engaging in a development process to prepare the executive for the future, and providing opportunities to increase the person's visibility outside the organization.

Integration Program for Promotions
When a position is filled from the outside, it is understood that there will be a period of adjustment (at least the traditional 100 days) for the executive to become somewhat productive. In the case of the inside candidate, however, both the individual and the organization often assume that the key relationships, understanding of the rules of the game, and success criteria are knowns — when they often are not, at least to the degree required for real achievement. In some instances, additional difficulties may occur with internal promotions, such as when an executive is advanced to a position of authority over his previous peer group. For this reason, just as with the external hire, care must be taken to have a similar process in place to quickly identify and resolve potential derailing situations.

Managing the Process Pays Dividends
A systematic approach to integrating executives increases the likelihood that the individual chosen will succeed and remain with the company for the long term. Executives who have gone through a successful integration process report greater understanding of their role, the performance demands and the cultural landscape — all of which translate to increased effectiveness earlier in their career. For these reasons, best-in-class organizations do not take short-cuts. They realize that filling a senior level position is only the first step in a successful integration process. A methodical procedure that includes both rigor and objectivity provides cost savings, increases productivity and protects the company from adding to the painfully high number of hiring and promotion failures.

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."

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.

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."

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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