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Save Money Next Time You Promote or Hire That New Exec
Written by: Susan IrelandArticle Overview: According to Michael S. Melbinger, Partner at Winston & Strawn, LLP and a leading authority on executive compensation world-wide, mentoring and coaching for newly-promoted managers and/or newly-hired executives is gaining in importance, even in this economy. Why? One of the reasons is companies can no longer afford the costs incurred from poor management/executive performance. It costs too much to get them, let alone get them productive quickly. In this economy, every dollar counts.
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Save Money Next Time You Promote or Hire That New Exec
Save Money Next Time You Promote or Hire That New Executive
Coaching during on-boarding process reduces high cost of management turn-over
According to Michael S. Melbinger, Partner at Winston & Strawn, LLP and a leading authority on executive compensation world-wide, mentoring and coaching for newly-promoted managers and/or newly-hired executives is gaining in importance, even in this economy. Why? One of the reasons is companies can no longer afford the costs incurred from poor management/executive performance. It costs too much to get them, let alone get them productive quickly. In this economy, every dollar counts.
Figure this: How much does it cost your company to promote from within or hire new management or executive-level talent? How long does it take the new person to become really effective in the job? Research by Harvard Business Review indicates it takes a new executive at least 6.2 months to reach the break-even point, even in an organization where he or she is a good fit. Yikes! And, inevitably, some newly hired or promoted people do not meet corporate expectations and are forced to leave the organization after a very short period of time. Some companies and researchers have estimated a failure rate as high as a 50%.*
Bottom line: a company incurs significant costs from poor executive & management selection.
Because performance fit and culture fit can be key factors influencing whether a new person will meet corporate expectations, management and executive on-boarding is an idea that seems to be gaining traction. "On-boarding" is the process that supports new managers/ executives in becoming productive quickly in their new environment and role.
While coaching during the on-boarding processsounds like a good solution, how is it pulled it off?
The easiest way is to hire an external coach who specializes in this area. They'll guide the new person through a structured process that helps him or her focus on the right activities. The coach actively assists the executive in focusing on the right activities in the right way during his or her initial months on the job, which can be critical to new executive effectiveness and increase the success rate.
According to Melbinger, the benefits of having an external coach during the first 6-12 months of an executive's on-boarding are:
- Accelerates the executive's transition, so he/she quickly becomes effective in the new role and achieves immediate results.
- Helps the new executive with cultural issues, such as assuring an appropriate balance between assimilating into the new organization and making the positive changes in organization.
- Reduces the probability of high failure/disappointment rate.
- Provides personal assistance in effectively dealing with difficult people, situations, and circumstances.
- Supports and guides the executive in initiating new ideas and innovation.
- Provides an independent and objective temporary mentor, sounding board, and counselor (particularly valuable when the executive is new to the company).
- Helps the executive develop and implement a 6-12 month strategic blueprint aligned with business objectives, to include key goals, strategies, and initiatives.
So there you have it. If you're watching your expenses during your management/executive talent search, ask yourself one question: What will it cost us if this person doesn't succeed? Then implement mentoring and coaching as part of your on-boarding process. You'll be glad you did!
*According to Dan Ciampa and Michael Watkins, in Right from the Start (Harvard Business School Press, 1999), 64% of new executives hired from outside the company will fail at their new jobs.
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Article Tags: economy, exec, executive compensation, leading authority, mentoring
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About the Author: Susan Ireland RSS for Susan's articles - Visit Susan's website As a Certified Integrity Coach and member of The Master Coach Council, I work with business owners, managers, department heads and professional services providers to help them achieve high performance and lasting results in any economy. My passion is helping people develop strengths they often don't know they have and take advantage of opportunities they don't know exist. My vision is to build life-long relationships by making a difference in people's lives, one client at a time. Click here to visit Susan's website Save Money Next Time You Promote or Hire That New Exec Meeting Etiquette the Direct Correlation to Employee Performance Stop Struggling to Feel Fulfilled Successful Satisfied at Work Part One Business Growth The Sales Managers Secret Weapon Do you Suffer from Sand Castle Management Take this Litmus test |
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