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Save Money Next Time You Promote or Hire That New Exec

Written by: Susan Ireland

Article 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.

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.

How do you find a qualified coach? There are thousands of people out there who call themselves coaches. Many are excellent, some not so much. One way to find them is to look on the Internet. Yet, just like looking for a doctor, attorney, architect, real estate agent, or other professional service provider, you'll have greater success in finding the right coach through your own network or sphere of influence. Ask colleagues, friends and peers you know and trust to recommend someone.

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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