Getting off to a fast start
On the other hand, transitions as part of a change process are great opportunities to unlock value and revitalize business activities.
Unfortunately, many corporations have not fully appreciated the risks (the opportunities are usually easier to spot) and use a 'sink or swim' approach (together with the rationalization that top caliber managers know what it takes to succeed), rather than a systematic on-boarding process for new executives, especially those from the outside.
Putting together some of our experience, as well as the insights of specialists in corporate culture and leadership transitions, I have summarized some of the main considerations that a leader should consider as he/she starts a new assignment.
Recognizing the business environment
There are several different types of business situation in which a new leader may find him/herself. Start-up situations and business turnarounds immediately come to mind, but other important transitions occur in already successful companies where the goal is to sustain success or to realign the company to new market challenges.
Each of these situations requires different steps and different timing. They also have different levels of urgency as well as contexts. For instance, in a turnaround situation it is usually recognized within the company - and by the marketplace - which changes need to be made. Therefore, there is an expectation that a new executive starts making tough decisions early; there is also a general recognition that there may not be available internal resources so it is often possible to 'shock' the culture with additional external appointments and other major changes.
On the other hand, a business realignment or situation where the company is already successful involves much more careful use of resources. Here the culture and business values, even if leading to dangerous ground, need to be respected and evolved. Wholesale change would lead to rejection of the new direction (and executive).
Understanding the company
In addition to understanding the business environment, the company itself requires careful attention. All too often, senior executives underestimate the challenges facing the company and overestimate the speed with which changes can be made.
For instance, in turnaround situations where there is recognition of the need to change, the new direction is often not clear - and usually not easy to implement (which is why the company may have gotten into trouble in the first place). It is not enough to present a new strategy or approach, it needs to be implemented or internalized. Moving and motivating a small group is difficult enough, mobilizing an organization is even more difficult.
Another risk for an executive - especially one coming from the outside - is not to pay enough attention to the new corporate culture. Every corporation has its own culture, which can be defined according to the way decisions are taken, leadership and risk are understood, all the way through to accepted management styles. If a new executive does not understand the culture, his/her decisions will be questioned and resisted naturally and even unconsciously, and change will not occur.
Overcoming the risks
Some executives specialize in specific situations - they become start-up or turnaround specialists. On the other hand, most leaders through their career must be able to adapt to several of these situations, often without guidance.
The successful 'transition' leader recognizes these risks and is capable (emotionally intelligent) enough to adjust himself to the situation, while maintaining and applying business principles to deliver results. Key success factors include: Careful focus and prioritization. Identifying areas of opportunity - especially for 'quick wins' - is so important that it cannot be overstated, not only to build personal credibility but also to build momentum for change. Even in extreme situations, systematic change is usually more desirable and sustainable than 'shock therapy'. However, systematic change is built on prioritized and progressive steps/actions that lead clearly forward.
Listen and Respect. Not respecting a corporate culture is always a recipe for disaster. All people should be respected as a principle but, not surprisingly, it also produces better business results over the long term. However, it is all too easy, especially for an outsider, not to respect a new company culture especially in turnaround situations. Resist the temptation, listen and observe, understand who the informal leaders are and who is likely to resist change (or become a change agent). Carefully recognizing a corporate culture can increase the speed of change substantially.
Process Matters. Changes that appear arbitrary, unfair or manipulative (not to mention unethical or inconsistent) usually create trouble and always create distraction. A good example is Michael Eisner who just lost his chairmanship at Disney (and will likely lose his job) because - in addition to poor performance - he is perceived by shareholders as being arbitrary and inconsistent. Shareholders have rejected his leadership in an unparalleled proxy vote.
Establish long-term goals. A positive vision that is communicated to employees, shareholders (and the boss) is key to success. It motivates and helps gather momentum, especially when coupled with quick wins and initial steps that support change in the direction of the strategy. However, don't compromise on strategy and don't give a long-term strategy before it is ready - consistency is an important part of leadership (and surprisingly enough, change).
Be involved in the business. Strategy is a favorite word of many aspiring young executives. It is the necessary starting-point, but not enough by itself. Operations usually trump strategy as a success factor. Mobilizing and implementing a good strategy, by hiring and working with executives who can deliver results (and cascade this through an organization) guarantees the ability of a company to meet the challenges of the future.
By the end of the transition process, the organization should see that something new has started and it should feel that something good is happening.
For those interested in an in-depth study of the key factors in transitional success, there is a very good book by Michael Watkins published by Harvard Business School Press in 2003 called The First 90 Days: Critical Success Strategies for New Leaders at All Levels.
Matthew Tebeau, the Managing Partner of Ray and Berndtson Poland and the Baltic States
Unfortunately, many corporations have not fully appreciated the risks (the opportunities are usually easier to spot) and use a 'sink or swim' approach (together with the rationalization that top caliber managers know what it takes to succeed), rather than a systematic on-boarding process for new executives, especially those from the outside.
Putting together some of our experience, as well as the insights of specialists in corporate culture and leadership transitions, I have summarized some of the main considerations that a leader should consider as he/she starts a new assignment.
Recognizing the business environment
There are several different types of business situation in which a new leader may find him/herself. Start-up situations and business turnarounds immediately come to mind, but other important transitions occur in already successful companies where the goal is to sustain success or to realign the company to new market challenges.
Each of these situations requires different steps and different timing. They also have different levels of urgency as well as contexts. For instance, in a turnaround situation it is usually recognized within the company - and by the marketplace - which changes need to be made. Therefore, there is an expectation that a new executive starts making tough decisions early; there is also a general recognition that there may not be available internal resources so it is often possible to 'shock' the culture with additional external appointments and other major changes.
On the other hand, a business realignment or situation where the company is already successful involves much more careful use of resources. Here the culture and business values, even if leading to dangerous ground, need to be respected and evolved. Wholesale change would lead to rejection of the new direction (and executive).
Understanding the company
In addition to understanding the business environment, the company itself requires careful attention. All too often, senior executives underestimate the challenges facing the company and overestimate the speed with which changes can be made.
For instance, in turnaround situations where there is recognition of the need to change, the new direction is often not clear - and usually not easy to implement (which is why the company may have gotten into trouble in the first place). It is not enough to present a new strategy or approach, it needs to be implemented or internalized. Moving and motivating a small group is difficult enough, mobilizing an organization is even more difficult.
Another risk for an executive - especially one coming from the outside - is not to pay enough attention to the new corporate culture. Every corporation has its own culture, which can be defined according to the way decisions are taken, leadership and risk are understood, all the way through to accepted management styles. If a new executive does not understand the culture, his/her decisions will be questioned and resisted naturally and even unconsciously, and change will not occur.
Overcoming the risks
Some executives specialize in specific situations - they become start-up or turnaround specialists. On the other hand, most leaders through their career must be able to adapt to several of these situations, often without guidance.
The successful 'transition' leader recognizes these risks and is capable (emotionally intelligent) enough to adjust himself to the situation, while maintaining and applying business principles to deliver results. Key success factors include: Careful focus and prioritization. Identifying areas of opportunity - especially for 'quick wins' - is so important that it cannot be overstated, not only to build personal credibility but also to build momentum for change. Even in extreme situations, systematic change is usually more desirable and sustainable than 'shock therapy'. However, systematic change is built on prioritized and progressive steps/actions that lead clearly forward.
Listen and Respect. Not respecting a corporate culture is always a recipe for disaster. All people should be respected as a principle but, not surprisingly, it also produces better business results over the long term. However, it is all too easy, especially for an outsider, not to respect a new company culture especially in turnaround situations. Resist the temptation, listen and observe, understand who the informal leaders are and who is likely to resist change (or become a change agent). Carefully recognizing a corporate culture can increase the speed of change substantially.
Process Matters. Changes that appear arbitrary, unfair or manipulative (not to mention unethical or inconsistent) usually create trouble and always create distraction. A good example is Michael Eisner who just lost his chairmanship at Disney (and will likely lose his job) because - in addition to poor performance - he is perceived by shareholders as being arbitrary and inconsistent. Shareholders have rejected his leadership in an unparalleled proxy vote.
Establish long-term goals. A positive vision that is communicated to employees, shareholders (and the boss) is key to success. It motivates and helps gather momentum, especially when coupled with quick wins and initial steps that support change in the direction of the strategy. However, don't compromise on strategy and don't give a long-term strategy before it is ready - consistency is an important part of leadership (and surprisingly enough, change).
Be involved in the business. Strategy is a favorite word of many aspiring young executives. It is the necessary starting-point, but not enough by itself. Operations usually trump strategy as a success factor. Mobilizing and implementing a good strategy, by hiring and working with executives who can deliver results (and cascade this through an organization) guarantees the ability of a company to meet the challenges of the future.
By the end of the transition process, the organization should see that something new has started and it should feel that something good is happening.
For those interested in an in-depth study of the key factors in transitional success, there is a very good book by Michael Watkins published by Harvard Business School Press in 2003 called The First 90 Days: Critical Success Strategies for New Leaders at All Levels.
Matthew Tebeau, the Managing Partner of Ray and Berndtson Poland and the Baltic States
