I recently attended an HR Leadership Forum meeting in Arlington, VA on Friday October 5th where Dr. Craig Simpson, with ORTalent, Inc., spoke on “Unlocking the Hidden Psychological Drivers of Leadership Performance.” Dr. Simpson provided some interesting statistics showing that in the first 18 months 30% of internally promoted executives and 50% of externally hired executives fail in their role. Simpson stated that the average cost of this executive turnover is estimated to be approximately $500,000. We know that turnover in general is costly to organizations. So, the question is “why do they fail”?
Placing the right individual in the right job can be difficult and there are many reasons why these executives fail. Often, one of the greatest challenges is predicting leadership performance. I’ve seen many times in my experience where an organization identifies an individual for a position, who really isn’t the right fit. The individual may have the credentials for the position, but doesn’t conform to internal politics and is unable to adjust to the organizational culture. Sometimes these individuals get caught up in the weeds and can’t envision what’s important from the organizational big picture. As with employees at all levels, personal reasons arise and new executives can’t make the new job and/or promotion work for his/her personal and family life. So, instead of placing blame on the individual or the organization, what can companies do?
In working with organizations over the last several years in focusing on leadership development, I started to think about some of our clients and the challenges they have experienced in back-filling key positions in the organization and the difficulty it is in finding the right fit for some of these positions. Some of the things we suggest to clients are:
- Focus on not only what’s needed today but for the future when defining their business needs;
- Provide key developmental opportunities for these individuals, whether it’s attending an executive leadership program or engaging an executive coach;
- Identify mentors within the organization for potential leaders; and
- Continue to provide feedback to the individuals on their strengths and weaknesses.
How often have you seen someone move up in the organization and firms fail to provide constructive feedback on their performance and the necessary guidance and direction to that individual? This hurts both the individual and the organization. The results typically are that this individual fails and/or is not competent in that next level position. We’ve also seen many times where organizations underestimate the importance of interpersonal and communication skills as a critical characteristic for success. Keeping someone in a position because he/she is a rainmaker for the firm yet this same individual cannot relate and communicate effectively with staff spells disaster long-term.
Identifying an effective succession plan that really works is something all organizations aspire to accomplish. If organizations take the time and work with their current internal talent and identify what’s needed externally, they can reap the rewards in creating an environment where leadership development is not seen as a challenge, but rather as a potential for success. So, to ensure you’ve identified the right fit for the next leadership position in your organization, recognize and develop the talent pool, understand the drivers and motivators for success and the competencies of effective leadership in your organization and pay attention to the cultural fit. Taking these things into consideration will help you build the potential and success of long term leaders for your organization.
