Would you be willing to make a six-figure investment on behalf of your company that had about a 50% chance of failing, especially if failure would cost you many times your initial investment?
Very likely you would say, “No way,” but may be surprised to find that corporations actually do it quite frequently. It happens when they hire new executives. According to studies cited by Michael Watkins in his book The First 90 Days, 40% to 50% of executive hires fail to provide the results expected. According to Forbes magazine (2/15/12) about 40% of executives who are hired or promoted fail in the first 18 months. The average cost of an executive “mis-hire” is estimated at $2.7 million.
If that dollar number sounds inflated, consider the following costly components: executive time spent in interviewing and selecting; recruiters’ fees; salary and benefits that provide little or no return during the failed executive’s tenure; executive time and legal fees spent in preparing a termination; severance pay for the executive to go away quietly; plus damaged reputation and missed business opportunities due to the new hire not succeeding.
For a smaller, entrepreneurial firm hiring a mid-management person, maybe the cost would be “only” about one million bucks. The more you skimp on the recruitment and selection components cited above in order to minimize your investment, the more your chances of failure increase
To help clients manage effectively and reduce these risks, Mulkern Associates has developed and successfully implemented over the past three-years the 90-Day Planning Process, based upon Watkins’ book. A professor at Harvard Business School, Watkins has not produced a leadership bestseller filled with informal, conversational-style prose and humorous, uplifting anecdotes. Instead, his book is an expertly crafted yet somewhat tedious read for most busy executives. For this reason, Mulkern Associates has produced a succinct, practical workbook that takes client executives through the following process:
- Every two weeks for three months the client executive provides a report based upon topics from the workbook, such as clarifying responsibilities and key result areas, anticipated “early wins,” evaluation of the inherited team, the CEO’s or boss’s priorities and expectations, and whether these expectations are realistic.
- Each report is discussed with the client in a confidential executive coaching session. These conversations are not shared with anyone else, but the revised bi-weekly reports are forwarded to the boss to enhance communication, coordination, joint planning—and perhaps most importantly—the boss’s involvement in the process.
- One of the more challenging early reports discusses whether the executive’s new job is a start-up, turnaround, realignment, or maintenance of success. Specific pages of the Watkins book are cited for definitions. The outcome of this analysis can have profound implications for team selection and planning, both strategic and tactical.
The final report consists of a detailed plan, including objectives and action steps for the remaining nine months of the first year, if not longer. An Excel template is provided, or one can be designed by the executive client. The satisfaction and pride that the executive typically shows upon completion of this plan illustrate how the process boosts sentiments of mastery and confidence, which are essential for any executive’s top performance.
This process differs significantly from the usual “on-boarding,” which typically involves an introduction to the culture and carries with it the expectation of a first-year plan to be completed at the end of 30 days.
The point of the Watkins model is that no useful plan can be developed without significant research and analysis of the new environment and extensive negotiation with the new executive’s boss, colleagues, and subordinates over resources, priorities, and objectives. Our experience with the traditional process is that the end-of-30-days plan usually is not written at all. If it is written, it tends toward the superficial and vague. By contrast, at the end of the 90-Day Planning process a comprehensive and detailed roadmap is created.
Furthermore, this process works just as well with newly-promoted or reassigned executives as it does with newly hired ones and is just as critical. “On-boarding” in that case would be out of place. How well, then, does it work? At the end of the process, each executive is asked to complete a confidential feedback form. Here are some representative comments from past clients who were asked what they found valuable about the process:
- It helped to have a second set of eyes to help identify opportunities and… to measure achievement against goals.
- Time to freely discuss dynamics with a “neutral” party.
- Helping me navigate through the company’s politics and processes, as well integrate into my new role.
- Provided insights to the organizational culture and values.
- Provided direction on how to manage difficult relations/situations.
- Guidance provided on handling issues with my superior and employees was very helpful.
- Feedback allowed me to ensure that I was aligned with the company priorities.
- Achievement of early wins to gain the respect of others.
The outcome is not always so felicitous, however, since some executives who give the process lip service at the outset fail to participate, even with large amounts of support and encouragement. In most cases, such executives failed in their new jobs in a relatively short time. In this sense, the process actually works in reverse as well. It can serve as an early-warning signal that there is a bad fit and that a mistake has been made in the hiring process. No company can make a great selection 100% of the time. The sooner you can cut your losses, however, the less they will be. (For guidelines on how to avoid hiring mistakes in the first place, see “Reducing the Shock of Executive Hiring”
To sum up, in Watkins’ own words from the foreword to his book:
Leaders, regardless of their level, are most vulnerable in their first few months in a new position…they lack detailed knowledge of the challenges they will face and what it will take to succeed…. Failure to create momentum during the first few months virtually guarantees an uphill battle for the rest of …tenure in the job. Building credibility and securing some early wins lay a firm foundation for longer-term success.
If you would like to explore the 90-Day Planning process for your company in a no-cost, no-pressure discussion, please respond in the comments section below or give us a call.