By David Brookmire, Ph.D.
The decision to hire leaders from the outside vs. promoting from within is typically situational, dependent on numerous factors. Most organizations would be better served by promoting internal talent, which increases the chances of success. Internal candidates already understand the company’s culture, operations, challenges, staff, and competitors. Promoting an internal candidate also boosts team morale, sending a positive message throughout the organization about hard work being rewarded. Finally, it costs less to promote from within, as your organization won’t incur recruiters’ costs, relocation packages, and other expenses associated with external hires.
Recently, Matthew Bidwell from The Wharton School demonstrated that external hires received significantly lower performance evaluations during their first two years on the job vs. internal promotions. Additionally, external hires are likely to exit faster—and get paid significantly more —than internally promoted leaders. Substantial research demonstrates that approximately 70 percent of all new leaders fail to meet expectations.
With all these negatives associated with external hires, why do companies look outside their organization rather than promoting from within? Actually, most organizations have no—or subpar—succession planning processes in place and, therefore, don’t have internal candidates ready when leadership positions become available. In some instances, it’s preferable to hire external candidates—such as times of turmoil where the company would benefit from external perspectives, or when fresh, innovative ideas are needed.
When your organization hires external talent, maximize success by creating a formal onboarding process that includes training and team assimilation opportunities. This helps ensure higher retention and performance, faster leader integration, and stronger team relationships. Yet, most organizations don’t implement comprehensive onboarding processes—a big reason so many external hires fail.
In “The First 90 Days,”Harvard Professor Michael Watkins outlined best practices for hiring and onboarding external leaders. He showed that in the first six months, new hires consume more value than they add since they’re still learning about the company’s operations, customers, people, culture, etc. With effective onboarding processes, new leaders start adding value at the six-month mark. Otherwise, new leaders may take 12 to 18 months to add value.
Most companies expect new, externally hired leaders to acclimate without any process or assistance—usually due to lack of T&D resources. Implement formal onboarding, training and team assimilation activities, however, and your new leader will increase success and value while minimizing ramp-up time.
To further increase success, some companies hire external executive coaches to streamline the transition. The coach’s role could include assessing the new leader’s strengths/weaknesses, developing strategic plans, and reorganizing the organizational structure. Coaches often collaborate with HR and T&D to increase productivity, efficiencies, and structures—even team morale.
Case Study
A national nonprofit hired a senior leader to handle its development and marketing functions, following Watkins’ best practices for onboarding. As part of the process, a coach assessed this candidate’s strengths and weaknesses, debriefing on how these related to the company, culture, role, and team. The process followed three steps:
- Discovery: The new leader learned about the company through dialogue, reading, and interaction with key internal and external audiences (Weeks1-3).
- Diagnosis: The leader and coach conducted a situation analysis and assessment of the overall state of the company, including external relations, challenges, opportunities, and changes needed (Weeks 4-10).
- Direction: The leader and coach developed preliminary conclusions about strategy, structure, people, processes, and development of key goals/action plans (Weeks 11-12).
The leader also crafted his initial objectives, which included:
- Craft and deliver key messages to the team and organization
- Clarify roles and expectations with internal and external stakeholders
- Develop and understand strengths/development needed for this new role, incorporating learning from formal personality assessments
- Develop/launch strategic plan
- Participate in and influence the company’s reorganization
Following Watkins’ best practices, he then developed a 90-day transition plan that included these key tasks:
Promote Myself
- Discuss assessment results with executive coach, identifying strengths/development opportunities
- Identify critical weaknesses and develop a plan to overcome them
Accelerate My Learning
- Be visible and listen
- Meet with direct reports and other leaders regularly
- Proactively seek perspective from key stakeholders: CEO, COO, Board members, etc.
Match Strategy to Situation
- Conduct strategy session with senior leadership team and executive coach
- Have conversations with CEO and team
Secure Early Wins
- Deliver on CEO’s early priorities
- Develop key relationships
Negotiate Success
- Hold conversations with CEO about business situations, expectations, style/interaction, necessary resources, and personal development
Achieve AlignmentThrough “Organizational Shaping”
- Conduct ongoing assessment and discussion with CEO/COO
- Identify organization structure and leadership
- Identify “roadblock” issues
- Make key people decisions
Build the Team
- Conduct team assimilation meeting
- Develop criteria for leadership positions
- Hold regular meetings with key leaders
- Understand people/leadership gaps
Create Coalitions
- Map influence landscape
- Identify closest allies and resistors, with plans to handle
Additionally, the leader conducted a team assimilation process with these objectives:
- To provide a method for the leader and team to discuss issues, concerns, and opportunities
- To provide the leader with a platform to address the team and communicate expectations and needs
- Accelerate the relationship-building process
Team Assimilation
Team assimilation is critical during the onboarding process, often facilitated by internal HR staff members or external coaches. This involves confidential interviews of the new leader’s team members, followed by a team meeting to provide key insights and data to quickly form solid relationships.
Sample questions for the new leader’s team:
- What would you like to know about the new leader?
- What concerns and expectations do you have?
- What does the organization need to change? Why?
- How will the team work together?
- What are your goals for the team?
- What’s the best way to communicate with you?
Sample areas the new leader could cover include:
- Hobbies and interests
- Personal and career background
- Leadership strengths and weaknesses
- Expectations for the team
- How you deliver positive and negative feedback?
- How do you coach?
Maximize the success of your new leaders, team, and organization by implementing an onboarding process that includes assessments, a 90-day plan, and team assimilation activities. This way, your new hire will add significant value quickly—and over the long haul.
David Brookmire, Ph.D. is a seasoned executive advisor, researcher, author and recognized authority in leadership effectiveness. He has successfully coached executives at companies including The Cheesecake Factory, Darden Restaurants, Bekaert, Mckesson, Flowers Foods, ADP, and Frito-Lay. Additionally, he offers strategic direction and proven solutions in building organizational capabilities, merger and acquisition success, and improved leader and team performance. For more about Brookmire, visit www.cpstrat.com.
