In many ways, executive succession is like a brokered courtship and marriage, especially when external candidates are involved. Both parties usually present their best selves, position for best advantage and look for confirming evidence of their initial positive impressions. Unlike many courtships, however, executive selection rarely includes the time or process necessary to reality test the relationship before the marriage is consummated.
Mistakes are expensive. CEO turnover has risen over the past 10 years (Directorship, April/May 2009) as has that of senior management. The typical cost of failed hires or promotions is easily upwards of $500,000 in the first year, not including recruiting or organizational costs such as lowered productivity or morale. In response to escalating costs and the need to reduce decision risk, many organizations are looking to increase the accuracy of their predictions, particularly when there is a short time frame for a hiring or promotion decision.
Assess the Context and the Individual and Optimize the Match
Executives typically are hired or promoted because of their strengths to meet specific goals, strategies or competencies. Once decisions to move a candidate to the next step are made, decision makers can find it difficult to evaluate the potential negative “ramifications” (or flip side) of these strengths. Because, in my opinion, one rarely needs to manage a new executive’s strengths, a key element in making the best decision is to discern whether or not the flip side of the candidate presents is significant enough to put the potential hire at risk.
There are several steps that can help you improve the probability of successful executive succession:
1. Assess the context: Executive succession is a strategic process and, as such, scenario planning should be used to determine the best candidate. Decision makers need to think through and elaborate the multiple dimensions, possibilities and desired criteria that will be used to match these against a candidate’s history, skills, potential and attributes. At the CEO level, this includes external constraints and board dynamics. There is ample evidence to suggest that a significant mismatch on any major dimension, including current or desired corporate culture, can either limit or derail a potential high performer.
2. Assess the final candidate(s). For most candidates who achieve this level of accomplishment, it is rarely an issue of whether or not they can “do” the job. It is more about their abilities to do the job in a particular time and culture and with a particular set of challenges and opportunities ahead of them. Ultimately, the process is about making choices and understanding the tradeoffs of any particular decision path. A well designed executive selection process that includes an in depth objective assessment by a professionally trained selection psychologist can reliably and validly do this for you and formulate appropriate steps that will help ensure a candidate’s successful performance.
3. Optimize (vs Maximize) the match. Although rare, there are cases where too strong of a fit between a candidate and a role can limit the potential of both the individual and the organization to make changes. This is a greater risk with internal candidates. On the other hand, lack of fit also can undermine individual and corporate performance. One often sees this in external candidates brought in to reinvent the organization when it has no “burning platform” or neither the organization nor board is strongly committed to a change direction. The best choice often is by matching the candidate with probable environmental change demands.
4. Ask for and Take advantage of frank discussions with service providers. It is usually a frank conversation that will be most helpful in making an effective decision. During these conversations, the assets and potential liabilities of each candidate can be compared, hypothetical scenarios played out, additional questions asked about the importance of specific criteria and, should the finalist(s) not be appropriate, can guide continued search efforts.
Even when engaging fully in these steps, risks can be managed further by taking the candidate who ultimately is hired through an early onboarding process to jumpstart his/her performance, clarifying short, medium and first year expectations and holding the new executive fully accountable for aspects of the business that are under his or her control. In my experience, even taking a small effort in onboarding by providing candidate feedback and clarifying expectations between the hiring manager or Board Chair and the newly hired executive can elucidate how to avoid pitfalls early in the relationship.

This blog is an update from an article written by the author that appeared in the Boston Business Journal (July 31, 1998).

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