Executive On-Boarding

Executive Turnover and On-boarding

The rate of executive turnover has increased over the past decade to an all-time high. Although many organizations spend substantial amounts to attract key talent, too few dedicate sufficient resources to ensure that newly hired executives successfully deliver results within an appropriate period of time.

  • The frequency of reported CEO turnover has continued to be high and rising since 2006, now averaging 109 per month; the average tenure of a Fortune 500 CEO is less than 4 years
  • HBR and others report that the failure rate for newly hired key executives is in the range of 40% to 60% after 18 months
  • The Corporate Leadership Council has found that 50% of newly hired key executives quit or are fired within their first 18 months
  • The direct cost of a failed newly hired key executive is often millions of dollars and the indirect cost can exceed tens of millions of dollars in business financial impact
  • An effective on-boarding process has been shown to reduce early turnover of newly hired key executives by 60% to 70%; BCG has reported that companies with strong executive on-boarding processes see profit growth of 2.5X of those who don’t

All too often, a company’s on-boarding process is either non-existent or composed of only administrative or “meet and greet” activities that focus on the first 100 days. When asked about their on-boarding experience, most key executives say it was self-directed. Some have taken charge of this effectively; many others have not. 

On-Boarding Survey Results

From a recent survey of nearly 30 CEO’s and their respective heads of Human Resources. Here is a sampling of what we heard:

  • “If someone hasn’t made a positive contribution within 12 months, you’ve picked the wrong person.”
  • “You’ve got to give a new executive several things: quick wins, a clear strategy and business plan, clarity about what you’re willing to change, support for the culture changes they bring in, and clear performance goals.”
  • “If you had early knowledge about the individual’s strengths and weaknesses, you could effectively adapt your on-boarding approach. On-boarding is a custom thing … the same size doesn’t fit all. The approach has to be changed based on the personality and situation.”
  • “In your relationship with a new executive, you can tip-toe around too much. I learned that you need to quickly have an honest dialogue about the situation and what they need to get done."

Our research and 25+ years of experience of working with senior executive teams have led to these conclusions: 

  • More than just the first 100-days, successful on-boarding is tailored to the executive and the situation, and involves the boss, peers and other stakeholders (e.g., board members).
  • Most new executives report that the second year is much harder than the first; one is expected to have a clear vision and plan and be well on the way to executing it by then.
  • New executives have the most difficulty in successfully ramping-up within companies that are defined by strong cultures and or that have highly-tenured executive teams
  • The new executive’s boss should set clear expectations for a balanced focus on strategy, people and execution by the time the initial “honeymoon” period has concluded 

Dr. Wiley's Executive On-Boarding Consulting

We provide guidance and support to help new executives and their teams quickly acclimate to each other, focus on top priorities, achieve early wins and set in motion a longer-term plan for a successful ramp-up. Our approach explicitly builds three-way accountability for successful on-boarding. We help ensure that proactive, planned roles are played by the executive, the boss and key stakeholders. We begin by working with the boss to articulate the context, expectations and challenges for the new position, including well-defined success metrics. We then work with the new executive to:

  1. Identify initial on-boarding priorities; if a pre-hire assessment was completed, it serves as the foundation for ‘Entry’ and ‘Integration’ coaching.
  2. Assess and enhance the capability of his/her team.
  3. Assist in acclimating to the new culture and support the development of peer and key stakeholder connections.
  4. Develop a performance plan and scorecard containing specific goals for the first 1-2 years covering strategy, people and execution.
  5. Provide as-needed support in the first 1 – 2 years in developing the effectiveness of his or her team.