Onboarding externally hired

Transcription

1 Copyright econtent Management Pty Ltd. Journal of Management & Organization (2011) 17: Onboarding externally hired executives: Avoiding derailment accelerating contribution GUANGRONG DAI, KENNETH P DE MEUSE AND DEE GAEDDERT Korn/Ferry Leadership & Talent Consulting, Los Angeles, CA, USA ABSTRACT Executive onboarding has become a popular technique in the business world during the past decade. However, the demonstrated success of traditional onboarding practices is mixed. We assert in this article that executive onboarding should be strategic, so that it not only prevents executive derailment, but accelerates contribution to optimize strategic achievement. We review the literature and identify six problematic areas externally hired executives often encounter when transitioning in to new organizations. It is recommended that effective onboarding should be tailored to the targeted organizations and executives to address specific transition issues. We propose a conceptual framework to implement onboarding on a strategic basis. It is hoped that such a review and conceptual discussion will enhance the effectiveness of onboarding experiences and increase the likelihood of success for executives hired from outside the organization. Keywords: onboarding, management transition, leadership development, coaching, strategic HR, executive derailment INTRODUCTION The updating of leadership competencies and the broadening of leadership experiences particularly at the senior executive level has become a key strategy for many organizations as they attempt to adapt to the uncertain business environment (Finkelstein & Hambrick, 1996; Olson, van Bever, & Verry, 2008). Increasingly, companies are looking outside their organization for fresh leadership to keep globally competitive (BusinessWeek, 1993; Sessa & Taylor, 2000). It has been estimated that more than one-third of the Fortune 1000 Companies are led by CEOs who were recruited externally (cited in Charan, 2005). Among the 136 CEOs replaced during 2008 in the Standards and Poor s Index representing nearly 1300 firms, 28% were hired from outside the company (Tuna, 2008). In fact, Sessa and Taylor (2000) observed a growing favoritism toward outside executives. Their research found that when selection committees are open to considering both internal and external candidates, an external candidate is chosen 75% of the time. Externally hired executives usually are prized for their new skills and different perspectives, as well as their willingness to implement change (Harris & Helfat, 1997). However, organizations need to actively help these newly hired executives transition into their new positions if they want to reap the benefits from outside hiring. Research reveals that when assistance is Volume 17, Issue 2, March 2011 JOURNAL OF MANAGEMENT & ORGANIZATION 165

2 Guangrong Dai, Kenneth P De Meuse and Dee Gaeddert not provided, external hires are more likely to fail than insiders promoted in to such positions (Charan, 2005; Ciampa & Watkins, 1999a; Zhang, 2008). Executive onboarding frequently has been used by companies during the past years to assist senior executives through the transition. Unfortunately, onboarding as it is typically implemented appears to have had little impact on improving executive hiring success rates. One reason for this outcome is that the onboarding experiences in many companies are merely modest extensions of socialization practices and new employee orientation techniques that have been around for decades. Little emphasis and effort are given to the unique nature of corporate executives and the strategic focus of their jobs. Further, the literature has provided no theoretical framework of executive onboarding to assist organizations in the development of effective onboarding practices. In this article, we initially discuss the difference between executive onboarding and traditional practices employed in helping new hires. Subsequently, we identify six problems externally hired executives often face in their new positions. We suggest that tailored onboarding can help newly such hired executives effectively deal with these six problem areas. Most importantly, we review how executive onboarding when properly applied can assist newly hired executives more quickly and successfully achieve the strategic goals of the organization. Finally, a conceptual framework of executive onboarding is proposed. THE EVOLUTION OF PRACTICES TO HELP ONBOARD NEW HIRES Research has clearly shown that attitudes and beliefs new hires develop toward their organization generally form very early on the job and remain relatively stable over time (Bauer & Green, 1994; Wanous, 1973). One study found that 90% of new employees make their decision to stay at a company within the first 6 months of employment (Aberdeen Research, 2006). Ironically, research also suggests that it takes a mid-to-senior-level manager an average 6.2 months to reach a break-even point. It is the date when the new manager s contribution to the organization begins to surpass the company s cost of employing the manager and bringing him or her up to speed (Wells, 2005). It is important to understand that the breakeven point is defined in terms of contribution, not necessarily optimal contribution. It may take even longer before the new hire reaches the level of optimal contribution. Therefore, it is critical for organizations to proactively help new hires make a successful transition into their new position and environment as early as possible. It is especially critical for newly hired leaders. According to Bradt, Check, and Pedraza (2006), 40% of leaders going into new organizational roles fail during their first 18 months. The estimated organizational costs of just one such failed executive-level hire can be as high as $2.7 million (Bossert, 2004). With the recent skyrocketing salaries of newly hired executives, this figure is sure to rise in the future. Although the term executive onboarding is relatively new in the academic world, organizations have been using new employee orientation programs and socialization techniques for a long, long time. The focus of new employee orientation is on the introduction of the new employee to company policies and procedures, and to provide them realistic information regarding the new work environment. The objective of socialization, in contrast, tends to be on the development of a collective organizational identity and the creation of a feeling of belongingness through learning the people, politics, language, values, and history of the organization (Van Maanen & Schein, 1979). Executive onboarding is a process directly focused on actively integrating new executives or senior-level managers into the company. Typically, onboarding includes an initial new employee orientation process. However, onboarding activities continue for the ensuing 3 6 months or however long 166 JOURNAL OF MANAGEMENT & ORGANIZATION Volume 17, Issue 2, March 2011

3 Onboarding externally hired executives it takes to get the new executive up to speed in a particular company or function (Lee, 2006). Traditionally, scholars have specified two key performance indicators of the onboarding process: (a) engagement and retention of the new hire, and (b) time to productivity (Conger & Fishel, 2008). See Figure 1. The empirical evidence on onboarding suggests that the efficacy of traditional activities is suspect. A recent study found that only 30% of global executives were satisfied with their onboarding experience. In contrast, 32% rated it as poor or below average (Pomeroy, 2006). Another onboarding study of more than 100 organizational leaders, ranging from senior-level managers to CEOs, reported only 39% were satisfied with their company s efforts to integrate them into their new organizations (Wells, 2005). A primary reason for these low ratings appears to be that many companies simply are continuing to employ ordinary orientation and socialization techniques to onboard new executives. For example, some companies seem to view onboarding as a check list of disjointed activities rather than an integrated process of executive involvement. In addition, there is frequently unclear ownership of onboarding tasks between the human resources (HR) staff and the hiring manager. Newcomers often become overwhelmed during the first few days on the job when companies end up cramming lots of FIGURE 1: THE BREAKEVEN POINT FOLLOWING AN EXECUTIVE S ENTRY INTO AN ORGANIZATION. information (such as policies and procedures, organizational structure and culture, and significant people) into a few mind-numbing hours. Typical onboarding activities tend to be reactive and emergency driven with little or no plan, using a no news is good news or an out of sight out of mind approach to follow-up newcomers. Many organizations assume that new leaders possess the social skills and business understanding to tap the organizational network themselves, so they invest little time introducing new leaders around the company. However, without some initial support and a framework for learning, many leaders find it difficult to reach out to new colleagues by themselves. Practitioners have begun to scrutinize the concept of onboarding in recent years, suggesting a variety of so-called onboarding best practices. For illustration, it has been recommended that onboarding should be integrated in to the overall hiring management process (Snell, 2006) and extended to (at least) the first 6 months of employment (Aberdeen Research, 2006). It also has been suggested that companies should take advantage of web-based technology to automate processes for employee onboarding (Aberdeen Research, 2008). In addition, it is widely agreed that HR should take a central role in the onboarding process (Wells, 2005), and that the involvement of senior leadership and multiple (stakeholder) resources needs to occur (Conger & Fishel, 2008). These best practices focus most of the attention on implementation and procedural elements. There is a lack of theoretical discussion regarding what specific problem areas onboarding should address to assist newly hired executive-level employees. We contend that executive onboarding should differ from traditional new employee orientation and socialization in several ways. First, onboarding practices should focus on actively integrating new senior-level managers and executives into the company. Second, there typically are strategic intentions for organizations when external executives are hired. While employee orientation Volume 17, Issue 2, March 2011 JOURNAL OF MANAGEMENT & ORGANIZATION 167

4 Guangrong Dai, Kenneth P De Meuse and Dee Gaeddert and socialization can help new employees adapt to the culture and business environment of the hiring organizations, the assimilation of the new executive into the status quo may not match the strategic intention for which the high level outside executive originally was hired. Third, executive onboarding involves some stakeholders not included in a typical new employee orientation or socialization program (e.g., premier customers, board members). Fourth, and most importantly, organizations generally follow a routine process to orient and socialize newcomers for lower level employees. In contrast, new executives face many different and unique situations. Effective onboarding should be tailored to the specific needs of organizations and the newly hired executives. Overall, executive onboarding transcends new employee orientation and socialization. There are unique factors influencing new executives transition. Executives are likely to derail if the organization fails to address these areas. More importantly, an effective onboarding process will enhance the probability of achieving the hiring organizations strategic goals. Successful onboarding helps organizations achieve strategic optimization of the external hire. We propose a model of executive onboarding that encompasses four objectives: (a) avoiding derailment, (b) fostering retention, (c) catalyzing acceleration, and (d) achieving optimization. See Figure 2. In this model, we theorize that return on investment FIGURE 2: FOUR OBJECTIVES OF EXECUTIVE ONBOARDING. (ROI) increases as the focus of the onboarding moves from the left (reactive and tactical) to the right (proactive and strategic) as onboarding activities become more closely related to strategic performance goals. ONBOARDING EXTERNAL EXECUTIVES: SIX STRATEGIC AREAS TO ADDRESS Before we can specify what strategic content areas onboarding should focus on, it is important to understand the factors related to the success or failure of newly hired external executives. The first author reviewed the management and leadership literature, particularly succession studies, to identify critical onboarding content areas. During this review, an effort was made to understand what specific issues the studies were addressing. Those specific issues then were abstracted at a higher conceptual level. Two decision criteria were employed to categorize the critical onboarding areas: (a) was there sufficient evidence to support the importance of the area and (b) did the study address the onboarding issue from different perspectives. The literature review and abstraction process led to the identification of six areas appearing to directly impact the derailment of new executives and the achievement of strategic goals. Subsequently, the second and third authors independently confirmed the relevancy and importance of these six onboarding areas based on their executive coaching and onboarding experience. In the following section, we discuss each of the areas and propose how onboarding when implemented strategically can help newly hired executives make a smooth transition into a new organizational environment and successfully perform their strategic roles. All the six onboarding areas are related to preventing derailment and accelerating contribution. But they are presented in a sequence reflecting the idea that initial factors affect derailment more than performance contribution, whereas effective intervention on the later factors are more important to achieving strategic performance goals. 168 JOURNAL OF MANAGEMENT & ORGANIZATION Volume 17, Issue 2, March 2011

5 Onboarding externally hired executives Proposition I: Addressing position imprint of predecessor The fact that the former CEO can influence a successor s performance is well documented in the literature. In the book entitled, The Hero s Farewell, Sonnenfeld (1988) described the following four types of executive departure style: (a) the monarch, (b) the general, (c) the ambassador, and (d) the governor. Succession is especially difficult under the first two departure styles. According to Sonnenfeld, monarchs do not believe in a planned succession process. Hence, the transition of power from a monarch to a successor is not smooth, and sometimes can be brutal. Likewise, chief executives who leave office in the general s departure style have a strong ongoing need to establish a lasting legacy. The corporate general s desire to continue to direct the firm s activities makes it very difficult for them to depart quietly. When there are opportunities, they will charge back to regain their lost command. Successors frequently experience tremendous stress when they replace highly successful, retired executives. Internal employees tend to measure the successors performance against their predecessors, and so does the outside public. As an example, since succeeding Jack Welch, Jeff Immelt has been under media scrutiny repeatedly. Recently, BusinessWeek examined the performance of General Electric (GE) under Jeff Immelt relative to Jack Welch, Reginald Jones, Fred Borch, and Ralph Cordiner (McGregor, 2008). Cordiner was CEO of GE half a century ago. Replacing the most celebrated CEO (Jack Welch) of his generation, Immelt inherited an inflated stock price that fostered unrealistic expectations. Although Immelt managed to produce double-digit percentage growth in annual earnings and annual revenue gains over the first few years of his term, the market responded by a negative 30.2% in stock return, the worst compared to his four predecessors. Burton and Beckman (2007) investigated how position imprints left by predecessors can constrain subsequent position holders. Position imprints refer to the key expectations regarding how the position holder should conduct his or her job. Predecessors tend to establish an initial allocation of tasks and responsibilities that map to their own experiences. Once established, the job descriptions, job titles, and internal selection criteria become tangible manifestations of position expectations. These initial boundaries are further solidified through interaction with other position holders who develop expectations about what the position entails, how its tasks should be accomplished, and what kind of individual is best suited to fill the position. The properties of the position are passed from position taker to position taker, because the people making the hiring decision, as well as existing employees who interact with the position, have preconceived expectations regarding the boundaries of responsibilities, the requisite skills, and the metrics of success for the position. When a successor steps in, how much the executive matches the position imprint can greatly impact his or her perceived performance. Burton and Beckman (2007) observed that successors who did not match the position imprints were more likely to turnover. Logically, the position imprint will influence externally hired CEOs more than internally groomed ones, since the former has less of a historical view of the position than the latter. We propose that executive onboarding should significantly enhance the new hires awareness of the potential position imprints and help them understand the do s and taboos of the new position. Proposition II: Setting clear performance and contribution expectations At the time this article was written, one of the authors was coaching a senior executive at a manufacturing company in the Midwest. There was much tension between the coached executive and his boss, the CEO. During one-on-one conversations with both of them, it was discovered Volume 17, Issue 2, March 2011 JOURNAL OF MANAGEMENT & ORGANIZATION 169

6 Guangrong Dai, Kenneth P De Meuse and Dee Gaeddert that the source of this tension was due largely to a misalignment of performance expectations. The executive perceived he was brought in to the company to act as a change agent, but the CEO never had such an expectation. Traditionally, realistic job previews (RJP) were used to provide applicants with information on various positive and negative aspects of the job, such as pay, benefits, work hours, stress, and degree of physical risk (Wanous, 1973). The assumption was that such realistic information about the job would lead to an accurate evaluation of job fit by the candidate and decrease the likelihood of subsequent on-the-job disillusionment. In The 7 Hidden Reasons Employees Leave, Branham (2005) identified unrealistic expectations as the number one reason why employees disengage and quit. We suggest that RJP should expand beyond job conditions and rewards to include performance expectations. In other words, newly hired executives should have a realistic perspective of what is expected of them in terms of performance objectives and time lines. For example, is organizational change desired? Why? What is the role of the executive in implementing such change? Are there any time frames? What are the cost parameters? The clarification of performance expectations will determine how the new executive is assimilated into the organization. If continuity is preferred, then onboarding can help the new executives adjust to the organization s current structure, policies, and culture. In contrast, if innovation and change is preferred, it might be in the organization s interest to prevent the newly hired executive from being socialized into the old organizational culture (Ashforth & Saks, 1996; Ashforth, Slus, & Saks, 2007). Consequently, the strategic onboarding experience of the external executive should be congruent with the expected performance goals and contributions. One may assert that role specification already is an integrated part of the executive search and selection process. Indeed, executive search typically starts with role specification. There is no way that search and recruitment committees can determine the selection criteria and evaluate the candidates without a clear understanding of position requirements. However, executive selection should not be treated as a static, one-time decision made by organizations (Baughman, Dorsey, & Schalm, 2009). Business contexts and organizational dynamics frequently change. Once selected and placed, executive success is largely a function of the ongoing management of person-to-role fit. In the transition phase, organization stakeholders and hired executives should continue to communicate and update performance expectations in response to the dynamic business requirements (National Association of Corporate Directors, 2004). Proposition III: Recognizing that parts of leadership are not transportable For a long time, scholars have identified three types of functional management skills: (a) firmspecific skills, (b) industry-specific skills, and (c) generic skills which are transferable across firms and industries (Becker, 1964; Harris & Helfat, 1997). Executives may find it easy to make the transition into a new job role or environment, depending on whether the transition is across firms or industries. GE often is viewed as a talent machine for churning out corporate leaders. Between 1989 and 2001, nearly two dozen former GE executives had been appointed chairman, CEO, or CEO-designate in various companies. On average, the stock market reaction to the hiring announcement was a gain of about $1.3 billion for the hiring corporation, but no change in GE s share price at the time of the hiring (Economist, 2003). However, not all GE alumni delivered on their promise. Groysberg, McLean, and Nohria (2006) investigated the individual performance of 20 GE alumni, as well as the needs and strategies of the corporations that hired them. This study found that many of these gifted executives did not make star CEOs. According to the authors, there are many different types of leadership skills 170 JOURNAL OF MANAGEMENT & ORGANIZATION Volume 17, Issue 2, March 2011

7 Onboarding externally hired executives we need to consider. Some of these leadership skills are transportable from company to company, while others are not. The most transportable skills encompass general management such as decision making, functional expertise, and operating skills. The least transportable leadership skills are company-specific such as the social relationships with other team members or colleagues. Groysberg et al. (2006) contend that some of the GE alumni failed because of these least transportable leadership skills. There is a controversy in the field of leadership. Some authors assert that a leader is a leader and great leaders will be able to operate in multiple domains (Spencer & Spencer, 1993). For example, Lou Gerstner s success at IBM often is cited to support this argument. Other experts are of the opinion that leadership is domain specific (McCall & Hollenbeck, 2008). We posit that general management skills are fundamental to executive success. At the same time, we acknowledge that domain specific knowledge and skills (such as the general knowledge about the industry in which a company is operating) also are crucial to the executive performance. It is essential for new executives to be sufficiently flexible to learn new skills and develop those least transportable capabilities when they cross business domains. Thus, we propose that onboarding should help build new hires least transportable leadership skills. Proposition IV: Providing outside hires with inside views One reason why companies look outside their organization for new hires is due to a lack of talent. A company may not possess the culture or the systems to grow their future leaders. Thus, such organizations have no choice but to look outside. Companies also search for fresh leadership when they are in extreme financial difficulty and desire strategic change (Shen & Cannella, 2003). In this case, outsiders have several advantages over insiders (Bower, 2007; Charan, 2005). They are more likely to have broader views and see greater potential for radical improvement than existing executives. They also do not have the psychological ties perceived and real within the hiring organizations that may complicate efforts to change the organization. On the other hand, outsiders possess some key disadvantages as well. They may not understand company traditions, history, the customer base, the employees, and mostly importantly, the source(s) of problems. Outsiders have little first-hand knowledge of the organization and no prior assessment of the relevant issues. Some outsiders quickly jump to immature solutions. Others misdiagnose the situation or implement significant changes in unreasonable time frames that are not tolerated by various stakeholders. In the book titled, The Dynamics of Taking Charge, Gabarro (1987) described four stages of change: (a) taking hold, (b) immersion, (c) reshaping, and (d) consolidation. It can take 2 3 years to complete a significant organizational change according to Gabarro. Some types of corporate strategic change may take an even longer time (Kotter, 1995), depending on its depth and width and how fundamentally different it is from the previous business model. However, business owners, boards of directors, and investors are becoming increasingly impatient (Economist, 2003; Grube, 1995). For example, these days owners of professional sports may fire the head coach if a team has one bad season. The same consequence occurs in the business world. It is not unusual for a newly hired external executive who is perceived to be failing to be quickly terminated. New executives do not have the luxury of slow growth or delayed turnarounds. Consider the shrinking tenure of CEOs. In 2007, the average global CEO tenure was 6 years. Fully, one-third of CEOs who exited did so against their will (Weber Shandwick, 2008). Therefore, it is absolutely critical to accelerate outsiders accumulation of the inside views so that informed, effective changes can be made quickly. Onboarding can greatly accelerate an executive s learning process. Volume 17, Issue 2, March 2011 JOURNAL OF MANAGEMENT & ORGANIZATION 171

8 Guangrong Dai, Kenneth P De Meuse and Dee Gaeddert Proposition V: Preparing the organization for change Oftentimes, companies hire outsiders for fresh leadership, especially in cases when firms are not performing well. The hope is that an outsider will initiate organizational changes that are long overdue (Wiersema, 2002; Zhang & Rajagopalan, 2005). However, there can be internal resistance that is sufficiently strong to make the new executive fail. A Harvard Business Review case study illustrates this point (see McNulty, 2002). In the case, a newly hired CEO desired to implement an aggressive expansion plan for her company. The company was a 94-year-old manufacturer of high quality wooden toys located in the Midwest. To make the situation more interesting, she was the first person from outside the family to hold the top job. She had many ideas for new products, planned to establish manufacturing capabilities offshore, and wanted everything moving very quickly. She also had the corner office a space that had been the CEO s office for generations converted into a conference room. She envisioned such a move would symbolize that things were going to be different. Not too surprisingly, the expansion plans hit the wall, and people were not following her innovative leadership style. New executives frequently arrive and declare, Here s my vision, let s go forward. They neglect to create any sense of urgency about why change is needed or what might be other people s vision. Change guru, John Kotter, asserted that if the sense of urgency is not sufficiently high at the beginning of any organizational change project, complacency eventually will win out (Kotter, 2008). When change is perceived as necessary, new executives have to transform complacency and the anger and anxiety associated with the perceived problems into an active determination to move forward. People throughout the organization must be ready for and supportive of the change. Ironically, Zhang and Rajagopalan s (2005) research indicated that outside CEOs are no better equipped to turn around poor performance than internally groomed successors. When organizational change is the major reason for the succession, the onboarding process must help the new executive assess the readiness of the organization for change and build a culture of changeability into the organization before initiating change. Other times, organizations do not know what they need and look to the newly appointed incumbent for direction. These organizations are not good at recognizing the necessity for change let alone determining antecedents to change to make the appointment process a smooth transition. It is even more important for the onboarding process to help the newly hired top executive assess the organizational readiness in these situations when strategic change is determined necessary. Proposition VI: Building an effective senior leadership team Finally, new executives will likely fail to implement their strategic initiatives and achieve any meaningful organizational contributions unless they are able to build an effective senior team to support them (Lombardo, Ruderman, & McCauley, 1988; McCall & Lombardo, 1983; Van Velsor & Leslie, 1995). The building of an effective team is especially critical when executives come into a new environment. Ciampa and Watkins (1999b, p. 195) asserted, No matter how effective they are at learning and visioning, new leaders will fail if they are unable to muster a critical mass of support for their initiatives. In his book, Good to Great, Collins (2001, p. 42) observed that: the executives who ignited the transformations from good to great did not first figure out where to drive the bus and then get people to take it there. No, they first got the right people on the bus (and wrong people off the bus) and then figured out where to drive it. New executives occasionally will bring with them a team of former colleagues. However, it should be understood that this approach 172 JOURNAL OF MANAGEMENT & ORGANIZATION Volume 17, Issue 2, March 2011

9 Onboarding externally hired executives inadvertently may induce organizational disruption, leading to unnecessary management turnover and sagging workplace morale (Friedman & Saul, 1991). The newly hired outside executive must network across the organization and build support teams in the new environment. Such relationship building represents one of the least transportable leadership skills that executives possess. Hughes, Ginnett, and Curphy (2002) claimed that up to one-half of the leaders in organizations today do not build cohesive teams, greatly reducing the likelihood of achieving their desired business results. A key characteristic of executive onboarding needs to be directed at the process of building cohesive teams throughout the organization and, in particular, at the senior leadership level. DISCUSSION Conger and Nadler (2004) stated that when internally promoted CEOs fail, the blame for these costly and puzzling failures cannot be placed solely on the derailed CEOs shoulders. It is particularly true for externally hired CEOs. When external executives fail, both personal and organizational causes are responsible for the derailment. In this article, we proposed a model of executive onboarding that encompass four key objectives preventing derailment, fostering retention, catalyzing performance acceleration, and achieving strategic optimization. We further identified six problematic areas on which to focus executive onboarding. These areas may not be exhaustive, but represent an initial attempt to understand the tough situations externally hired executives are likely to face. Businesses should focus beyond the traditional onboarding procedural-related issues to directly help such new executives enhance their performance strategically. Effective onboarding should be tailored to new executives and hiring organizations One implication of our research is the recognition that no single, fixed onboarding activity can be applied to all situations. Effective onboarding needs to be tailored to the organization and the executive. The onboarding experience should begin with an assessment to identify areas relevant to a specific executive s transition situation. For instance, readiness for change might be a problem for some organizations, but not others. Likewise, development of support teams might be a critical issue for some executives, but not others. Organizations should not jump into routine onboarding processes without fully understanding what strategic issues are likely to derail their newly hired executives and hinder their achievement of strategic goals. Some of these critical areas may be primarily under the control of the executives themselves. In these situations, executive coaching should be provided to facilitate the new executives transition into the new roles and environment. Other areas may be more directly under the control of the organization itself. In these instances, companies need to proactively remove obstacles that can adversely affect the performance of the new executive. Regardless of the source of the problem, successful onboarding requires effort from both the new executive and the hiring organization. Take the predecessor position imprint as one example. Conger and Nadler (2004) illustrate vividly how predecessors can impact the new executives performance. Accordingly, the authors describe how boards of directors and the outgoing executives need to assume part of the responsibility for early-tenure executive flameouts. At the same time, Conger and Nadler (2004) suggest that the new executives should proactively seek to understand the challenges the predecessors left behind. It is important for the new executive to find out as much as possible about initiatives launched in recent years by the departing executive. It also is prudent for the new executive to talk extensively with employees and company clients to understand their perceptions and their expectations. The probability of success is increased markedly when the new executive Volume 17, Issue 2, March 2011 JOURNAL OF MANAGEMENT & ORGANIZATION 173

10 Guangrong Dai, Kenneth P De Meuse and Dee Gaeddert understands his or her predecessor s legacy and position imprints. Take leadership skill as another example. Naturally, an organization will have conducted due diligence to match the executive to the position. However, even with the most rigorous background checks and behavioral assessments, new executives may have some unforeseen weaknesses that can prevent them from optimizing their performance in the new position. It is important to remember that there exists information asymmetry between the organization and potential outside executive candidates during the recruitment and selection process (Zhang, 2008). Consequently, it is difficult for organizations to fully assess and understand candidates. In addition, the constantly changing business environment imposes new leadership requirements on individuals. Newly hired executives should be aware of their strengths as well as weaknesses and be receptive to develop competencies required for the job (Ancona, Malone, Orlikowski, & Senge, 2007). While this point might seem like common sense, many top executives apparently fail to do it, as evidenced by the high rate of executive derailment (Finkelstein, 2003; Hogan, Hogan, & Kaiser, 2010). Likewise, organizations need to assume some of the responsibilities to develop their new executives. Companies can assist by providing feedback, coaching, and developmental opportunities. In some instances, organizations might consider building a team around the new executive to compensate for his or her weaknesses. A conceptual framework of strategic executive onboarding Table 1 depicts the conceptual framework of our executive onboarding propositions. On the left of the table, the six critical areas provide concrete direction for the onboarding effort. On the right, the positive results of effective onboarding are presented. These consequences fall into two broad categories direct effects of the onboarding process and strategic outcomes for executives and organizations. The direct effects correspond to the critical areas the onboarding process is designed to address. For example, if unclear performance expectations are a concern, executives will gain an enhanced understanding of their role as a result of the onboarding and prioritize organizational initiatives. Strategic outcomes also are more likely to occur, because the onboarding explicitly addresses specific issues pertaining to the newly hired executive. In the middle of the table, key onboarding activities are highlighted. Based on the above discussion, we recommend that executive onboarding should consist of the following critical activities: (a) carefully analyzing the unique situation the newly hired executive is entering, (b) planning and implementing the onboarding experience based on that analysis, (c) actively involving all key stakeholders during the onboarding process, (d) providing ongoing assistance and developmental opportunities, and (e) monitoring the process and subsequently remolding the onboarding accordingly. The purpose of the situational analysis is to understand the organizational context and identify obstacles that may hinder the new executive s transition to the new job and business environment. The six strategic onboarding areas discussed here provide direction for this analysis. Based on the initial assessment, an onboarding plan can be crafted to specify the focus of the intervention as well as specific onboarding objectives and milestones. Most importantly, the onboarding should involve key stakeholders. Depending on the areas to be addressed, stakeholders may be different from one organization to the next and from executive to executive. Ask questions such as who is critical to the new executive s future success in this organization? And what specific onboarding issues are related to the key stakeholders? In some situations, key stakeholders (e.g., a monarch CEO) are the targets of the intervention. Other times, key stakeholders can facilitate the new executive s transition by 174 JOURNAL OF MANAGEMENT & ORGANIZATION Volume 17, Issue 2, March 2011

11 Onboarding externally hired executives TABLE 1: A CONCEPTUAL FRAMEWORK OF THE EXECUTIVE ONBOARDING PROCESS FOR SENIOR LEADERS Critical onboarding areas Strategic onboarding activities Onboarding results Addressing position imprint of predecessor Setting clear expectations Recognizing non-portable aspects of leadership Providing outside hires with inside views Preparing the organization for change Building an effective senior team Situational analysis Organizational objectives Enabling and derailing factors Onboarding plan Focus Prioritize Execute Key stakeholder involvement Board and/or HR Boss Peers Direct reports Important others Ongoing support Periodic pulse check Feedback and coaching Monitoring the onboarding process Reanalyze the situation Reset priorities Evaluate the effectiveness Direct effects Smooth power transition from predecessor to successor Self awareness and leadership Strategic understanding of the role Enhanced understanding of organization Prepared organization for strategic Strategic Outcomes Shortened breakeven point Increased job satisfaction Enhanced retention Achievement of organizational strategic goals providing coaching and counseling. If necessary, external coaches can be hired to help new executives. Bottom-line Executive onboarding needs to be strategic. It is the fundamental difference between executive onboarding and new employee orientation and socialization programs. Prior to onboarding the new executive, organizations should understand what their strategic goals are, how the newly hired executive will play a role in achieving them, what the mission critical skills are required to accomplish them, and how organizational dynamics might enable or hinder the new executive s strategic initiatives. Very often, external hires are part of the company s strategic plans. Thus, it is necessary for the executive onboarding activities to be aligned to achieve these strategic plans. Organizational moderators In this article, we proposed a generic conceptual framework of strategic executive onboarding. However, the reader should realize that there may be organizational and industrial factors that impact the salience of the six onboarding issues we reviewed. We will briefly discuss some of these moderating factors in the following paragraphs. When discussing these factors, we do not necessarily make firm conclusions. Rather, we view them as topics worth further investigation. Volume 17, Issue 2, March 2011 JOURNAL OF MANAGEMENT & ORGANIZATION 175

12 Guangrong Dai, Kenneth P De Meuse and Dee Gaeddert Structure of the senior management team Stratification, or the differences in rank among individual members of the senior management team, is an important property of team structure. The centralization of power may be instrumental to a new top executive s decision making capability. On the other hand, when the distribution of power within a top team is balanced, a broad participation and information sharing is needed to making decisions within the team. Failure to address the team issue in this situation likely would be detrimental to a new executive s performance in the new environment. Organizational life cycle Organizations progress through predictable phases of development known as life cycles. Entering entrepreneurial organizations as opposed to mature ones may present different challenges to new executives. For example, succeeding a successful founder in an entrepreneurial organization might be more difficult than succeeding a top executive in a mature one, because founders are more likely to leave strong position imprints than executives in mature companies. On the other hand, as companies mature, bureaucracy starts, making it harder for new executives to execute strategic change. Organizational type One of the major purposes of executive onboarding is to help new executives gain an insider view. It is believed that the earlier it starts, the better the outcomes. However, the information new executives obtain may be influenced by organizational type. For example, new executives can obtain much information about public companies even before they start the job. It is not so easy to reach information regarding private organizations. Therefore, onboarding may be particularly important for new executives entering private organizations. Temporal mental model Temporal mental model refers to an organization s preference toward pace and time orientation. Logically, new executives will feel more pressure to accelerate their learning when they enter organizations that prefer a fast pace and short-term orientation than a slow pace and long-term orientation. Temporal mental model is influenced largely by industry. In a very dynamic and competitive industry (e.g., IT or retail), organizations usually adopt a fast pace and/or short-term orientation. In contrast, organizations in stable industries, such as utility, often adopt a slow pace and/or long-term orientation. This industrial difference may influence the perceived necessity to onboard executive. CONCLUSION Like many other concepts (e.g., coaching, employee engagement, management by objectives), executive onboarding was initiated in the business world. The conceptual and theoretical exploration of this concept by scholars has lagged far behind its application. Although there have been some best practices proposed by practitioners, we believe that the content domain of executive onboarding has been much less studied. This article represents a first step to identify the strategic components of executive onboarding. It is expected that both practitioners and academicians will benefit from this research. We hope that it helps practitioners refocus their attention on implementing an onboarding experience for newly hired executives that capitalizes on the unique nature of their organizational roles. Further, we hope our review provides researchers a systematic way to investigate the causes and effects of onboarding senior business leaders. References Aberdeen Research (2006, August). Onboarding benchmark report: Technology drivers help. Accessed January 9, 2007 from JOURNAL OF MANAGEMENT & ORGANIZATION Volume 17, Issue 2, March 2011

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