By Paul Bohne
In 2015, CEO turnover at the largest companies in the world was at an all time high. Why? These are volatile times across industries, of course. And there can be many specific explanations for CEO exits, including failure to establish partnerships with the board or colleagues, to establish a cultural fit, or to understand the requirements of the role. And some CEOs leave just to pursue other opportunities.
Whatever the reason, the board’s handling of the transitional period is critical. In 2013 I wrote an article for The Corporate Board (summarized here) focusing on the exiting CEO and the role the board should play in ensuring a smooth transition away from the company for their former leader. (One interesting point: Such a transition can be an emotionally wrenching time for the outgoing executive.) Recently, I again approached the topic of CEO transition. This time, in an article for Directors and Boards entitled “Effective CEO Transitioning,” I look at the responsibility of the board as it relates to the onboarding of the new leader.
Onboarding is an invaluable part of any leadership transition, and should be planned for during the search process, even before top candidates are identified. I often approach this topic early on in with a search committee as a way to determine the obstacles, if any, that could hinder the success of a new CEO.
The likelihood for success of a new CEO is considerably greater if there is an onboarding plan in place before the leadership transition begins. As I explain in the article, there are four general aspects to an onboarding plan:
- The organization: While the new leader should be well prepared to acclimate to the culture of his or her new organization, the organization must also be prepared for change. The rate and scope of change should be discussed during the search process, so both the new leader and the organization are ready to move forward immediately following the transition.
- The individual: The search committee will become very familiar with the strengths – and weaknesses – of the new leader during the search process. Addressing those qualities from the onset will enable the organization to grow from the CEO’s strengths, while working together through perceived weaknesses to ensure future success.
- The network: Coming in to a new environment, the new CEO may not have the community and political connections that the former CEO had, especially if the former had been in the position for an extended number of years. The board and/or search committee can facilitate new connections for the incoming CEO to carry on partnerships that had been established by the outgoing leader.
- The job and team: The board should set clear expectations and goals for the company for the first 90/180 days and decide what the new executive needs to know about other team members.
Onboarding begins during the search process and not just when a new CEO is hired. In order for a new leader – and the organization – to succeed during the transition period, the board must set the tone.