I want to share with you a well-grounded statistic that may startle you: Forty...repeat FORTY, percent of newly hired or promoted C-suite leaders fail within their first 18 months in the position. If the wisdom of conducting a careful selection process wasn't intuitive before, this statistic brings it vividly home.
Let's say your healthcare non-profit has a longstanding and solid CEO who decides it is time to pursue another challenge. After the understandable fear and trepidation, how do you make plans that will get you through the crucial next few months that conclude with an enthusiastically endorsed replacement?
A solid search and onboarding processes must include these elements to help ensure you find the ideal fit.
In order:
1) Update the specs! The position description and salary range of an executive with a 25-year tenure has gathered dust -- or more likely grown moss. Review these with the current market in mind and independent of the particular strengths of the outgoing CEO. Looking at the mission and core business strategies, the board should ask: What is the ideal role of CEO (or CIO, CFO, etc.) in our organization? What talents and industry knowledge will this new leader need to have? What will we need to pay to recruit and retain him or her and how should the elements of that package be weighted (salary and incentives)?
2) Build excitement. Recognize that while the process often begins with trepidation, the board needs to build enthusiasm around the opportunities new blood will bring. This is the time to review and revise the strategic plan and organizational priorities. Discuss this plan with internal and external stakeholders. This is not the time to worry that you are over communicating!
3) Charter a search committee. Either the board executive committee or a committee of people strategically selected from the board at large can be effective. Enlist the company's chief HR leader to coordinate the details of the process, be a conduit between the committee and candidates and perhaps be a facilitator in candidate evaluation talks.
4) Create a behavioral assessment profile. The board chair and executive committee should work with the search committee to identify the successful candidates' most critical strengths. Be aware of the tendency to try to clone the beloved departing leader!
5) Stick with the plan. If possible, don't shortcut the process. Falling in love with an exciting candidate and deciding to wrap the search up early is a tempting, but rarely best, decision.
6) Support the new executive. It is natural after a long search for board members to return to other A-list priorities that have piled up during the search process. Too often, they leave the new executive alone to fumble through the first weeks and months unsupported. To make onboarding effective, the board chair and board at large must spend considerable time with a new CEO (and the CEO with new C-suite exec) on the business' history, mission and strategic objectives.
Tip: Some companies also hire an executive coach for a few months to help with assimilation.
Throughout the search process, keep the high stakes firmly in mind. Hiring a poor fit at the leadership level not only translates into substantial financial loss and reputational fallout but damages morale as well. Finally, when it comes to compensation, pinching pennies at this level is counterproductive. Healthcare executives are the third highest paid of executives within the eight core industries. The best ones know their worth!
http://insights.ccl.org/wp-content/uploads/2015/04/ExecutiveIntegration.pdf