Comfortable Fit: Assimilating New Leaders

By Diane Downey and Tom March

Companies that understand how new leaders experience the process of joining a team can help them adapt more successfully to their new environment. The assimilation process is especially important for executives who are brought in from other countries or as a result of mergers.

Overview

Adroitly assimilating new leaders promises to be the next decade's most compelling tool for facilitating senior executive success. At Downey Associates International, Inc., we have worked with numerous senior executives at Fortune 500 companies who have faced the challenge of adapting their skills and expertise in a new and sometimes daunting organizational environment.

One of these executives was Paul, who had been a rising star in his Fortune 100 financial services company. After 15 years he was a senior operations executive. He felt ready for a new challenge, however, and when the opportunity came to take on a position with global responsibility at a competitor he accepted it. He was excited to start the new position, and the recruiting and “courtship” had made him feel that the new company was just as excited about him. But his predecessor had left him little data, and he had to spend a lot of time gathering basic information. His team, scattered across the world, seemed resistant to tell him what was going on much less change anything. He had ideas for new projects, but it was unclear how to get them approved, who to involve, or how decisions got made in this new company. The people who had been so accessible during the interviews were now just names on his email list.

Unfortunately, Paul's experience is not unique. Given the high rates of failure among newly hired, and newly promoted, senior executives, it is more important than ever to understand the factors that contribute to the successful assimilation of new leaders. This article presents the lessons we have learned from our experience helping clients select, assimilate, and assess their senior leadership teams. We offer a new model that goes beyond previous work on new leader assimilation to incorporate several fields of inquiry that inform both the cognitive and emotional dimensions of new leader experiences – including resilience, learning styles, change management, and influence. In order to assimilate new leaders, as well as build a foundation for their continued success, organizations must understand how new leaders experience the process of joining a new team. Our work with senior executives and the teams they lead has taught us that successful assimilation impacts the bottom line and increases return on investment by:

• Improving an organization's ability to recruit the right people

• Increasing leader retention by ensuring a new leader's organizational commitment

• Decreasing the time it takes for new leaders to become productive and effective

• Minimizing disruption to business cycles and team processes

This article, the first in a series of three, focuses on the new leader's experiences when entering a new organization — the responses they have to the change process itself and the organizational barriers they may encounter. Future articles will explore the impact of the assimilation process on organizational and team effectiveness, as well as provide insight into the practical and actionable steps that organizations and teams can take in order to facilitate success.

The Business Case for Assimilation

The rate of turnover among newly-hired or newly-promoted senior executives is startling. The Corporate Leadership Council reports that 30-50% of newly hired executives fail or are “derailed” within three years.[i] A headhunter tracking the careers of 150 senior executives found that within two years, 80% had changed employers.[ii] Furthermore, 47% of executives (comprised of 38% of internal promotions and 64% of external hires) who were appointed president of public U.S. companies without becoming CEO left after four years.[iii] These high rates of failure for those hired externally and internally alike underscores the extent to which assimilation cannot succeed based on organizational knowledge alone. The organizational knowledge of internal lateral transfers and promoted leaders may help them understand some of the dimensions of their new role, but they encounter the same difficulties assimilating as external hires and must be equipped to address them. When leader turnover is high, working alliances are not in place long enough to establish any changes that are introduced. When a new leader is brought in before the change is completed, the process must start again from the beginning, reducing organizational efficiency and increasing cost.[iv]

            These statistics take on added importance when considered alongside projections regarding the job market for senior executives over the next eight years. At an average company, the cost of replacing a newly-recruited employee has been estimated to be from 1.5[v] to as much as 40 times base salary when hiring costs, salary and such things as opportunity cost are taken into account.[vi] Between 1998 and 2008, the total number of openings "due to growth and net replacements" for general managers and senior executives is expected to increase by 16.4 percent.[vii] With senior executive positions increasing, the impact on the bottom line for organizations who cannot successfully assimilate new leaders increases dramatically.

The Assimilation Process

The assimilation process follows an input/output model, as represented in the figure below. Assimilation begins with recruitment and continues as a leader evidences an increased ability to perform in the new role. Successful assimilation results from the organization's and individual’s predisposition for assimilation— their "inputs" in the model below— and the transformation process that happens when the organization and individual meet. The point at which a new leader accepts an organization’s offer begins the “Transformation Process," during which the new leader moves from a position of uncertainty toward full competence in the new role. We identify assimilation as successful if its "output" is a leader who understands the capabilities of the new team and is able to identify with organization and its goals, and is ready to begin developing longer-term strategic initiatives.

   The readiness for assimilation of both individuals and organizations— the "inputs" they provide to the transformation process— influences the length of time and probability of success of a new leader’s assimilation. Organizational inputs into the process include the history, culture, work requirements, and expectations that impact how easily a new leader can assimilate.  These contribute to how a new leader experiences the organization as well as to the kinds of support an organization is ready and able to provide. The latter will be the subject of the second article in this series. Similarly, new leaders begin their new positions drawing on prior experiences, personal characteristics (i.e. adaptive qualities), and expectations of their new roles and organizations. It is important to recognize that some new leaders may be more predisposed than others both to successful entry and retention. This is similar to the notion of "commitment propensity"[viii] described by Mowday, et al., which refers to an individual's predisposition toward developing commitment to a particular organization.

When leaders join a new organization (a team, business unit, or company), they enter a new organizational context. The term “organizational context,” which we borrow from Ashforth, et al. (1998), acknowledges that new leaders from within, as well as those hired from outside, experience assimilation in similar ways. For senior leaders it can take as long as 2.5 years to completely finish the process of assimilating to that new context. (Gabarro 1987) Our research and work with senior executives at a number of Fortune 500 companies has revealed no uniform timeframes for each stage of the transformation process. To accurately predict the time required to assimilate into any organizational context requires consideration of circumstances such as:

• The severity of the business problems facing the new leader's unit and the organization as a whole

• The organization’s readiness and responsiveness to the needs of assimilating leaders

• The degree to which a team is ready for the arrival of a new leader

• The competence and motivation of a new leader's team

The Transformation Process

Our process model shares some similarities with Gabarro's five stages of "taking charge." . (Gabarro 1987) Similarly, in Right From the Start: Taking Charge in a New Leadership Role (1999), Ciampa and Watkins focus on what they call the “Transition” stage, which they define as a combination of Gabarro’s initial entry period and the time between recruitment and entry. They assert that during this time new leaders are most vulnerable due their lack of knowledge and relationships. In addition, both the new leader and those s/he works with are forming early impressions of each other that set the tone for the duration of the relationship. Our model focuses primarily on how new leaders experience their new organizations and on the personal characteristics that allow them to overcome potential organizational barriers.

Our research and experience working with new leaders suggests that the transformation occurs over four distinct stages:

We will discuss what new leaders experience at each stage of this process, in terms of the organization's inputs (potential barriers) and the personal characteristics that prevent these experiences from becoming barriers.

Stage One: Anticipating and Planning

Before beginning the new assignment, new leaders speculate about how they can demonstrate impact, the changes they might implement, and the relationships they will have with their colleagues. (Merton 1968) The recruiting process often resembles a courtship, in which each side presents its best face to the other. The effect of this is that a new leader interprets the interest of the organization in a way that reinforces his or her sense of self-worth and suitability for the position. Any negative views of the job a leader is leaving accentuate the attractiveness of the role in the new organization. This can result in the development of unrealistic expectations about the job and what will be required in the new role. This is especially damaging considering statistics that cite lack of clarity about role expectations as a factor for 58% of new leaders who fail.[ix]

Those involved in the recruiting process tend to emphasize positive objectives while downplaying problems. This can lead to unrealistic or unclear job expectations. Because organizations tend not to assess for organizational fit, those hiring can develop unrealistic expectations about both a new hire’s abilities and how they will fit into and impact the new organization. To accelerate change, organizations hire people who represent the values of a future state, with little attention to the support necessary to move an organization from the current state, where problems may exist, to that desired future. One of our clients, a senior executive at an international accounting firm, was moving to a job at another firm and wanted to gain clarity about his role and what his relationships with other business leaders were expected to be. We helped him prepare for his entry by developing a framework for what factors he should consider when performing his initial assessment of his new organization. We also coached him on how to approach establishing relationships with others on his leadership team in the weeks before his formal entry.

Leaders who successfully navigate this stage share the following qualities:

• Inclination toward comprehensive research—seeking information about the new organization's environment, strategies, and goals, via the organization’s alumni, others who know the organization, and other available means.

• Honest self-assessment— assessing how one’s skills and experience are sufficient to meet the challenge and identifying skill gaps.

• A focus on "realities"— realizing that unanticipated experiences are inevitable and understanding that no situation is perfect.

Stage Two: Entering

Upon entry, new leaders face an ambiguous situation and lack familiar reference points. They are caught between the embedded norms of their previous organization and those of the organization they are entering. One of the most commonly observed phenomena is the perceived gap between what new leaders speculate their role will be and the reality they discover upon entry. Inevitably, the speculation of the planning stage does not match the circumstances encountered the first day on the job. The discovery that assumptions based on past experience do not apply to the new organization can be disorienting. Such assumptions can center around:

• The nature of the problems to be solved

• Operating procedures

• Performance standards

• Cultural norms

• Team capabilities

As the reality of the new organizational context becomes clear, leaders may experience doubts about whether their skills match the requirements of the new role. Because they perceive that they have been given insufficient discretion and authority, they may feel a lack of power to accomplish what is expected of them. In fact, turnover of executives in acquired companies is directly related to perceptions of loss of autonomy– in addition to perceptions of cultural difference. Taken together, these factors account for 50% of variance in first year turnover.[x] This contributes to the difficulty new leaders have in reconciling their identity and values with their new organizations, as the cultural norms and values of the previous organization no longer provide a framework for action or self-definition. One response to this frustration is to take a "go it alone" stance, which inhibits the development of the working relationships necessary to effect change and learn about the organization.

Moreover, the lack of an established information network prevents the early testing of these assumptions that will avoid future misunderstanding. Without the information they need, new leaders doubt their ability to assess their new environments and implement necessary changes. Joining a culture based on insularity and knowledge-hoarding increases the problem by delaying a new leader’s acquisition of knowledge and awareness of the channels through which it circulates throughout the organization. A lack of support networks, comprised of colleagues who can answer questions and provide guidance, can heighten a new leader’s frustration. An example of how we have helped a new leader at the entry stage concerns a senior executive joining a global financial services company. His new team was spread throughout several countries, and many team members had never been in the same room together. We conducted an assessment of the leader's team to find out what their expectations of the new leader were. Based on these findings, we facilitated a meeting that brought the entire team together to express their concerns, raise the issues they were facing, and establish guidelines for working together.

Leaders who successfully navigate this stage share the following qualities:

• Information synthesis— seeking and integrating both positive and negative information from various sources and testing assumptions against it.

• Adaptive inquiry— refining the questions one asks when gathering information as more is learned.

• Cognitive complexity—recognizing the validity of other experiences and accommodating dissenting information in order to expand or alter one’s paradigms, behaviors and expectations.

• Interpersonal orientation— proactively seeking and establishing informational and personal networks.

• Resilience— responding to change as an opportunity rather than as defeat; exhibiting flexibility in thinking and action.

Stage Three: Building

The Building stage encompasses a new leader’s initial encounter and extends beyond it. This is the period during which leaders consolidate the work of teambuilding, knowledge gathering and networking. The Building stage is rarely swift, though the combination of the right individual and an organization aware of the needs of assimilating leaders can accelerate the process considerably. A study of 46 executives who had recently changed jobs reported that one-third needed a year to “adjust,” while 75% cited culture (i.e. the new organizational context) as the biggest barrier to their adjustment.[xi] In leadership changes in which the departing leader retains influence in the organization, a lack of understanding between the new leader and his/her superior around roles and priorities can result in “successor syndrome” where issues are not dealt with openly and in which the lingering influence of the former leader prevents the new leader from solidifying his or her own influence.[xii]

More often, new leaders encounter difficulty managing their relationships with their new teams. It takes time for new leaders to get to know their new teams, both personally and in terms of how they contribute to goals. Initially, they lack information about what management style will encourage the best response from their team. New leaders can be stymied by their inability to understand how a team's history may negatively impact its response to proposed changes. 82% of executives identified “failed to build partnership with peers and subordinates” as a major factor in new leader failures.[xiii]

From an organizational standpoint, loyalty to a departed leader may complicate the relationship with the new team. Unlike reporting relationships, collegial bonds cannot be imposed and take time to develop. But new leaders often make the mistake of managing relationships before managing tasks. They adopt a strategy focusing too heavily on decreasing team members’ resistance instead of confronting them with the realities of the tasks at hand. This sets unrealistic expectations and ultimately undermines trust. Furthermore, leaders who move too fast to build personal relationships lack focus on the business decisions they need to make. In such instances, team members lack understanding of priorities and lose trust in the leader’s ability.

Leaders can face embedded organizational resistance, both in terms of culture and in terms of entrenched ideas or practices within the team. In companies with a large number of long-term employees and a history of promoting from within, new leaders brought in from the outside often encounter the “antibody problem.”[xiv] This reaction often has its source in internal veterans who had aspired to the position filled by the new leader. A leader may also have to manage a superior who feels threatened by proposed changes. In every organization, there are employees whose resistance to change is intractable and who will not accommodate change even if it is in their best interests. The quality of the team a new leader inherits is a significant factor in the speed of assimilation. Taking time to either re-train or replace employees prevents the team from moving forward.

Our work with a senior executive in a leading financial services firm exemplifies the extent to which building team relationships and developing strategic goals can go hand in hand. This particular leader inherited a team whose members were unclear about the strategic direction of their division. In addition to helping create a development plan for the new leader herself, we had to address the team's need for a clearly defined purpose. After interviewing the new leader's direct reports, we conducted a two-day meeting that combined teambuilding, role clarification, and the development of strategic goals and initiatives. This combination allowed us to leverage positive energy about the new relationships that were developing into outcome-oriented activities that gave the team a common ground for doing business when they returned to the office.

Leaders who successfully navigate this stage share the following qualities:

• Simultaneous task and relationship-building—addressing team building needs without losing focus on business needs.

• Adaptable learning—drawing meaning from one's past experiences and utilizing these lessons creatively to master new challenges.

• Interpersonal aptitude—assessing the interpersonal dynamics and styles of both the team and one’s superiors and leveraging how they impact each other and others throughout the organization.

• Credibility—competently and decisively establishing a relationship with the new team, peers, and superiors around mutual expectations, trust, and influence.

• Historical understanding—addressing any sources of team resistance by developing an understanding of past experiences, both positive and negative.[xv]

• Clarity of communication—communicating clearly and honestly with the team about anticipated change, competency gaps, and the work required to reach team goals.

• Political savvy— being sensitive to political realities and relationships.

• Decisiveness—being willing to make tough decisions.

• Openness to feedback—actively seeking feedback to determine whether one’s performance meets expectations.

Conclusion: Deepening and Strengthening

By the time a new leader has completed the Building stage, s/he is ready to function effectively in their new role. We identify Deepening and Strengthening as the fourth stage of the assimilation process to suggest that assimilation is an ongoing activity in an executive's career. Throughout their tenure in their roles, leaders must negotiate change and leverage the same personal characteristics that have enabled them to successfully assimilate. For example, a lack of the political savvy required to navigate new relationships, both up and down, is a driving factor for 50% of new leaders who fail.[xvi] The ability to maintain and strengthen these ties is crucial to a leader's ongoing success.

Awareness of and attention to these experiences and potential barriers by the entering leader as well as the organization can accelerate the successful assimilation of new leaders. For example, an assessment as part of the selection process can alert an organization if a candidate may have trouble in building new relationship networks. A development plan for new hire creates a roadmap and legitimizes asking for assistance. Facilitated sessions with the leader’s new team build common understanding of expectations and work and managerial styles. The next article in this series will offer a glimpse at the assimilation processes of some best-in-class organizations we have worked with and provide some practical and actionable tools for accelerating assimilation. At a time when speed – to market, of innovation, of execution – is critical in every industry, no company can afford to let a new leader spend months struggling. Given the high cost of recruitment and replacement, an investment in assimilation provides a sure return.

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