Your New Executive Transitions are (Probably) Going to Fail

About half of new executive transitions are considered failures within two years.

But why? I’ve coached hundreds of struggling executives over the years, and almost every time, their failure is a surprise.

The story usually goes something like this: They’ve been high performers their entire careers. As they moved up, they always received high praise. For the most part, people liked working on their teams, and they got along well with their peers.

And then they get their first executive role. Usually, it's a director, vice president, general manager, or similar type or role. And it's like a switch flips. The usual cycle of “new challenge–work hard–succeed–move on” is suddenly short-circuited. The high performer stalls.

The other consistent part of the story? They almost always keep their struggles private. Now that they’re playing in the big leagues, they need others to know they deserve to be here. So, they typically say very little about the issues they’re facing. There’s no crying in baseball, or executive leadership.

But sooner or later, the private struggle fails, and things start to unravel.

The impact of difficult executive transitions

When we talked to chief human resources officers about what happens when new executives come in, we heard things like, “there’s a step back in performance.” Or “teams fall behind” and “turnover on the teams at the level below them is bad.”

Is it too obvious to say that the cost of failed executive transitions to the business is huge? First, there are the costs of replacing the executive if they leave or are fired, which can be 2.5 to up to 10 times their salary. But even if they stay, there are many indirect costs. For example, the performance of the business unit will almost certainly drop off. There’s the opportunity cost of actions not taken. And, of course, there’s the bigger cost of turnover on their teams.

There’s also a profound personal impact. In our research over the years, about 40 percent of people said becoming an executive wasn’t a positive experience. Furthermore, they said the transition was more stressful than other life challenges such as divorce, raising teenagers, and even death in the family.

According to a study by the National Institutes of Health, the stress causes major health concerns. It seems executive don’t sleep very well. They have low energy, and high anxiety. And they ping-pong from one unhealthy meal to the next. The toll of this vicious cycle adds up, often resulting in more serious physical and mental health concerns.

With such high risk to the company and to individuals, one might wonder what companies are doing to make sure these executive transitions go smoothly.

How most companies handle the risk

At a recent HR conference, we asked a room of about 40 HR leaders who among them felt they were doing enough to support their executives. Not one hand went up.

And it’s not just that a lot of efforts are falling short. Most organizations are doing nothing at all.

It’s not because CHROs and senior management don’t care. We typically hear three main reasons why they don’t do anything for executives:

1. Executives should be able to figure it out. C-level and other senior executives often didn’t get any support during their own transitions. Since they were able to overcome the challenges, they figure truly talented executives will do the same. But this mentality ignores the steep cost of executive failure.
2. We can’t afford coaches for every executive. Most people are familiar with executive coaching as one of the few options for executive development. Because of the time and investment, they reserve it only for their senior-most leaders. But not all coaching engagements have to be long-term or costly. Short, targeted engagements can help executives get on track early, and quickly.
3. You can’t train for this. Every executive is in a unique leadership situation, and others often don’t understand the nuances. For the same reason, group training can be too generic to be useful. But with the right adjustments to make learning specific to the situation, group development can be a powerful way to align executives and build the relationships between them.

There’s no question these can be major barriers. But businesses simply can’t afford to let them stand in the way.

How to get started

What can you do today to help your new executive transitions succeed?

First and foremost, understand what’s going on behind the scenes with your executives. Based on our research and experience, there are four forces of executive pressure that often cause people to fail. These pressures are related to how they handle the business, their network, their team, and themselves. But most executives don’t see them coming.

So, it’s essential to help new executives see what’s coming around the bend. This may be the single most difficult challenge for them. But there are practical ways to provide support.

One powerful approach is to connect your executives with experienced coaches who have undergone specialized training to help uncover the potential pitfalls in their new roles. We call this pitfall coaching.

It’s not traditional executive coaching. It’s faster, more candid, and aimed at equipping new executives with the critical insight they need to get up to speed in a hurry. Traditional executive coaching is better for more advanced executive roles. Pitfall coaching helps new executives anticipate the challenges they haven’t yet encountered.

Simulated role immersions can also be useful by helping leaders see how they react to common challenges in a day in the life of an executive. Gaining this perspective on one’s own approaches to leadership is immensely revealing to new executives. Well-designed role immersions also provide objective data on where leaders show strength and where they have challenges. This data can guide development moving forward, and help the organization make more effective promotion decisions.

It may also be useful to consider shared development experiences, which can help your executives learn together. This can add both efficiency and energy to the learning process. Group experiences have the added bonus of helping to develop strong bonds. Participants move forward with a better network of alliances across the organization.

These approaches are not mutually exclusive. Often, a mix of tactics works best, depending on your company’s specific business context and unique learning needs.

It’s not too late

While it’s most important to help soon-to-be executives approaching the transition, you may also want to create similar support for those who have just done so: your new VPs, directors, general managers, and other emerging executives. After all, the success of your business is in the hands of these leaders, and many of them have little notion of the challenges they will soon face.

And even more importantly? These leaders are your future C-suite. Don’t deny them support until they’re running the company. Step in now while your new executives are in learning mode. The insights and skills they gain today will pay handsomely when they’re responsible for the entire enterprise.

Learn more about the four forces of executive pressure and development approaches for your new or soon-to-be executives in our eBook, The 4 Forces of Executive Pressure: Why Your New Executives Are Drowning.

Matt Paese, Ph.D., is Senior Vice President, Succession Management & C-Suite Services at DDI. He leads DDI’s Executive Services group, where he and his team help CEOs, boards, senior teams, and executives enhance leadership to grow business, cultural, and personal success.