Ensuring a fast start: through smart selection processes and effective coaching, HR can help new executives hit the ground running - includes related article on the US Postal Service's 'Leadership in Transition Program' - human resource personnel - Cover Story

HR Magazine, July, 1999 by Robert J. Grossman

Earlier this year, the board of directors of Telxon, a manufacturer of wireless communications equipment based in Akron, Ohio, found itself in the midst of a management nightmare. Over a frustrating seven-year period, three CEOs had come and gone. Now the fourth was history. And before pulling the cord on his golden parachute, CEO Frank Brick piloted Telxon into an embarrassing nose-dive, earning the dubious distinction of being forced to restate and correct the reported earnings for the publicly traded company for 14 consecutive quarters.

As the Telxon board members began the search for a new CEO, they wondered why four seemingly well-qualified CEOs had failed to deliver. And they decided to make a change.

This time around, they included HR in the process. They transformed Meg Pais, vice president of human resources and administration, from a passive observer into a key player in selecting and integrating the new hire.

For example, when the board settled on finalist John Paxton, it asked him to meet with Pais to get an insider's assessment of the company. Paxton jumped at the chance, eager to assess whether the company was salvageable before committing himself.

Pais spent two full days briefing him on all aspects of the business. "I didn't hold back," she recalls. "I told him the good, bad and ugly." When they were done, Paxton took the job - and elevated HR to direct-report status. Pais emerged as an influential business partner and coach to the CEO, guaranteeing that Paxton received essential insights his predecessors chose to ignore.

While Pais was becoming more involved at Telxon, Laurel Marden was being left in the dark. Marden, the HR manager at Dynatec International in Salt Lake City, was caught by surprise when President F. Randy Jack announced that he was leaving after 17 years with the manufacturer and distributor of telephone accessories and houseware products. "I have no clue about the change in top management or the plans to recruit and integrate his replacement," says Marden. "I'm unsure what will happen next. But whatever it is, I'm sure to be out of the loop."

A Sagging Success Rate

Unfortunately, too many HR pros are - like Marden - out of the loop, working for bosses or boards who don't appreciate the critical difference that HR can make. "HR is involved in the selection of top-level executives only 36 percent of the time," says Valerie Sessa, research scientist at the Center for Creative Leadership (CCL) in Greensboro, N.C.

Perhaps it's no surprise, then, that 40 percent of newly appointed leaders fail in the first 18 months, according to a recent study by Jacksonville, Fla.-based Manchester, an executive development and training firm. The study defined failure in a number of ways. "It could mean they were terminated, or that they resigned by choice. Or it could mean they are viewed as being ineffective," says Marellen Aherne, executive vice president, in Washington, D.C. "Any way you look at it, it's a serious problem."

And it may be worse than it appears. "Overall failure rates may be even higher because companies tend to endure poor performance," says Murray M. Dalziel, global managing director for organizational effectiveness and management development services at the Hay Group in Philadelphia. "You just put up with it because of the expense of trying to get out of some of these deals," he says.

Often, executive failures can be traced back to a flawed selection process; in other cases, new hires are not given adequate coaching and feedback to help them adapt and succeed.

Both problems fall squarely within the purview of HR, which is why HR needs to be involved in executive selection and orientation. HR professionals can have a tremendous impact on the success of new executives - if they are given the chance and take the proper steps.

Defining Organizational Needs

When selecting new executives, a key first step is to analyze the needs of the organization. Often, organizations don't think about the competencies they really need, thus ignoring the groundwork for the best decision.

Dalziel shares the following story: "One multinational food industry client of ours that was hiring presidents based on industry norms lost 12 of 24 hires within a three-year period. When it switched tactics and hired to fit the unique competencies of its organization, only two of the next 24 didn't work out."

Bill Shupert, senior vice president of HR at The Learning Company in Framingham, Mass., says good selection starts with an understanding that an ideal manager should offer a blend of managerial qualities.

"There are three types of managers," he says. "The startup manager has specific skills and gets his jollies out of building the business; the turnaround manager likes to turn around utter messes; and the maintenance manager likes to be told, 'The business is running smoothly, don't screw it up.'

"The successful general manager or VP," says Shupert, "has got to have skills in all three areas. When I hire a CFO or CEO, I look for all three types and talk about them in the interview."