The Executive Lifeline: How Transition Consultants Prevent CEO Shortfalls
The CEO shortfall refers to the gap when CEOs leave their positions earlier than expected—long before they have had the opportunity to fulfil their strategic objectives, sometimes before the paint has dried on their office door.
The CEO shortfall can have significant negative impacts on a company: lost revenue, decreased morale, and a decline in the company’s reputation. A number of factors can contribute. Whether it’s a merger or acquisition, a leadership succession, or a strategic realignment, these transitions can be complex, disruptive, and risky.
As growing evidence suggests, many can be averted in their first 100 days. The question for newly appointed CEOs is how to set themselves up for success during this make-or-break period.
Enter the executive transition consultant.
Executive transition consultancies work to prevent CEO shortfalls by helping to ensure a smooth transition and successful integration of new CEOs.
Let's dive into how and why this service is swiftly becoming the must-have signing bonus for savvy executives.
Special Advisers increase the capacity of the team when and where it is most needed.
Although the board is accountable for CEO succession, and an outgoing CEO should direct the process, someone must still attend to the day-to-day details.
Yet, capacity issues mean that around two-thirds of organisations provide only basic orientation—sharing information about company performance, team member evaluations, organisational structure, strategy, and industry KPIs.
There simply isn't the capacity to offer anything better than a sink-or-swim onboarding experience.
Transition consultants don't have to offer this support on top of their regular jobs. By overseeing the process from beginning to end, they minimise the impact on everyone's workload.
An external consultant is uniquely positioned to provide much-needed objectivity during a transition.
Our surveyed executives cited organisational culture and politics as the primary reasons for failure. Almost 70% of respondents pointed to a lack of understanding of norms and practices, and a poor cultural fit was close behind. Yet, with the best will in the world, those immersed in a culture struggle to describe it as anything other than “normal”.
It takes a fresh pair of eyes to see what's weird and wonderful about your place of work.
Executive transition consultants possess a unique combination of tools, traits, and approaches that enable them to gather accurate and valuable insights about a company’s culture, identifying obstacles and highlighting opportunities.
Expertise and experience are a powerful combination.
Many of us have bookshelves overflowing with management literature. But just because we’ve read the books doesn’t mean we’ve found the solutions—the hard work still lies ahead. We must apply the knowledge and insights gained to our circumstances to build a deep understanding. However, executive transitions are rare, and for most people, there are few opportunities to put theories into practice.
Executive transition consultants are responsible for remaining up to date with management thinking, understanding the underlying research papers, and filtering for practical information.
They not only understand the complexities of these theories but have had the opportunity to apply and refine their understanding. Information plus experience equals knowledge.
Transition consultants serve as trusted political advisers as well as process managers.
Team members may have preconceived notions or biases about potential candidates or the selection process. Unsuccessful internal candidates may sabotage the integration process or at least not lend it their whole-hearted support. It can be a sticky situation made sticker by not realising what's going on.
As external parties, executive transition consultants are not bound by internal politics and biases. They can provide objective assessments of people, processes, and strategies. They have no vested interests or personal axe to grind.
Plus, they can provide an unbiased and confidential sounding board—invaluable when you don't know who to trust.
With the proper guidance, executives can accelerate their integration.
When a key executive departs, the race is on to fill the role quickly and minimise the impact on the organisation. If the role has been difficult to fill, the new executive may feel pressured to make critical decisions quickly. To hit the ground running.
Studies show that with the proper support, newly appointed executives can reach full performance in a third of the time—making critical decisions with the correct information and having the influence to execute.
By learning how and where to focus, a well-supported CEO will attend the activities that will maximise their impact first. They balance the rapid identification of quick wins while building the understanding necessary for longer-term strategic goals. Not to mention the time saved by avoiding common pitfalls.
By starting early, the new CEO starts with a bespoke playbook.
The failure rate of new chief executives is estimated to be between one-third and one-half within the first 18 months of their appointment. Poor or incomplete integration support can derail performance or lead to premature terminations or resignations—unsettling shareholders and doubling the costs associated with filling the role.
To effectively manage risk, planning should begin when the board’s choice accepts the position and last for months after they arrive. Adopting a day-one sink-or-swim approach can be disastrous. Effective CEO integration is a long process of formal and informal, planned and impromptu interactions.
An executive transition consultant can start before the new executive does, get a head start in planning for what can be predicted and create strategies for reacting to what cannot.
For those whose leadership is the same game but with different rules, transition consultants help level the playing field.
C-suite demographics are changing, but bias remains a problem. Most of us know the importance of diverse hiring at every level and supporting women’s advancement throughout the promotion pipeline. Still, as the glass cliff replaces the glass ceiling, new research is beginning to uncover where traditional leadership advice can be counterproductive for those in the organisational minority.
Because organisational minorities have different experiences in the boardroom and beyond, working with an executive transition consultant specialising in identity politics can help level the playing field.