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CEO Onboarding Needs a Real Plan

With CEO turnover nearing a 20-year high, it's surprising how few firms have a formal or thoughtful way of onboarding someone into the most important seat in the house; heads of HR have a big role to play

Most management teams now recognize the cost of failing to invest in CEO succession planning – analysis recently put it at about $112 billion of missed market revenue for large companies – but far fewer put time and money into onboarding CEOs into their new role.

Many companies do not onboard their CEOs systematically and do not maintain programs or even a set of formal processes to help new recruits to make a success of the company’s most important role. But with CEO turnover at 16.6% in 2015 — a record high since 2000, when it was 12.9%, according to Strategy& data — companies can hardly afford such common and costly failures.

The typical guidance that new CEOs are given tends to lack depth and fails to clearly assign ownership of important onboarding tasks, leaving CEOs to their own highly capable, but overwhelmed, devices. While traditional advice tells CEOs to familiarize themselves with the corporate culture, diverse colleagues and other company “stakeholders,” and organizational political dynamics, the responsibility for planning and implementing these activities is undefined.

The Head of HR’s Role in CEO Onboarding

In particular, the head of HR – the CEO’s top “people” executive – is often conspicuously overlooked for the role of onboarding a CEO. Heads of HR intuitively know to get involved at several points during a CEO’s transition, such as facilitating introductions and briefing the CEO on the corporate culture. But, even in today’s world, where talent is increasingly important to business strategy, surprisingly few resources explicitly guide HR executives on arguably the most important employee transition their organization will undertake.

Heads of HR should ask themselves – and answer – three questions once they hear a CEO is on his or her way.

  1. What information should I bring to my first meeting with the new CEO?: Heads of HR must know how to use this first substantial interaction to build credibility by demonstrating their reliability as a business leader, that understands corporate strategy and how it is likely to change and evolve over time, and who knows how to recruit, retain, and develop employees to implement that strategy.

  2. How should I facilitate an amicable and productive transfer of knowledge between the outgoing and incoming CEO?: Heads of HR have to figure out how to lay the groundwork to negotiate and broker this critical transfer of institutional memory.

  3. How do I partner with the new CEO to provide upward feedback — solicited or unsolicited — on topics that pose a threat to the CEO’s vision and leadership?: A head of HR is well positioned to identify potential problems, particularly those stemming from the executive leadership team. Heads of HR who establish a credible partnership with the CEO, and successfully navigate these delicate conversations, can offer invaluable feedback on a new CEO’s strategy.

What Heads of HR Say About CEO Onboarding

From speaking with a wide range of heads of HR in CEB’s networks, they offer three pieces of advice on CEO onboarding.

  1. Don’t be afraid to impose some structure: Whether for an internal or external hire, a developed onboarding plan is essential, but it must also recognize the inherent variability in the CEO’s daily activities.

  2. Proclaim your vision: Clearly communicate your vision of how HR should operate in the organization. Advocate for your goals from the start to prepare HR as a strategic partner, ensuring the CEO knows where you stand.

  3. Make sure you really understand the CEO’s motivations: Take the time to understand the new CEO’s goals. Transparent communication will allow alignment in philosophy between yourself and the new CEO and ensure your onboarding program reflects his or her priorities.

 

More On…

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