than a sprint. They have to maintain a balanced life, if they want to op- erate at maximum effectiveness and efficiency. A third problem I have seen quite frequently is a mismatch between the new manager’s style and that of the working team, particularly in the area of control and delegation. This is a combination of both sides’ expec- tation of what’s right and normal. If the manager is (or is perceived to be) overly controlling, the team gets frustrated, and rebels by either resisting or withdrawing. In either case, the result is underperformance. A fourth typical trap arises when the new manager fails to invest in developing strong relations with key people. This requires a 360° per- spective, extending to bosses, peers, and subordinates. All of the relevant research shows that most managers actually spend most of their time re- lating to others; the question is, how well do they do it? 7 Gabarro argues that the ability to develop proper relationships with key people is the best predictor of success or failure: Perhaps the most salient difference between the successful and the failed transitions was the quality of a new manager’s working rela- tionships at the end of his first year. Three of four managers in the failed successions had poor working relationships with two or more of their key subordinates by the end of twelve months. 8 Likewise, research from the Center for Creative Leadership indi- cates that top-level executives define executive “success” according to two measures: 1. Bottom-line organizational results achieved during those indi- viduals’ tenure 2. The relationships they maintained with others, and in particu- lar, their subordinates 9 Another frequent integration trap grows out of the legacy actions of the predecessor. This is particularly serious in the case of outgoing 264 GREAT PEOPLE DECISIONS ccc_people_255-278_ch09.qxd 4/3/07 1:15 PM Page 264 CEOs, who may succumb to various types of temptation over the last few years of their tenure (especially if they have stayed on a little too long). These run the gamut from procrastinating on pressing problems to decid- ing to end their career with a “big bang” (e.g., a major acquisition or merger), which may not be in the organization’s best interest over the long run. 10 Finally, a trap that very often manifests itself in the integration phase is a lack of organizational support. Because this sixth trap is such a serious problem, and because it arises so frequently, I’ll consider it at length in the next section. Managing the Integration Process In order to increase the chances of a new manager’s success, accelerate the integration process, and maximize his or her contribution, companies should approach the integration proactively. They should prepare for the integration and follow it up. Let’s look at each of these steps in turn. First, companies should be proactive. In the case of the dairy company referred to in previous chapters, a very visible search for a new CEO of this company (actually the largest in its home country) led to the hiring of a foreigner who was literally on the other side of the world. Within hours of the final contract being signed and the successful candidate resigning from his former CEO role, the board proactively staged a series of private and public announcements of the hiring. The communications began at 6:00 P.M. with a call to the country’s prime minister. They continued the next morning with a videoconference hookup in the company’s boardroom, so that the new CEO could meet his team, at least in a virtual sense, and have an initial session with the local media. Then came a series of individ- ual phone calls from the new CEO to each of his direct reports. In addition to skillful communication, being proactive means max- imizing preparation before taking charge. Consider the case of a com- pany that hired a foreigner to be its CEO. The newcomer experienced a How to Integrate the Best People 265 ccc_people_255-278_ch09.qxd 4/3/07 1:15 PM Page 265 huge cultural shock in his new setting, and lasted only six weeks. The chairman of the board, understandably upset, and concluding that the search firm they had used up to that point didn’t adequately understand the company’s culture, dumped that search firm and retained a new one. But the new search firm, sizing up the situation, concluded that it wasn’t simply a matter of paying more attention to culture: The company and its internal politics were far more complex than first met the eye. The consultants informed the chairman that he personally needed to make an extra effort to prepare the next CEO. When the new person was finally hired, both executives attended a “boot camp,” spending two days on a university campus with the search firm and a carefully planned- out series of professors and advisors. The process helped the two individ- uals confirm their priorities and mandates, discuss cultural and people issues, and get to know each other on a more personal basis. The second thing companies should do is to properly prepare the in- tegration. A couple of years ago, a good friend and client—the president and CEO of a very successful durable goods company, which I’ll call “DuraGoods”—paid me a visit. He represented the fourth generation of his family to run the business. He told me that he was about to turn 50, and he had made the decision to retire from an executive role. For the first time in a century, he confided, there were no family members who were qualified to take over DuraGoods, nor were there other strong in- ternal candidates. As a result, he had decided to conduct an external search, in which he wanted our help. It was clear to me and my colleagues that for this family business to bring in an external CEO for the first time in its long history would be a major challenge. But we worked with the retiring CEO (and another board member who was on the search committee) to plan and imple- ment a series of integration actions. These included: • Communicating to all key internal stakeholders, in a consistent and regular way, the reasons for the search, and ultimately for their choice 266 GREAT PEOPLE DECISIONS ccc_people_255-278_ch09.qxd 4/3/07 1:15 PM Page 266 • Coming up with a very explicit mandate for the new CEO • Spending time with the new CEO to review the company’s his- tory and culture in an intensive way • Presenting the new CEO to relevant leaders and managers • Reviewing with him successful examples of integration, high- lighting what had actually worked in other relevant contexts • Setting up a plan to provide feedback “early and often” during the integration process • Agreeing on a realistic timetable for objectives, including learn- ing, building relationships, and scoring some “early wins” The right search, together with the right integration support, al- lowed for an extremely successful integration, which was followed by a record performance, despite the newness of the manager. Particularly for very senior positions, the minimum preparation for an integration should include: • An explicit understanding of the governance, structure, and key processes of the organization • Key agreements about immediate priorities and action steps • A shared understanding of long-term aspirations • A clear plan to spend enough time together with the key stake- holders, to help build trust-based relationships In the case of internal promotions to CEO positions, the board should insist on a longer and properly structured transition process, in which the heir apparent is given the chance to learn, prepare, and de- velop the right type of organizational network and support. At the same time, the board should continually monitor the outgoing CEO’s engage- ment with the business as he approaches retirement to ensure that there is still a hand on the tiller, and that the retiring executive is not tempted to make a counterproductive “last gasp” grand gesture. How to Integrate the Best People 267 ccc_people_255-278_ch09.qxd 4/3/07 1:15 PM Page 267 The third thing that companies can do to support the integration is to follow it up closely. Every few months, the organization should formally analyze progress against expectations, by trying to answer at least four ba- sic questions: 1. Has the organization been providing the proper support to the hired candidate? Potential issues to consider include the clarity of mandate, a proper briefing on the company’s history and cul- ture, the right level of early feedback, as well as the availability of some clear internal sponsor. 2. Is the new manager developing proper relationships in the organiza- tion? Networking, working closely with peers, understanding the corporate culture, and securing the trust of her own team, boss, and peers all should be counted as signs of appropriate progress. 3. Is the business model being properly worked by the new man- ager? This means, for example, understanding the fundamental processes, products, services, and business requirements, and putting assets to work in appropriate (initial) ways. 4. Is there evidence of progress? There’s no point in asking this ques- tion too soon. On the other hand, it’s fair to look for clear state- ments of priorities and milestones, and (at some point) evidence for progress toward those milestones. There’s one more thing that companies have to be prepared to do during the integration phase, if and when it becomes clear that the inte- gration simply isn’t working: Pull the plug. This is never easy. Significant amounts of time and money have been spent in finding, recruiting, and integrating the newcomer. But sometimes it just doesn’t work, and the parties involved have to have the courage to face that fact, and act, un- comfortable as that may be. I remember being impressed by a colleague who had conducted a search for a country manager for a consumer goods company in a major strategic market, far away from headquarters. The best available candi- 268 GREAT PEOPLE DECISIONS ccc_people_255-278_ch09.qxd 4/3/07 1:15 PM Page 268 date was signed up, and took over. But there were danger signals almost immediately. The client and my colleague decided to assess the integra- tion after three months. They met individually with the new manager, and also with some 20 insiders, trying to get a sense of where things were heading. The lights were definitely flashing yellow. The new manager received in-depth feedback and mentoring. Af- ter another three months, a similar interview was conducted. Both the client and my colleague reluctantly concluded that the new country manager was not going to make it, and that it would be better for all con- cerned to acknowledge that. A new search began, in a way that would not unnecessarily embarrass the failed incumbent, and another candi- date who was previously unavailable was hired. “Saving face” can be a trap and a sign of weakness. You do no one a favor by keeping him or her in an untenable situation. If the integration can’t work, have the strength of character to end it. From the Successful Candidate’s Perspective When I was in the early stages of writing this book, I had a long meeting with Jack Welch. In the course of that discussion, I asked him about the best way to integrate a new manager in a senior position, particularly if he or she is coming in from a different business. His response: He’ll need to have a sponsor! I will advise no one to move when he or she is not hired by someone with real authority, real clout, who would support him, who would bet on him through thick and thin. This is the key. It’s essential for success. I agree. First: If you’re the successful candidate for a challenging post, and there’s no “champion” in sight, don’t take the job. The second thing that candidates should keep in mind is that the work is almost certain to be harder than expected. We asked the CEOs of biotechs how they would spend their first 100 days differently, if they had How to Integrate the Best People 269 ccc_people_255-278_ch09.qxd 4/3/07 1:15 PM Page 269 it to do again. Their answers are summarized in Figure 9.3. Most thought that they should have done more of just about everything. Acting and learning at the same time is almost always a tough challenge! The third thing that hired candidates should keep is mind is that they can and should demand the kinds of organizational support outlined in the previous section. Most companies provide only minimal integra- tion support. It’s not because they’re cheap or malevolent, but simply be- cause they don’t know any better. Asking for this support and helping the company plan for it can make a big difference. Fourth, new hires should start by focusing on a few key areas, rather than being pulled in every direction at once. A recent study by McKinsey & Co., written as a guide for the CEO-elect, highlighted three essential areas: 1. Understanding the organization and its other leaders more fully 2. Diagnosing and addressing their own weaknesses 3. Identifying resources that can smooth the transition, including the right advisors 11 270 GREAT PEOPLE DECISIONS "In the first 100 days, my focus on … 13 3 15 1 10 0 37 111 313 312 8 3 10 1 115 should have been lower …should have been higher”: (a) … understanding the market … (b) … understanding the organization … …(c) understanding the abilities of the company . . . (d) … meeting key people of the company … (e) … meeting key customers… (f) … communication to shareholders … (g) … meeting key stakeholders outside the company … (h) … broad communication into company … (I) … reshaping the strategy … (j) … rearranging my team . . . … “: FIGURE 9.3 Attention in the First 100 Days—Revisited Source: Biotech CEO Survey 2005: The First 100 Days, Egon Zehnder International. © Egon Zehnder International. ccc_people_255-278_ch09.qxd 4/3/07 1:15 PM Page 270 Yes, life at the top can be lonely, but you can work against that out- come. A key strategy for success is to find the right type of personal advi- sor, which more than 80 percent of the managers we studied in the financial sector cited as one of their key strategies. The most frequent ad- visor in that sample set was a colleague from the executive committee, followed by the company’s president (mainly among external candidates) as well as external sources, including a variety of consultants (to gain in- sights either about the sector or about the integration process itself). 12 Eventually, the new manager must also make the critical decision about which expectations to honor and which to abandon. 13 The expec- tations defined at the outset are very likely to include conflicting, or even impossible, goals. This problem may be aggravated by the implicit or explicit promises that have been made by predecessors. Expansion plans, job security, promotion prospects, career trajectories, compensa- tion expectations, and working conditions—all are grounds for expecta- tions, which may or may not be met (or even “meetable”). The new leader has to surface and deal with these expectations, which otherwise may translate into “broken promises.” Meanwhile, of course, the new manager has to confirm his or her team. The initial months are a very difficult period, because the new manager has to judge the competence and attitude of team members while still working with them. Each side is sizing up the other, wondering if the other will “make the cut.” At the same time, someone has to be making and shipping the widgets. When we asked the financial institutions’ CEOs what they should have done differently during their first three months in charge, the most common response was they should have paid more attention to analyzing and managing the company’s senior leaders. The biotech CEOs said that they should have developed a better understanding of the abilities of the company, and spent more time diagnosing and redeploying their team members. Finally, from Day One all the way through Year Three and beyond, the new manager has to make a special effort to seek out and spend How to Integrate the Best People 271 ccc_people_255-278_ch09.qxd 4/3/07 1:15 PM Page 271 personal time with representatives of all relevant stakeholders. If I had to make just one recommendation, based on my experience, this would be it. There is no substitute for your personal presence, and personal touch. The Human Element The power of “personal touch” can’t be overemphasized. Stated nega- tively, the failure to develop strong personal relationships with key play- ers is the most telling indicator of integration failure. Stated positively, if you can find allies who will go to the wall for you, you can compensate for almost any other shortcoming. Developing relationships with key people is essential for many reasons. First, as noted, allies (in the form of experienced organiza- tional insiders) can help the new manager succeed. They can help ac- celerate the learning process, shortening the diagnostic period without sacrificing its quality. And good relationships are the basis of trust, which in turn is a critical underpinning of leadership and “followership.” In this Age of the BlackBerry, I can’t emphasize enough the critical importance of spending enough time person to person, eyeball to eyeball, in order to develop trust. Trust grows out of character (including in- tegrity, motives, consistency of behavior, and openness) and compe- tence. But assuming that you have the right character and competence, as well as the minimum level of formal authority, your ability to cultivate trust will depend critically on the amount of quality personal time that you spend eyeball to eyeball with your boss, your key team members, and other relevant peers and stakeholders. This commonsense observation has recently been confirmed by dis- coveries in the field of neuroscience, focusing on brain cells called “mir- ror neurons.” These cells apparently help us sense the movements another person is about to make, and prepare us (on an unconscious 272 GREAT PEOPLE DECISIONS ccc_people_255-278_ch09.qxd 4/3/07 1:15 PM Page 272 level) to imitate that movement. Simply stated, we are prepared to smile the instant the other person smiles. An emerging notion in the philoso- phy of mind, moreover, argues that we understand others not by observ- ing them and thinking about them, but by “translating their actions into the neural language that prepares us for the same actions and lets us ex- perience alike.” 14 I’ll take the liberty of putting these two ideas in the same sentence: When we spend time with others, we experience them through the work of our mirror neurons, and by experiencing them, we understand them and bond with them. Face time—eyeball to eyeball—is important. The development of bonding relationships is bound up with the eyes, which contain nerve projections that lead directly to a key brain structure for empathy and matching emotions. 15 When we are interacting with a person, that struc- ture—again, accessed through the eyes—reminds us whether we love or loathe that person. 16 There’s simply no substitute for one-on-one sessions. If you could do only one thing in service to integration, this would be it. How to Beat the Odds A couple of weeks ago, I received a research brief from the McKinsey Quar- terly on the subject of who should and shouldn’t run the family business. 17 The report showed that family-owned companies run by outsiders appear to be better managed than other companies, while family-owned companies run by eldest sons tend to be managed relatively poorly. This last correlation seemed particularly strong. The authors asserted that family-owned companies run by eldest sons accounted for 43 percent of the gap in managerial quality they identified between companies in France (where almost half of family companies are run by the eldest son as CEO) and those in the United States. When I read that article, however, I was reminded of a case How to Integrate the Best People 273 ccc_people_255-278_ch09.qxd 4/3/07 1:15 PM Page 273 [...]... we can make great people decisions even as we cast our votes The world can only get better as a result ccc _people_ 2 79- 292 _ch10.qxd 4/3/07 1:15 PM Page 292 292 GREAT PEOPLE DECISIONS I I I Writing this book has been one of the great experiences of my life I hope that it will be useful to you I wish you the best as you make your great people decisions, and as you help yourself succeed along with your... therefore a win-win solution, both for you and your people How about Yourself? For most of the preceding pages, we’ve looked at principles and practices from the employer’s point of view Well, the other great thing about ccc _people_ 2 79- 292 _ch10.qxd 4/3/07 1:15 PM Page 281 The Bigger Picture 281 great people decisions is that they apply equally to you and your own career decisions By now, you re better equipped... discipline and objectivity in assessing candidates—even when father assessed son Both showed courage and compassion In my estimation, that’s how they beat the odds cited in the McKinsey study And the lessons are more broadly applicable, I think If you want to aim at great performance, and if you want to make great people decisions surely and consistently, do what this family did: Be selfaware, look... right people is doomed from the outset ccc _people_ 2 79- 292 _ch10.qxd 4/3/07 1:15 PM Page 286 286 GREAT PEOPLE DECISIONS Looking to History One way to assess the importance of great people decisions is to look to history We see great leaders in the light of their own accomplishments, and sometimes also in the gaps they left by failing to groom an appropriate successor Alexander the Great and Napoleon are, ... Aristotle voted for democracy So do I—especially when that democracy is run by the best possible public servants, identified and selected through great people decisions And if we can make great people decisions at the national level, ccc _people_ 2 79- 292 _ch10.qxd 4/3/07 1:15 PM Page 291 The Bigger Picture 291 can we also look one level up, and make them on an international level? I hope so, since this is obviously... mastering great people decisions not only can help drive organizational performance, but also can enhance your chances of personal career success Now it’s time to adopt a bigger frame In this final chapter, I explain why making great people decisions is important on a much larger scale A 2 79 ccc _people_ 2 79- 292 _ch10.qxd 4/3/07 1:15 PM Page 280 280 GREAT PEOPLE DECISIONS Every Day, All the Time Because you ve... worked for, and how miserable he or she made you and your colleagues Ultimately, terrible leaders bring themselves down, but they can create a lot of heartaches for others along their paths They can steal the happiness, even the health and well-being, of all those around them. 2 Again, let’s turn to the bright side Mastering great people decisions will help you choose the right bosses for your team They in... internalized the lessons of Great People Decisions up to this point, you have the skills you need to hire someone for your team, promote a team member, and participate in other key people decisions in your organization But there’s more: You also possess a set of tools, processes, and concepts that should be invaluable in your leadership role every day, all the time Why is this so? There are several answers... Places You ll Go!,4 which contains great wisdom about life and its challenges The first page reads: Congratulations! Today is your day You re off to Great Places! You re off and away! Good luck in your great people decisions! ccc _people_ 293 - 296 _appa.qxd 4/3/07 1:15 PM Page 293 APPENDIX A The Value of Investing in People Decisions few decades ago, a number of consumer goods companies realized that larger and. .. these resources can help you identify some further useful do’s and don’ts 3 The more advanced book references are likely to be of interest mainly to specialists 297 ccc _people_ 297 -300_appb.qxd 4/3/07 1:17 PM Page 298 298 GREAT PEOPLE DECISIONS 1 Introductory Notes Hattersley, Michael ( 199 7) Conducting a Great Job Interview Harvard Management Update, article reprint no U9703C Jenks, James M and Brian . the other great thing about 280 GREAT PEOPLE DECISIONS ccc _people_ 2 79- 292 _ch10.qxd 4/3/07 1:15 PM Page 280 great people decisions is that they apply equally to you and your own ca- reer decisions. By. and advancing your own career, making great people decisions will also help you make others very happy. Think of the worst boss you ever worked for, and how miserable he or she made you and your. lessons of Great People Decisions up to this point, you have the skills you need to hire someone for your team, promote a team member, and participate in other key people decisions in your organization.