Advisory company CEB reports that companies employing innovative approaches to transition management not only focus on transitioning the incoming leader, but also the existing team and other colleagues. These approaches produce less organisational paralysis and employee attrition during the transition and increase the employment value proposition and reputation for integrating new leaders.
CEB’s research draws on large-scale quantitative research efforts representing more than 30,000 leaders including heads of HR and recently transitioned leaders at large organisations. Findings show that at least nine-out-of-10 teams led by well-supported, high-performing transitioning leaders meet their three-year performance goals.
In addition, the risk of attrition for their teams is 13% lower than average and their teams show discretionary effort levels two percentage points higher. Conversely, companies that lack an effective leadership transition management process may be disappointed in their new executive’s performance as 46% of leaders underperform during the course of their transition. Leaders struggling in transition have direct reports who perform 15% worse than those who work for a high-performing one and are 20% more likely to be disengaged or leave the organisation.
“The reality is that a macro-environment of high expectations means leadership transitions now occur in greater numbers than ever before – and with high stakes for all involved,” said Steve Meyer, general manager, CEB.
“Ironically, most organisations leave transition management to the individual who knows the least about the organisation, the incoming executive. The most progressive companies have begun to establish more rigorous and repeatable processes to address leadership transition management and are seeing important results from their efforts.”
CEB advises that successful leadership transition management can help organisations avoid significant business risks, but most transitions underperform or fail outright. This is because they employ an overly generic approach focused exclusively on the new leader’s actions, and with support confined to early days of the transition.
Companies consistently transitioning new leaders achieve better results through several steps: to address this corporates are advised to approach each leadership transition in appropriate context — viewing each transition through a situational lens, taking into account the degree of role clarity and the level of urgency to produce results.
