Today, when senior executives – especially CEOs – turn over, the newcomer is expected to produce results in short order. There is little time for becoming accustomed to the new position and the new organizational culture – not to mention new business skills or knowledge that may be necessary when the executive’s move involves switching industries.
As a result, a new consulting line has developed which provides coaching and training services to help executives step off smartly in their new jobs. On the surface, this sounds like a good idea, increasing the chances both for the executive and the new organization to make a success of the relationship. But is it, really?
One has to wonder what the need for such services says for the wisdom of the choice of the particular executive who needs them. It may very well suggest that the executive isn’t really right for the job, and that the board is not doing effective due diligence.
More fundamentally, it suggests that the problem is really in the pressure on the executive to produce quick results. This pressure comes from many quarters – from shareholders to stakeholders of varying legitimacy to analysts. However, it is all filtered by the board. Directors can uniformly yield to or resist this pressure (both happen), or they can determine which elements of it require what sorts of attention, if any, and then act accordingly.
One area where the company is almost never well served is by inattentively throwing an executive unprepared into a fire storm that was created by similar inattention. Managers wrongly represent themselves as able to survive such an experience, but rightly demand the ability to parachute financially out of it. This is just more evidence that effective corporate governance – and effective management – start with effective boards.
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