#107: Why Executive Transitions Fail More Often Than You Think

Speaker A: Welcome to Stepsero. Modern work is a lot. Let's take it one conversation at a time. Today my guest is Navid Nazimian, the world's number one executive coach, ranked by CEO today three years running, and the international best selling author of Mastering Executive Transitions. In this episode we talk about executive transitions. The fact that 40% of them fail within the first 18 months, the fact that the importance of what happens before day one, stakeholder management and more. Let's get into it. Navid, welcome to the Stepsero podcast. Thank you so much for making the time.

Speaker B: Thank you, Matiu. I'm, um, stoked to have this conversation with you today.

Speaker A: Navid, you have been ranked number one executive coach globally. You are an international bestselling author. I have about 15 to 20 minutes to explore a few angles with you on the topic of executive transitions, which is your field of expertise. Now, let me start, if it's okay, with the premise to this conversation and specifically with a few unbelievable stats that are covered in your book called mastering executive transitions. 40% of executive transitions fail within the first 18 months. The cost of replacing an executive can be anywhere between 10 to 20, 30 times their salary. However, 90% of budgets you explain are spent on the recruitment and the selection process. Only 10% is spent on the onboarding, the coaching support, which almost sounds like, hey, here's your laptop, there's your new corner office. Here's a pat on your back. Let's go. Now, I'm obviously simplifying, but I'm, um, no executive. I can only imagine that transitioning to that level can be a highly, highly stressful experience. What can you tell me about that? And is it the case that organizations assume that because you are at that level, you must have it all figured out from the get go?

Speaker B: Absolutely. See, the statistics are all correct. The way you have cited that. Right. So the 40% vendor rate, by the way, is from Heiderick Struggles, one of the largest search firms in the world. And they have placed over 20,000 executives over the course of 10 years. And when they went back and did the analysis to see, okay, how are those 20,000 thousand executives doing? They found out that 40% of them within an 18 months time period are not in the role anymore. So they have either been pushed out, they have failed, or they have quit in their own way. And so that brought me to the big question as to how can this be? I mean, look, I was HR director with many organizations previously and I know how much care, energy and effort goes into those top level appointments. Matthew, if you were to be the next chief executive of Vodafone Group. Let's assume you and I have had an interview and I've convinced you the correct CEO, that doesn't mean anything. I would need to pair you up with a lot of other people within the same organization because it's a CEO appointment. You would need to speak to the chair of the board and probably more than one board member at the same time. We would do a diagnostic about, you know, your personality type. We would do, uh, a reference checking with the headhunter that has suggested your profile to us. We would go and do the background screening to another special company because Vodafone works in a telecommunications space, is considered a sensitive, uh, industry. And so despite all of that, you would only have a 60% chance of succeeding. And so that's the big question mark. And when you then start to double click on, okay, so what, what gets in the way? And that is a full chapter in my book. I, I, I Explore the top 10 research reasons for executive transition data. But if I wanted to share a few with you and your listeners today. So the first thing is it's the functional slash technical skills that gets you hired into the C suite, and it's the lack of so called soft skills that gets you fired pretty quickly thereafter. Right? So, so your chances of succeeding are high if you are competent functionally or technically speaking. But if you cannot deal with culture, people or politics or a combination of those, then you're essentially doomed to fame. So that's one of the top reasons. The second reason is, and Marshall, um, Goldsmith, who was a mentor to me and someone who's very kind and he's written a very kind forward to my book, he, uh, in one of his books said it much more elegantly than I could. And he said what got you here, uh, won't get you there. Meaning even if you were the successful CEO of Barilla, yeah, an amazing Italian company, an amazing brand that does not guarantee anything whatsoever that you will be equally successful at Vodafone. And so that's the second reason. And then the third one is what you pointed out, which is okay. And I know from my own experience that that's pretty much what you expect, right? You get your laptop, you get your corner office, you get your pa and good. You go. It probably is not enough. And so then that makes a question as to what are, uh, successful interventions. And I unpack 12 of those interventions and in the book to demonstrate how the executive, how the hr, uh, department, and how the board of directors can support that appointment to be a successful one.

Speaker A: Navid, I found your reference to Marshall Goldsmith and his book very fascinating. You know, the what got you here won't get you there. It almost sounds like, I guess I'm paraphrasing. When you perform a transition at that level, you're somehow trying to unlearn old ways. You are getting rid of this old playbook and you are transitioning into a whole new reality. You are developing in a whole new way. Do you think it's fair to look at this as some sort of identity shift?

Speaker B: Absolutely. Although I don't personally use this this term, I have to be very careful about what language lands with my executive C suite clients and usually identity shifts or journey or some of the softer language that we love to use in hr and even as coaches don't necessarily work with them. So what I use instead is, okay, assuming you are still my. My coaching client, I would say, okay, Matteo, this is the study I will share with you an actual study from DDI. And they did this with over 4,000 leaders. And what they did is in the demographic part of the survey, as every good survey should do. They check your actual seniority level, your gender, your age bracket and what have you. And so assuming you are in the 50 plus bucket, you look far too young for me to be that. That old. I assume if you're a CEO of Vodafone, you are more likely to be 50 plus and white and male, by the way. And I would then share the outcomes of this survey. I would share the findings of the survey with you, and I would point out to the following, which is, okay, let's say, Matteo, if you were not the CEO of Barilla, but you were like the CFO of Barilla, and this is your first big CEO appointment, so you're really stepping up for the first time into the chief executive level of a major organization. Vodafone is one of the top 10 biggest companies in Europe. If that's the case, let me share with you what these 4,000 leaders have said about what skills and activities they were expected to demonstrate at what level. And then I would then coach you through this topic and say, okay, Matteo, now over to you. Based on everything you know to be true, based on your conversations with key stakeholders, based on the search brief you have received from the headhunter, based on everything you happen to know, how do you think you need to demonstrate a new mix of skills and activities? Bear in mind that it may or may not be similar to what got you the big promotion and, uh, that one intervention, that one stopping you in your tracks and saying, okay, let's take a step back, both of us. I will just share with you the high level outcomes of the survey. And now over to you. That one step is, is very likely to stop you from walking on all the landmines that are laid out in the new Vodafone headquarters for you only to walk up to and then explode.

Speaker A: Interesting. I. You made me think of, um, a section in your book and maybe you can help me out because I'm not quite sure it's related to this, but it somehow reminded me of this section you touch on vertical versus horizontal development. Right. And, uh, horizontal development, you write, is about getting knowledge, skills and information. I was, however, surprised by the notion of vertical development because in my head I thought, well, we're talking about high caliber executives, CEOs, how much more vertically can you develop? Can you shed some light on that specific side?

Speaker B: Sure. So that was my raison d' etre for becoming a coach, by the way. I felt that having spent one and a half decades in HR and having done various programs with the biggest HR gurus and universities, I was essentially outdone on the HR functional technical development side. And you know, when looking around and trying to think of, uh, what would challenge me to grow more vertically as a leader, coaching came to me. And so again, I think it's fair to say that when I sign up to become a professional qualified coach, I was by no means looking to jump ship and do what I do these days full time. And as a matter of fact, I did that in the year 2014 and I only jumped ship in the year 2022. So for, for a period of eight years, I continued to be a full time HR executive and only doing a very limited number of coaching engagements on the side. And so another way of thinking of vertical development, Matteo, is to, you know, if you assume you have this cup of water and you keep pouring functional technical stuff in it, you do the HR degree with the ulric, then you do this other thing, then you do this other thing. By the third or fourth program A, you don't have any more space left, so the water will start to flow over. But more importantly, you're unlikely to remember two or three interventions ago what you actually did there, because it's all very functional technical. Whereas I want you to think about vertical development as expanding the size of the container. This is my TMAC here. And so that is the real game changer. And that is what, no matter how experienced you are, no matter how much functional technical expertise you have under your belt, how many MBA and whatever other qualifications you have, you would still grow as a leader and as a human being. And that's the ultimate gain in the leadership development area.

Speaker A: I find this such a fascinating field, Navida, and you pretty much introduced me to it. Your book introduced me to it. And I find fascinating that executives, CEOs and what have you, like, they can count on a figure like yourself. You, you know, the saying goes, it can be lonely at the top. And you make a few references here and there in other podcasts and, and in some, in uh, some speeches of yours that I've listened to. And uh, you said something that got my interest, which is once leaders get the top job, they sometimes, or I would say more often than not, get cut out of the informal information communication channels they rely more on, on these dry dashboards. Now, does building strong alliances become a main focus at that point? And if that's the case, at what stage of the journey of the transitioning journey does that happen?

Speaker B: So I'm not sure I would put a timing behind it, but one of the key interventions I conduct with any coaching client that is in transition is to map with the support and input to map the key stakeholder universe. And when we do that, I always insist that we look at external stakeholders. So if we were to use the example of Barilla, as soon as you become the CEO of a company of that size, although technically it's a family owned business, I think you would be benefiting from ensuring that external stakeholders are also kept in your stakeholder log. This could be the, you know, famous politicians that have a say in what determines the, you know, production sites that you are having in the country. This may be the head of the trade union, because a large chunk of your workers will be unionized. And so you really don't want to have a bit of a, uh, surprise coming your way as and when the labor is not entirely happy with your policies. And so once we do that, that then becomes a bit of a roadmap for the executive to think about more deeply. Who are the critical stakeholders to my mission success and what engagement plan do I want to pursue to make sure that they are kept in the loop and that we have a plan to improve relationships. Now, the reality is, unless you're the holy Dalai Lama, that not every single one of your stakeholders will be your biggest friend and biggest supporter. So some of them will actually have, you know, things in mind that are countering your mission delivery but despite that, it will be foolish to ignore them or to hope that by ignoring them, they are kind of staying out of your lane. And so even though it may be that you are engaging with someone who is maybe competing for you for the same outcome, or someone who actually doesn't like you for whatever reason and wants their own candidate, maybe a board member in the seat that you are occupying right now, I think you still ought to play the game, which is to, to have constructive conversations with them, to keep them informed about what's coming up. And as a minimum, if this was a marketing game and you have the promoters, you have the detractors, and you have the neutral zone to be able to move them from the detractor zone into the neutral zone and hopefully over the course of the next year or two, into the promoter zone. So that's what we would do, and that's how you would make sure that you go about building, nourishing and nurturing relationships, and that matter to you and to your mission success.

Speaker A: Before we get to the, let's say, the final part of the conversation, Navid, I want to make a reference to your framework, which is the Double Diamond Framework. You have developed this comprehensive framework made of seven phases. You explain that in great detail in, I believe it's chapter 12 of the book, and you also say you made a few references across a few podcasts. I believe that phase one and phase seven, so discover and develop are usually the ones that get skipped the most. Why is that the case?

Speaker B: Yeah, see, um, the Double diamond framework is a 12 to 18 months journey, and that starts with phase one discover, and that is your typical day minus 90 to day zero. So again, assuming, Matteo, you are the incoming chief exec for Vodafone, and your appointment date is on the 1st of July, which is four and a half weeks from now. Now, if you were to listen to the advice that the other great book provides to you, which is the first 90 days, you would need to sit on your hands, waiting patiently, looking outside, uh, out of the window, and then start to run like crazy on day one and then drop the ball on day 90, which, funnily enough is phase two of my framework. But. But that already should give you an indication that if it's only 1/7 of the solution, it can't be fit for purpose. So that's the first thing I want to point out. The second thing is the Discover phase, the day minus 90 to day zero, which is where you would be finding yourself in, let's say Vittorio Colao is The current chief exec or Margarita Della Valle actually is a concrete example. And it's been announced by the board that you're the incoming CEO and you would eventually take over the role from her. Now that the announcement has been made, it's perfectly fine for you to start to reach out to Margarita and say, hey, Margarita, I would like, as someone who has been in the role for five years, really appreciate some guidance, wisdom and advice. You have clearly been in the role far longer than I have been. Um, I'm not even in the role yet. I would really like your opinion on the role. Second thing you could do is to chat with her and with her permission, to start to reach out to the executive leadership team members. That will be your dark reports in four and a half weeks from now. And so assuming she's fine with that, what you will do is they have all read the announcement, they have all gone on LinkedIn and Facebook and Instagram trying to check you out, and they find only very limited information about you. What you can do when you do reach out and connect with them virtually and individually is to learn about them and also give them an opportunity to learn about you, what you care about as an incoming leader. And then the third thing you may want to do is to, let's assume in two weeks from now, in the middle of June, just before the summer break. Vodafone has always this strategy offside with the EXCO and the board and it's a two day event, it's facilitated by someone like myself and. Yeah, well, technically you're not in the role yet. Yeah. So you could, you know, relax where you are and leave that to Margarita and the rest. Or you could raise your hand and say, um, can I take part in this offside? Because quite frankly, I will be the one that needs to deliver on all the stuff you are going to agree upon and I might as well have a say. Um, and I might buy into that because it will be very hard for you and for me if I came into the role four and a half weeks from now, only to go back and say, sorry, um, I'm, um, not agreeing with this. I don't like that. This one I would like to deliver in a very different way. And so you see, Matteo, how you can do very concrete things between now and you're technically in the role, that would give you a leverage and give you a leg up so that you don't have to figure everything out in your first 90 days. So that's phase one and that's why it's most often skipped because of this myth, this legend of the first 90 days suggesting, oh, it's like a hundred meter sprint, you know, you just run 90 meters and you're done. The seventh phase, which is called develop, is actually only one session. But similar to what I shared with you about the new mix of skills and activities, it can be very powerful. And this is where let's assume you have been in the role and you and I have been working together for the last 12 months. This is our final session as as a coach and coachee, and what I would do with you as a homework before coming to the session, I would ask you to prepare to think about deeply what happened during the last 12 months. If you wanted to, you can use the seven phases. And more importantly, what assumptions did you make and which one of those actually came true and which one of those were completely false? What mistakes did you make, honestly, hand on heart, what you know, what would you do differently and why? And more importantly, what did you learn as a result of transitioning and our work together over the course of the last 12 months that you would like to embody so that as and when you go on and become the prime minister of this wonderful country called Italy, and that you want to embody in your next transition that you are thinking about. And so what we do by doing that is to really help you to focus, reflect, take a session out, to really think hardly about what actually happened and try to make sense of it. And by doing that, we are hardwiring your insights into your system so that you can transition more competently next time.

Speaker A: Navid, I have one last flash quick question for you. And look, obviously I have had the chance to read Mastering Executive Transitions. I found it extremely insightful. But if I were to, let's say, flick through it, is there any principle page notion you would want my finger to land to make sure that I a hundred percent remember that?

Speaker B: Yes. And I would actually like to quote, uh, someone called Nassim Taleb, and his, uh, famous quote is invest in preparedness, not in prediction with this.

Speaker A: Navid, thank you so much. You've been fantastic, not just during the recording, but during the whole process of knowing you a little bit better. And, um, I hope we can do this again sometime.

Speaker B: Sure. Very welcome. Thank you, Matteo.