The Secrets of Successful Executive Transitions to the C-Suite with Navid Nazemian (Ep. #49)

Wendy Hanson  0:24  

Welcome, everybody. I'm so happy you have joined us here. We are able to talk to so many people that make a big contribution to what we're doing helping managers helping C suite people look at how do they grow and build their organizations. And I think today's conversation with Navid is going to be very informative, because we're talking about executives transitioning and what that means for organizations what it means to the executives. And I think even though a lot of knobbies research was done before the pandemic, the pandemic certainly exacerbates all this happening as we go forward. So I'm very pleased to be able to be talking about this today. So let me tell you a little bit about Navid Nazemian. Navid helps executives and their leadership teams accelerate and successfully transition into new roles. He is the author of mastering executive transitions. The Definitive Guide Navid is an unparalleled expert and the thought leader and executive transitions having lived and successfully worked in five countries across six sectors, and working with C level leaders on the same as an executive transition coach. He brings to the table and eclectic background that spans over two decades of Human Resources experience in some of the world's most admired organizations at the country, regional and global leadership level in both emerging and developing markets. Navid says my passion lies in supporting executives during critical transitions. I'm inspired by their courage to deliver value to the organization while staying true to their authentic selves. That's great. So welcome. Navid I'm delighted to have you on the podcast today.

Navid Nazemian  2:16  

Thank you, when do you thank you for the kind invitation and introduction. I look forward to our conversation.

Wendy Hanson  2:21  

Thank you. So tell me what, as you've talked to so many executives, what is top of mind for executives during their transition, because we're talking to managers out there and people that are listening from both sides that maybe their executive is leaving, and then the executive themselves? So share some of your wisdom on that?

Navid Nazemian  2:43  

Yes, sure. I mean, it's fair to say that no two executives will be the same. So depending on how many times the executive has gone through a transition, that may or may not impact what's up of mind for them. But just broadly speaking, when I was doing the research, I find that three topics are top of mind, typically speaking at the executive level, whenever they're going through a transition, the first one being the network and the peer relationships. So, you know, will I be able to kind of fit in? Is this going to be, you know, in new organizations set up, or a new division of setup that really works for me, and will I be able to establish my network and professional relationships first and foremost, the second thing that's top of mind usually is being able to navigate the matrix. And again, I appreciate pretty much all organizations by now have some form or shape of matrix embedded, some are heavily matrix. And so this is, again, a top concern, because the executive may be tasked with a transformation or a big change program, but they may not be necessarily the functional leader for the totality of that organization. And therefore, it's always a concern that they may have as to what's the ability and capability to be able to navigate the matrix. And third and not least, culture plays a big role. And I have seen this you know, going right or wrong, depending on which case study we look at, where someone has been really able to come into a new organization, really take the best of what they used to know and and experience and adapt and adjust to the new organizational culture. And we all have seen, you know, in my book, I talk about epic CEO failures. How, you know, some of the best and brightest, chief executive officers have failed shortly after they joined a new organization. And, you know, one of the top reasons for failure happens to be culture. So those are the just three things to kick us off on the topic.

Wendy Hanson  4:59  

Yeah, so Tell me a little bit more about the failures. That happened because of culture. Because we know that, you know, culture is so important. And if we don't have the right fit there, it isn't going to work.

Navid Nazemian  5:11  

Yes. So in my book, I actually researched the top 10 reasons for failure. And again, I did a meta study. So I studied other studies that allude to executive transition failure, and I did an aggregate of those, if we were to look at the top 10 reasons when the and aggregate these again into three core themes, it may not come as a surprise that, you know, the three reasons that getting away are people, culture, and politics. So it's not so much the case of the organization hiring a chief financial officer, and he or she isn't really good in managing the balance sheet, or, you know, the opposition hiring the chief HR officer, and he or she is really good in managing the people agenda. But it's more often this, the soft topics that get in the way. And of those culture, people in politics are the top three aggregated reasons for failure. And, you know, I think we can look at any prominent examples. You know, that was the easiest part of the research I had to do for my book. Because you know, when you go epic CEO, transition failures, you will, having a lot of results coming your way. But I think if we're just to take one example, SAP, you know, one of the Global Champions, and a very reputable, very successful organization, always had a co CEO structure in place. And so they appointed Jennifer Morgan, to be the new co CEO. Mind you, she was the first woman to head a company on Germany's DAX index as well. And shortly after that appointment, the organization, you know, had to make a surprise kind of move, and, you know, put her down as a co CEO, and pay her a severance payment of $2 million for that. And of course, the company blame the Coronavirus, and all sorts of different reasons for that. But I think it's fair to assume at that level, if you're making appointments, and they don't work out within a short period of time, you can assume that one of these top three topics got in the way. So that's just the prominent example of how something that looked very promising. Didn't work out and ultimately, Christian Klein, who was the other co CEO took over solo. Yeah. After what was previously hailed for decades, as a proven leadership model in that organization.

Wendy Hanson  7:47  

Yeah. Wow. And just so that our audience understands what's the failure rate and executive transitions, like, is this a minor problem, or you're looking at it as more of a major problem or somewhere in between?

Navid Nazemian  8:01  

It's actually the latter. So it's a 40% is the failure rate. And I had to research that very well. And there are four independent studies that all hone in on the same number, and the most prominent one is that from Heidrick and struggles, one of the largest search firms in the world. And they have done the analysis over 20,000 executive placements over a 10 year time period, and 18 months into those appointments. The executives were not around anymore, so they have either been pushed out there failed or they quit on their own. And so four out of 10 executives don't make it when going through a transition. That's the that's the real truth.

Wendy Hanson  8:46  

And when an executive fails, Navid what is the impact on the whole organization, like that is really pretty big if you put your faith into a leader, and you've got a 40% failure rate. Tell me a little bit about what you learned about that.

Navid Nazemian  9:02  

Yes, so So first off, when we generally speak about attrition, the figure that comes to mind is somewhere between, you know, one to two and a half times the leader salary. That's usually the cost that's attributed to attrition costs at the executive level when the this is a much higher number. So the real cost is more like 10 to 30 times the salary of the executive. So the cost is enormous and can be substantial. Now, if we were to just imagine a situation where the organization goes ahead and appoints a Chief Sales Officer externally to come and join that company. Now, there may have been a strong number two, number three inside the organization that had high hopes of landing that top job, but for whatever reason, the organization decided it's better to go externally and hire someone into that role. Now it's six runs into the post. And every everyone is pretty clear that this is not going to work out. Now, can you imagine how competitors will be all over that company's key accounts and gaining market share? Can you imagine the number two that that, you know, is a disgruntled number two, by now is actually actively exploring options to look for an outside company opportunity, and may or may not resign as a result, given that the sales are not really coming in, the morale and the engagement of the sales organization won't be great. And so you can see how quickly this one appointment will have ripple effects all the way throughout the organization all the way to, you know, their call center agent that is there to answer kind of the most simple customer queries, or the shop agents who are meant to be doing the sales on the ground in the retail stores. So that's how the 10 to 30 times figure becomes very, very quickly, very material.

Wendy Hanson  11:09  

Wow, it has it has such a huge impact. And what did you learn about the good decisions like the 60% that make it? What about those? Like, what what happened differently in some of those? You might have some examples before we keep talking about the transitions that didn't work?

Navid Nazemian  11:29  

Yes. So there are I speak about 10 key interventions that increase the likelihood of the executives transition success. And the first one is the executive is supported by a transition coach. And that's, you know, one of the one of the easiest things organizations can do to work with someone like myself, or many, many other leaders who are trained and qualified to do that. The second intervention is to make sure as an organization, that sufficient amount of effort is spent on the real parts of the executive onboarding process. Now, we all have, you know, heard of this book, the first 90 days is a very popular book. And I think it's fair to say that most organizations are doing a very good job in the generic onboarding program. So this is the onboarding problem for anyone and everyone. But when it comes to the executive level, and this is a study by Egon Zehnder, you can start to you get to see how the percentages start to drop significantly. So the first one, admin arrangements, you know, 88% of the organization's get that right? When we talk about the business orientation, a generic business orientation 86% get that right, when we talk about legal and procedural formalities, legal compliance, training, and the like, 85% get that right. But when we move to what I call the higher value onboarding items, then suddenly the figure drops to 52%. So aligning expectations with teams and line managers, only one out of two organizations get that right. And then we move down to organizations, organizing meetings with key stakeholders, that figure drops to one out of three. So only 33% get that right. And last but not least, when we speak about facilitating cultural familiarization, or an assimilation process of some kind, again, at the executive level, only 29% of the organizations get that right. There was another study that Egon zener performed, and they asked over 400 CEOs, what the experience was like going through the onboarding process, and 70% of those CEOs came back to say, there were other underworld completely underwhelmed, or that there was no structured onboarding process in place. Now, mind you, when the if you're the number one person in the organization, and that's the kind of experience you get, imagine what the experience is going to be like, if you just happen to be a direct report to that Exec.

Wendy Hanson  14:11  

Yeah. Wow, that is scary. Yes. Tell me more about the meetings with stakeholders that that because that's something that's a very actionable thing, that no matter what position you come in, in the company with onboarding is important, so that had a pretty big failure rate. So tell me about that.

Navid Nazemian  14:29  

Yes. So this is really sitting down. And this is an activity that the human resources function can support. But it doesn't necessarily have to be the HR person or the HR function that supports it, to really map out key stakeholders per the executive position. So looking at the universe and saying, Okay, if you're talking about you know, let's stay with the example of the chief sales officer, who are the crucial stakeholders internally and externally for this person. question that is key to their success, right? So you map that out. And then as and when you have someone coming into that role, it will become part of their onboarding exercise to really work through a sufficiently engaging and a communications kind of roadmap to make sure that they do check in with key stakeholders every now and then. And that they get, you know, meaningful data and input that they can weave into their own transition as an executive.

Wendy Hanson  15:31  

Yeah, that is so incredibly important. And to even understand, you know, you need to give people the background when you're connecting that new exec with the stakeholders, you know, with you, you don't know what you don't know, as you come into that. So is there any other preparation for that, in terms of what, how do you help somebody set up that conversation? Or do you just let it be? Because this is an exact, they've done this before? What's the middle of the road there?

Navid Nazemian  15:59  

Now? Yes. I mean, when you what, you know, it is shocking, I have I have come to know about organizations who delegate this down to a PA, and say, okay, as in when you're new line managers joined Kenny, make sure you put in some random meetings in the diary. Now, again, it's better than doing nothing. But I hope that organizations are a little more planful. And a little more structured around the very, you know, top of the organization coming in. I mean, there's another statistic from Russell Reynolds, suggesting that 90% of the total cost that is spent on executive hiring is spent on the hiring selection and assessment process. And less than 10% of the of the cost is spent on the same exact once they're on board. So in my book, I speak about the organizational imbalance. And so again, you know, how about just just dedicating a little more than the 10%, to make sure that not only, you know, we will hire the best and brightest executive out there. But actually, we will give them a reasonable chance of succeeding, once they have landed in and you know, some of these activities are part of the support package that the organization can provide to them. Yeah.

Wendy Hanson  17:20  

What else do do leaders in transition need in terms of resources, tools that can move that 10%, up to up to at least 25% of the budget and the time spent? So it's getting on the bus is one thing, but then getting it right, no one had to drive it is a whole nother thing?

Navid Nazemian  17:41  

Yes. So I think the executive transition support is really the best qualified support that is out there. And again, that that will come with organizational insight as well. I mean, there was another study that was done by Russell Reynolds. And they found that the best executives move to action faster than the rest. Now, when we imagine this situation, the chief sales officer has joined the organization, and they will inherit a leadership team, you know, inherited leadership team that exists. It's fair to say that after about three months into that role, they have a very good idea around who in that leadership team that they have just inherited, has got it, what it takes to see the execution of another translation of the strategy into execution. And some are just a little more hesitant and the way than other 369 months. And the research proves that, you know, wise, you can always wait for a year or longer to make those kind of judgment calls, the date, the additional data points that you will get are slow and incremental, that you might as well, you know, move on after three months on, you know, do I need a partial upgrade to the executive leadership team? Yes or no? And if you if so, who is the one or two individuals I would want to pick for that. So again, it's it's the timing that matters here. And the best execs move to action faster than the rest. So this is just another angle to the same topic which can be provided by the executive transition coach or the organizational process to make sure that you know, not money is not left on the table, because the CEO or the CC s o wants to take the time to make a full and final assessment of the individuals on the leadership team.

Wendy Hanson  19:39  

Yeah, wow. That is that we often talk when we talk to managers about taking over teams, that you really need to spend the initial time listening rather than coming in and thinking you know, certain things does that differ anymore with a very senior exec CEO in a position The listening mode, which I'm curious,

Navid Nazemian  20:02  

yes, it's absolutely true. And it holds true also at the executive level. And we won't get into the details of the Double Diamond framework that are described in the book. But the first two phases, when the the first phase is called this cover, it actually started minus 90 days, two days zero. So this is the exact before they actually formally join and, and start in the new position. And all they do is is, is, you know, discovery, the new organization, the new position, the context, the stakeholders, deep dive into numbers, and so on. And, you know, phase one, or phase two of the model is called immerse. And again, there's no action really required or suggested there. So you spend something like, you know, the first 120 days, just be really a fly on the wall, absorbing information, really trying to make sense of what you're coming across, always bearing in mind that culture, people and politics are the top three aggregate reasons for failure. So, so really taking your time to then come to what the model suggests as adapt. So that's, that's phase three of the seven phase model.

Wendy Hanson  21:20  

Yeah. Oh, that's, that's really helpful, because I do think that that's what's needed the most in the beginning, in my experience, is the listening mode as and is there gender bias in supporting executives in transition?

Navid Nazemian  21:35  

Yes. And this was a surprising finding. I actually delayed the launch of the book by a few weeks just to make sure that study gets reflected as well. So this is the transition, the executive transition study that is performed by DDI. And I had gotten the latest one in late in 2021. And what they do is what every good study should do, they covered the demographics right at the outset. And what they found out is, and again, this is not a gender specific study that just happened to survey female and male leaders inside the same organization. And so what they found is that somewhere between 13 to 22 percentage point gap exists when it comes to organizations supporting the executives with a transition. So and the three items they surveyed were, what is the percentage that received a leadership skills training? What's the percentage is that went through a formal assessment? And third, and last, what is the percentage that were assigned a formal mentor or a coach? So these were the three items that relate to transitions. And as I said, there's there's a delta between 13 and 22 percentage points. Now, the key question then arises, how come? How come that for the same level of execs inside the same organization, there seem to be a bit of a delta between the support that's provided, and the short answer to that when they use because these support vehicles are not baked into the executive transition process. So it becomes a negotiate negotiation, it becomes something that the exact steps forward and asked for, or in some cases, demands. And therefore, you know, we can get into all these, you know, hypothetical space where, you know, if I have read the book from Sheryl Sandberg, and I want to lean in, and I want to fake it until I make it as a female exec, I may be less likely to come forward and ask for support. Whereas if I'm kind of the male, same kind of level counterpart, I may be asking for a pay rise the corner office, and by the way I can I also have a transition coach. So we get into this interesting space. But I think it's fair to say that all buyers can be eliminated in one go, if whatever support is provided to the execs is baked into their onboarding and transition process.

Wendy Hanson  24:12  

Well, I have to say, I have a little reaction to the fake it till you make it for women going into those positions, because I have not heard anybody say that about a man, they get till you make it. So we have a prejudice that's built in about women leaders. And I think we really need to hold responsibility to make sure that there's much more equality there. And and it's a problem because of the numbers up there. So it's, we don't have enough women on boards. We don't have enough women in C suites and CEO positions. So we've got to be careful of what that looks like and make sure that we all work together to you know, make a more equal footing for anybody coming into an organization. Yes, yes, because women don't need to fake it till they make it We've got so many quality women out there. So exactly. Reaction.

Navid Nazemian  25:04  

Yes, exactly. And bear in mind, there is no gender difference. When we look at the failure rate, for instance, it's 40%. Irrespective, there is no gender difference when it comes to any of the other interventions, really. So this was the only data point I could find where, you know, again, assuming that it's not baked into the process, it becomes a thing of stepping forward and asking for it. And there may or may not be a bias in, you know, a female leaders stepping forward and asking for the support, and maybe their male counterparts being more open and more, yeah, happy to be requesting that sort of support.

Wendy Hanson  25:46  

Yeah. Well, that that I can buy into, you know, that men might be more aggressive in terms of asking for that. And women need to stand up and say what they need there, but they're by no means not coming in on an equal footing in terms of their experience when they get there. So cool. Now, what should one remember about an executive in their last 90 days when you transition out of the role? Because there's a lot of differences there? What what do people need to keep in mind?

Navid Nazemian  26:20  

Yes. So first off, when we, when I googled the term, the first 90 days in the new role, and I Google, the same kind of term with the last 90 days, you know, in a role, I get about 1% of the total results. So 99% of the results are around the first 90 days. So I think it's fair to say that a lot of attention has been given to the first 90 days topic, generally speaking, and a lot less attention and focus has gone into making the most of your last 90 days. So that's just an interesting data point I wanted to put out there. But again, as an outgoing exec, you know, you ought to continue to act in a manner that would enhance the chance of leaving behind a leadership legacy that outlasts your turnover in the organization. And so what most executives don't realize is that the legacy is often fully defined only after they have departed from the organization. And therefore, you know, the last 90 days, or you could, you know, say the last 120 180 days are really fundamentally important. You know, one of the former's kind of CEOs that was interviewed, mentioned a sentence, like running through the finish line. And again, you know, that individual happened to be one of the best performing CEOs globally, and ranked in the top 40, of CEO and hundreds. And so I think that there's something about not dropping the ball, just because you know, that you are going to retire or you're going to, you know, step into your portfolio live. But but it's, instead of giving an actual framework and saying, This is what you should be doing with it, the way I came at the topic is to ask some reflective questions. And you know, I can I can share some of those with you. And if you want to, we can unpack any of those. So, so one of the questions would be, would I undertake any major decisions if I had another three years ahead of me? Right. So again, that's, that's one way of looking at, okay, I know, I have only what three months left to give. But if I had really another three years ahead of me, would I really, you know, fundamentally make any major decisions. And again, that can serve as a guidance into what what needs to be done. Another reflective question could be, which people related decisions would I make, if I could stay for three more years. And again, this comes to, oh, you know, I may have someone in my leadership team, and he or she may or may not be quite up to the performance level, that's expected, certainly not a real concern or worry. But, you know, so and so needs to come in and make their own judgment call. And so I don't really want to rock the boat. Now, all that this individual is actually doing is delaying a decision. And they are probably the most insightful incumbent to make that decision, and that judgment call. And so let's say the new CEO comes in and he or she takes another six to nine or 12 months to transition fully into the role. All we have done is to leave money at the table. And to kind of shy away from a decision that could have been taken if the individual would have been enrolled for another two years. And I'm going to pause there to see if if you know any of this resonates or if you want it kind of to go Without further the roots off the last 90 days,

Wendy Hanson  30:02  

yeah, no, I think that's good. And we're kind of coming to the end of our podcast here. But one thing that struck me with what you were saying was, we always talk to managers about you want to think in the beginning about what your legacy should be, like any leader should be always thinking about their legacy, because it's, What decisions do I make are going to impact that? And what do I want to be known for? What do we want to be known for when I leave this organization? And if you have that, in your mind, as you're making some decisions, and what's going to be best for the organization like that legacy, you want somebody to leave an organization, and they said, Wow, what an impact they made in these areas. And it may not be all areas, but it may be, they were able to move us up here in a different way. And they brought on really important people to be able to fill different roles in the organization. So I do believe legacy is something that really should happen way before the your your last 90 days. So hopefully, people are listening to that. Because no matter where you are, in your in your journey, you should always think about what what, what is it that's going to be at top of mind of other people when you go to leave, and make sure that you live up to that.

Navid Nazemian  31:20  

Absolutely. And absolutely. And I couldn't agree with you more. And by the way, you know, some of these reflective questions actually extend that time horizon, although technically, you know, that you will be reaching, you know, the end of your executive chef live in that organization in that role. But yes, absolutely. And what's also true when he is, you know, reflecting on what is the new mix of skills and activities that are needed to be performing at, in my new position, you know, again, there are studies suggesting that when you make these leadership shifts, as they're called, so you're moving from being a manager of managers to being an enterprise leader, to being an ex co leader, at the high strategic level, you know, your time spent on certain activities and skills will fundamentally shift. And therefore, what made you successful until now may or may not serve you well going forward. And therefore, you know, this question of legacy comes in and this question of, you know, what do I see fundamentally shifting in the new position that I'm going to enter soon? And how do I want to leverage that in order to create the legacy that I've always dreamed of?

Wendy Hanson  32:37  

Yeah, that's great. So navaid, if people want to learn more, where can we point them to? We'll have we'll have a number of your social media, connections in our show notes, but anything else that you want to share with folks about where to find you?

Navid Nazemian  32:53  

Yes. So I would say LinkedIn is probably the best place to connect with me. So Levinas email is my LinkedIn handle. And thank you for including that in the show notes. And yes, obviously, there is the book. And the book is available on all major retailers. And our there's Amazon, Barnes and Noble and others. And their title is mastering executive transitions. So probably these are the two best starting points to start to connect with me and engage with me.

Wendy Hanson  33:22  

That's great. Well, thank you so much for taking the time to be with us today. And sharing this important piece about transition at that senior level and are the statistics are a little scary, but when 40% Don't make it, and there's a lot we can do to be able to help people make it and think about this very carefully. So thank you NaVi for being with me today. Listeners, take care. Have a wonderful day and think clearly about your legacy. Talk to you soon.