How your board can help the new CEO
Joining a new company or being promoted to the top role internally is often a lonely experience for the CEO. Smart boards of directors plan carefully to support their new CEO by offering independent onboarding coaching services. It's a smart move because it protects your investment in the recruitment and selection process and the significant time required to source, vet, and select the perfect leader.
This article examines a handful of data relating to the impact of high CEO turnover. It is written for corporate leaders and aspiring CEOs.
Westgate's professional services resources are available for C-level onboarding performance optimization especially for the first 18 months.
Westgate offers consultative coaching services to organizations on a short and long-term basis to help the CEO identify, articulate, and communicate their personal brand. Doing so helps to establish consistent messaging of the CEO's unique promise of value to internal and external audiences.
Such audiences include industry regulators, capital markets, suppliers, partners, the media, lobby groups, and other relevant stakeholders.
Internal audiences include the senior management team and employees across the organization who will depend on the new CEO to deliver on the business strategy and maintain positive relationships with customers.
If you’re a CHRO, Nominating Governance Chair, or Board Member
Our C-Suite Optimization Program (CSOP) is a premier onboarding program designed to optimize performance for the CEO when there is an upcoming IPO and the CEO needs to attract investors by communicating the value proposition. With our 25+ years working inside corporations, we understand firsthand the challenges CEOs face during the onboarding period.
When the new CEO is an internal promotion, there are often complexities they face with internal applicants who were not selected. We help the CEO avoid any missteps during the first 90 to 120 days using our 90-plan for CEOs. We also help the CEO navigate the new reporting relationship with the board of directors. The CEO/Board relationship is critically important and our toolkit is very effective at helping CEO optimize their performance.
The struggle for chief executives
The grim statistic that 30% to 50% of new CEOs fail within 18 months of starting the new role is generally not because of CEO incompetence, but the lack of structured onboarding and ongoing support offered to the CEO in the first 12 to 18 months (Harvard Business Review, After the Handshake, Succession doesn’t end when a new CEO is hired, Dan Ciampa, 2016).
The reasons vary, including struggling with a new board relationship or the deep-seated resentment of a member of the senior management team who is overlooked for the CEO promotion; the new CEO must now navigate this tricky new relationship. Winning the trust of the team, the board, and investors is often a steep hill to climb. Organizations that support their new CEO with the appropriate tools will protect their investment by helping the CEO deepen trust and engagement.
The right support can make the difference between a successful onboarding process or an embarrassingly short tenure of a CEO who leaves abruptly because they cannot navigate the new environment. The risk of a premature CEO departure can negatively impact the reputation of the corporation, its board, and shareholders when negative media coverage ensues and stock price plummets.
This can be avoided altogether saving the corporation, the executive, and the executive’s family disruption and heartache.
What is performance optimization coaching?
Performance optimization coaching is used when a new leader is required to make major changes in an organization, such as post-merger integration (for example). The integration of multiple brands post-merger can be a daunting task for the most powerful leader. It is a subset of executive coaching that is project specific. It helps the leader perform optimally and effectively saving valuable time in the process especially when each member of the team is aligned with the CEO. Effective team dynamics is a predictor of success and goes without saying.
How to choose the right resource for your new CEO
Each professional services organization has its own suite of proprietary services and Westgate is no different. It can feel overwhelming to discern what resource or tool should be used for a specific scenario. Sometimes we deploy a multi-modal approach that we refer to as consultative coaching, which is part consulting (problem solving) and part coaching (which is client led and future focused).
We offer a needs assessment for each project we undertake, which reduces your risk. Once the needs assessment is complete, we will determine if (1) we are the best resource for your organization and if not (2) who we can recommend as the best resource for your needs. Quality is a core value at Westgate and we ensure your organization gets the best resources to achieve your goals.
When to choose a coaching resource for your new CEO
The recruiting and selection time period is an appropriate time to plan to onboard your new chief executive. Having resources ready to serve during the first 30 days is ideal. According to Edwin Dorsey’s “The Bear Cave” https://thebearcave.substack.com/, Notable executive departures disclosed in April of 2022 include:
- CEO of Petrobras (NYSE: PBR — $93.3 billion) resigned after one year because of a “new board of directors.” The company has had five different CEOs and four different CFOs in the last five years.
- CEO of Editas Medicine (NASDAQ: EDIT — $1.14 billion) resigned after a little over one year.
- CFO of Enjoy Technology Inc (NASDAQ: ENJY — $372 million) resigned after a little over one year “to pursue other opportunities.” The company has fallen nearly 70% since it merged with a SPAC in October 2021.
- CFO of MaxCyte (NASDAQ: MXCT — $582 million) resigned after one and a half years “to pursue other interests.”
- CFO of Hyzon Motors (NASDAQ: HYZN — $1.18 billion) resigned after one and a half years.
- CFO of Squarespace (NYSE: SQSP — $3.28 billion) “announced her intention to resign in order to pursue opportunities” after two years. The company is down ~50% since its May 2021 IPO.
- CFO of Moderna Inc (NASDAQ: MRNA — $66.7 billion) resigned after two years.
- CFO of Dentsply Sirona (NASDAQ: XRAY — $10.7 billion) resigned after a little under three years “to assume a chief financial officer position at another public company.”
- Teri List-Stoll resigned from the board of Oscar Health (NYSE: OSCR — $1.87 billion) after a little over one year. The company disclosed the resignation “was related to her pursuing another board opportunity.”
Calculating the costs of a fast CEO departure is tricky, but one estimate for a Fortune 100 company CEO departure is calculated at $1 billion (Spencer Stuart, 2016). Although this is an extreme estimation, it illustrates the value of avoiding the cost of turnover to an organization during the succession planning period, which often takes up to five years to identify, select, and groom a new CEO.
Westgate is retained by the board of directors when:
Preparing for an IPO
Recovering from bankruptcy
Appointing an internal CEO
Hiring an external CEO
There is a new Portco CEO
Integrating two companies post-merger
Supporting an interim CEO
Fundraising for philanthropy
Raising media profile
Seeking investors and preparing negotiations
Planning for pre-compensation review (renegotiation of contracts)
There is a significant change in board composition
For aspiring CEOs, C-levels, and business leaders
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For CHROs, private equity funds, and boards of directors
Learn about the C-Suite Optimization Program (CSOP), which is designed to help your new CEO onboard safely and effectively thereby protecting your investment in the new leader. By doing so, you will reinforce your business plans early and help the CEO make the kinds of rapid and decisive moves that help foster success in the long term.
Get in touch
If Westgate can serve as a resource to your board, we’d be happy to explore with you. Drawing on 25 years’ corporate experience and serving organizations in the United States and Canada, Westgate Executive Branding is a 100% independent firm with no affiliations with recruitment or outplacement firms. Schedule a confidential conversation with our Client Success Strategist, Maddison Shears at firstname.lastname@example.org.