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4 Watch-outs for Internal Promotions

Key watch-outs for Internal Promotions and leadership success

I firmly believe that internal promotions to leadership positions have far less risk than external hires. A newly promoted leader knows the culture and has succeeded in it well enough to deserve a step up. They know the market and the company’s assets and weaknesses. They have well established relationships to leverage. Even if they face a learning curve, it is minor versus a comparably competent executive coming in from outside the company.

But there are lots of things that can go wrong for the newly promoted leader. Here are four “watch-outs” that can help avoid missteps in the new role.
  • 1. You do the same work you did before the promotion.
    There is a reason you got the promotion beyond that you were doing a good job, even if you’ve been promoted in place. There are plenty of people doing good work who would be disasters at the next step up. The organization determined that you are ready to handle greater responsibility, more senior relationships, broader scope and the stress that comes with it.

    If your promotion makes you a member of the executive team now, your scope is not limited to your function. Inclusion on the executive team carries team responsibilities with it. You represent your function, but you are expected to have a voice in how the business is managed and how the organizational culture evolves.

    Get clear what your boss sees as their expectations of your new role. A CEO might only have broad notions about how things will change, but they have some direction to give. It may be that your promotion represents a strategic emphasis on your function that was not there before. Perhaps you are expected to provide continuity after a retirement or create a spark that was missing from a terminated predecessor. If no strategy is articulated, conduct your own STaRS evaluation. Is the business in start-up, turn-around, realignment or sustaining mode? How does this inform how you will lead?

    Your promotion is a vote of confidence in your ability to do a bigger job. But you and the organization are susceptible to blind spots , if you continue to run in the same groove as before. Question current practices, even if they are what got you promoted. What is holding the organization back? What outside practices are even better than the good things you are doing now? This openness to explore other ways of doing business can start off small and continue incrementally. After all, if a radical redesign were desired, the company would probably have hired from the outside.

    Develop a vision for your role and share it with your peers and your team. This need not be done on Day One. Even somebody with your experience on the business will need to take stock and learn from new constituents, before announcing strategic direction.
  • 2. You expect the supportive relationships you’ve had with other functional heads will not change.
    This is one of the more difficult things to get used to. Other members of the executive team will be happy for you and may welcome you into the fold, but they have their own turf to protect, and they are more practiced at senior in-fighting than you are. This change in relationship may be most pronounced between you and a person who viewed you as a mentee/protégé. Now you are a peer, and sometimes a competitor or rival. It’s time to find a coach or mentor from outside the organization.

    New leaders are often surprised to learn of the level of conflict and dysfunction in the executive team. Exec teams that operate under cabinet responsibility will very infrequently let the organization see anything besides consensus. But the team is comprised of strong-willed people with deeply held convictions and healthy egos. Sure, there is collaboration and generally a presumption of positive intent. But organizational leadership is a full-contact sport.

    Be ready for conflict where it did not exist before. In fact, your boss will expect you to initiate some conflict, to take a contrary view and to push back on a colleague who is impeding your path to success. Handled well, this can have positive outcomes for everybody. Fight, respectfully, for what you believe in. Give your team air cover; you represent them, and their output is a reflection on you. I have seen leaders lose the respect of their peers by being too transparent on the faults of their own team.
  • 3. You don’t recognize the fundamental change in dynamics between you and those on your team.
    You used to be viewed as a captain on the team. You‘ve been admired, loved and considered “one of us.” You’ve socialized together with these colleagues for years. They all applauded your promotion. And then it struck them. You’re not the captain anymore. You are the boss.

    The power equilibrium of your team has been disrupted. How they appear to leadership is now through your lens. You and have direct control over their livelihood. They are on their guard. They hope the move to leadership does not change who you are. Because you are home grown, they hope that any changes will be in a direction they can anticipate.

    It is a mistake to believe or pretend that nothing has changed, at least in the workplace. Leadership can be lonely. You will distance yourself from long-established relationships to ensure necessary objectivity. If you don’t do this, it will happen to you, because people don’t treat a coach the same way they do a captain.

    If you were selected over a colleague who had reason to believe they had a shot for that position, you need to address it straight on. Give this person the respect they deserve. Recruit them to be a major player in your plans. Consider how they can have ownership for a given scope of responsibility, a “consolation prize” of sorts. Keep your radar up for any indications that they cannot get on board with your agenda, either in initial conversations or subsequent weeks or months. You cannot afford for this person to become disruptive to your efforts. If this happens, talk to them about what you see and how you can support them achieving their goals inside or outside the organization.
  • 4. Your behavior doesn’t reflect people paying closer attention to what you do and say.Middle managers like you and rooted for your promotion. You are one of the company’s success stories. You were once one of the guys. Now you have become a role model. Remember when you and colleagues gossiped about the executive team? Those same colleagues are gossiping about you.

    Some will continue to pull for you, because they see their own future in your success. Others will wonder, “Why not me?” and become skeptics. Whether they remain fans or not, they are watching everything you do, listening to everything you say. The frown on your face when you leave a meeting? Noted. The animated discussion over lunch with a fellow executive off-site? A subject of conversation.

    You have to get used to being in the public eye. And you have to exhibit social awareness, on top of self-awareness. Be careful what you promise; you will be judged on how you deliver on your commitments. Resist the temptation to think out loud; this comes off as an exhibition of indecisiveness. In publicly traded companies, you are now an insider. Speculation on or discussion of future moves that the public does not know about is verboten. These governors on behavior might appear to get in the way of authenticity, but it doesn’t take long to get into a groove and be yourself.
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Onboarding leaders asking key corporate culture questions

Executive Springboard helps new leaders with their onboarding, so they can quickly make an impact and sustain that impact long-term. Helping an executive succeed can involve providing guidance on the functional issues they face. Equally important is helping them navigate the relationships and culture they encounter.

A few weeks ago, I asked for readers’ opinions on the most important questions that can be asked to understand a corporate culture. It took a little while to work through the flood of responses that I received, still longer to organize them in a coherent manner. I found eight themes emerging, with a fair amount of overlap among them.
  • 1. General culture description
    Ask a number of people in an organization to describe the corporate culture. Allow them to address this open-ended question however they see fit. Consider the patterns in the responses. What elements mentioned repeatedly? Is the description consistent? Is there a difference between the reality of the culture and how they would ideally see it?

    Getting more granular, how is culture taught? Is it part of any corporate onboarding program? Is there corporate folklore that tell stories of the organization’s heroes and their achievements? How do their accomplishments match up with the company’s values?
  • 2. Behavioral norms
    Consider the behavior of the CEO and how it acts as a model for the organization. Does the CEO interact daily with people “down the line,” for example, with customer service reps or administrative assistants? Does the CEO know anything personal about these people, beyond their role in the company? How much is the CEO seen or heard? Do they stay in headquarters, or are they often seen in branches, plants or customers’ offices?

    How much does the organization expect people to collaborate? Does the employee base frequently see leaders interacting, or do they just manage their own spheres of influence?

    Is the organization one where everybody feels like they have skin in the game, or do leaders micro-manage employees? It was felt that bosses’ overreach at the expense of employee autonomy can diminish morale and kill creativity.

    What happens when strong performance comes at the expense of corporate values?

    How are exceptions to the rules tolerated? Are policies and procedures standardized and enforced? Would behavior that is unacceptable for the finance function be allowed among the sales team?

    Are there any taboos… dress code, work hours, working from home, etc.? Are there expectations about behavior that extend beyond the workplace (e.g., social media use, personal habits?)
  • 3. Performance
    What is the performance review process? Is it formal or informal? Frequent, annual or irregular? Do you force a “grading curve,” or do you allow all to be strong performers with areas for growth (In Minnesota, we call this The Prairie Home Companion Curve, where everybody is above average!)

    How do you react to major and minor mistakes? Are there disciplinary consequences? How does this impact employees’ willingness to give bad news and own up to their responsibility? Does the organization forgive and move on? Are there ways of gaining institutional learning from mistakes?

    How does the company recognize, reward or celebrate success? What is measured and how are successes rewarded? Are the metrics long- or short-term? Is there a focus on revenue, profit, customer retention, cost savings or other factors? Is there consistency in what is measured, or might strong performance that was rewarded last year be ignored this year?

    How often are the successes that are acknowledged individual rather than collective? In other words, does the culture allow people to be singled out for their achievements?
  • 4. Power
    Where does the power reside? Within the C-suite, are all people equal, or is there an inner circle? If power at the top is unevenly distributed, is this reflected more broadly throughout the organization? Is this a result of personality, tenure, competence or a strategic consideration?

    Who owns the P&L? Does control of the P&L impact how influence works? Is this simple or matrixed?

    How is power most often used by those with power towards those without? Is it enabling? Abusive?

    How does the organization’s immune system manifest itself? In the face of somebody who might be challenging the status quo, what are the common forms of resistance?
  • 5. Diversity and Inclusion
    Does the organization reflect diversity, or is it a “good boy network?”

    Can you demonstrate times when you have engaged in opportunities to promote diversity and inclusion of people or thought leadership? Does the employee base resemble the customer base? What challenges, if any, does the company face in making employees feel included? As Professor Michael Gaffley of Nova Southeastern University recently told me, “Diversity is about counting numbers. Inclusion is about making numbers count.”

    How does the company encourage mixing of different people, perspectives and experience? How does leadership learn from younger employees about new trends in the marketplace? How does the institutional knowledge of long-tenured employees be memorialized when they retire?

    How do you walk the tightrope of encouraging different ways of thinking while benefiting from behavior that conforms to a set of agreed-upon values?
  • 6. Decision-making and communication
    How are decisions made? How much will senior leadership delegate? What are signoff levels? Does a plan cascade down or is it built bottom-up? How inclusive is the process for capex, product development and annual budget-setting?

    Under what situations will the company invest time and money to develop evidence-based decisions?

    When decisions are made, how are the communicated?

    Does the company run on PowerPoint? Xcel? Email? Conversation? Does technology allow remote employees to be vital parts of decision-making?

    If a manager represents their team in a proposal that is rejected, how do they report the decision to their team? What responsibility to they have to reflect the consensus of the deciding group?

    How often do employees hear from senior executives? What media are used? What message is given? Would the majority of employees be able to state strategic priorities?
  • 7. Conflict resolution
    What and where are the common areas of conflict? Are these based on unmatched objectives between stakeholders? Incentives that are not aligned? Disagreement on expected outcomes? Politics?

    How do issues get resolved? Is consensus sought? Are they made by decree or through an arbiter? How often does resolution result in a “win-win” situation? In one side backing down, in face of evidence it had not considered before? In one side backing down for reasons that were not data-driven? What is an example of a conflict faced within a department? Of a conflict between two functions or business units? How were these resolved?

    How much of the CEO’s job is deciding between two opposing viewpoints that cannot be resolved by themselves?
  • 8. Vision and Mission
    What does the company want to be known for in 3-5 years? What terms define that vision? Are they financial? In customer terms? Employee-focused? Shareholders? Other stakeholder groups?

    Where did the vision come from? Who developed it and through what process?

    Why does the company exist? What is its mission? What motivates people to come to work in the morning? How well does it relate to the whole business? Are there large parts of the company that seem to be out of scope, and how are they managed?

    How well is the vision and mission internalized by employees? Can they tell you what the vision and mission of the company are? Do they find them compelling and achievable? Are they committed to accomplish them?

    My initial intention was to provide a tight set of questions to get at the essence of a company’s culture. That’s what we try to do in a short conversation with corporate leadership prior to a mentoring engagement. But I was impressed with the passion and insights provided by dozens of responses. You had a lot to say about what’s important to capture in corporate culture. This become a sprawling exercise that fleshed out a very squishy topic. Thanks for sharing your wisdom!
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Common reorganizations mistakes leaders make during organizational change

BCG Survey on Reorganization Success Rates

An executive’s skills come to the fore in a reorganization. While they may take on new responsibilities themselves, they face critical needs for leadership from those they serve.

Boston Consulting Group surveyed 1600 executives from 35 countries, reflecting on reorganizations their companies enacted. Only forty-eight percent deemed their companies successful in their reorganization efforts. Here is a link to their findings and recommendations:

BCG SURVEY RESULTS

Why Reorganizations Often Fail

I have worked in corporations that had write-offs for reorganizations almost every year. Investors looked at my company as if it were Bullwinkle trying again to pull a rabbit out of his hat: “This time for sure!”They were not buying it. Instead of the bump in stock price often associated with the announcement of a reorganization, the downward spiral would accelerate.

As I researched the determinants of success or failure in reorganizations, it was clear that the focus has been on the front end rather than what happens when the reality of the change sets in.Maybe this is appropriate, and my research is far less extensive than BCG’s, but I want to suggest 5 mistakes that companies and leaders routinely make in execution that can lead to failed reorganizations.

1. The Focus Is on the “What” Rather Than the “How”

OK, this is not a specific feature of execution, but an overall statement of where attention is placed. Over 90% of the literature on reorganizations will be on conceptualizing the change.

And a main takeaway is that it doesn’t start with an org chart. Craig Espelien recently wrote me about “a process that defines and aligns: current state, desired future state and how the work will flow. Once this is done, then an org structure will emerge.” Craig’s right. Structure should follow strategy.

There’s another part to reorganizations that gets little attention. These involve big changes, but the usual components of change management are not always applied. It is like using an award-winning architect and then hiring a discount contractor. Planning is important. Thinking through consequences and getting the plumbing right is vital. I’ll take good execution over great strategy any day.

2. Secrecy Prevents Valuable Input

The urge for secrecy means that the people who know how things get done are not consulted. Why do we keep this secret? Because some people might get hurt by the outcomes, so we revert to behavior we learned in high school about breaking up with a sweetheart. Give out hints that something is amiss, send out a text saying, “It’s over!” and become invisible when they are around.

In this way, leadership feels the least amount of discomfort. Yes, some people inevitably lose their jobs in reorgs. News flash: the people who are told, “It’s over!” are often the lucky ones. They may feel hurt for a little while. But, usually, they receive a severance package. They find employment in a company that doesn’t have the problems that led to your reorganization. They get to choose what they do next, instead of being told what box they will fill.

How much does this hurt? Ask Steve Pearce. In late June of 2018 he was traded by the Toronto Blue Jays for a minor league player, after seeing limited action this year. That may have been a blow to his ego, but how bad is it to be traded to the Red Sox, where he hit 3 home runs in his team’s final two World Series wins, getting a championship ring in the process?

Back to why openness trumps secrecy… What is the harm in telling people that, because of a need for greater efficiency or to prepare for future growth, you need to look at structure and processes?

Share with stakeholders the rationale for a reorganization and solicit input on the details of that desired future state and how to get there. More people will feel like they were part of the process, or at least that they were heard. You will get a better plan, greater alignment and a higher likelihood of a successfully executed integration.

3. The Social Aspect Is Overlooked

This may be the single most underrated factor in determining success or failure of a reorganization. While efficiency is not the main goal of every reorganization, the net result is that some people will lose their jobs and other people will be moved into unfamiliar roles. Consider that those who remain suffer from PTSD. They feel the loss of friends who are no longer with them on a daily basis. And they may feel a lack of competence in their new roles, and that takes a toll on their self-esteem.

One of the key contributors to employee engagement is feeling that you work with your best friend. In reorganizations, these relationships can be sundered. The survivors will not be happy. Some will let you know it. Others will be more passive-aggressive.

It’s OK to acknowledge their hurt and to point out the sacrifices everybody has to make to eventually get to a better place. And it helps to give people some time to find their footing. Nobody in Cubeland is celebrating the day after the reorganization takes place. A big part of the healing, though, comes from people turning their attention to their new work and to the new social connections they need to make for that work to get done. Much of this will happen organically, but it helps to kick-start these new connections through facilitated sessions on any new processes, roles and responsibilities.

A leader’s responsibilities might change as a result of a reorganization. You may have new direct reports and new teams that are uncertain about their relationship with you. It’s important for you to connect with them. Tell them about yourself, what’s important to you and how they fit into the picture. Be authentic; people are on high alert for BS.

4. Endings Are Not Considered

In a poorly planned reorganization, those who remain inherit the work of those who left. Unless consideration was given to the nature of the work post-reorganization, the survivors end up with more work on their plates and no increase in compensation. That’s how you get the numbers to work. However, the change in the employment value equation turns those valuable people you want to keep into flight risks.


Why this oversight? Because nobody gave thought to what work needs to stop in order to create capacity for the fewer people who will be employed. Most companies are notoriously bad at endings, to declare what is no longer a priority or somebody’s responsibility.

If you can let go of things that are not mission critical, you can find a lot of coins in the couch.
Columbia University’s Willie Pieterson and others have defined strategy as the art of sacrifice. Considering what not to do, even ceding business to competitors to focus on where you excel, can be a powerful precursor to any reorganizational design. There are few things more liberating for an organization.

5. Communication Stops After the Announcement

Once the announcement is made, the communication is finished.Do people see evidence that the organization’s leadership supports the change? Is it enough to tell people the objectives of the organization at the time it’s announced, or do you need to reinforce the rationale?


People want to know why things are happening, what will happen and when. They need to know how they are impacted individually. They should be reassured of what will not change, like the corporate mission and values. And success will come when they are inspired to get behind the change.


If there ever were a time to manage by walking around, it’s when your people are trying to figure out their new reality. Corporate communications are important; personal communications equally so. There is no such thing as overcommunications at this critical stage.


Remember that communications are two-way. Stop talking long enough to listen. How do employees view the reorganization being executed? If problems surface, they can be addressed by providing additional attention, training or resources. Mid-course corrections are common, and the solutions are usually found in the people on the front line.

Conclusion: Leadership Execution Determines Reorganization Success

To close, as a leader in an organization, you may be closely involved in the development of a reorganization plan. For that reorganization to have a chance of succeeding, you have to be just as involved and even more visible in the hard work of implementation.

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FREQUENTLY ASKED QUESTIONS

Most reorganizations fail due to poor execution, lack of communication, secrecy, and ignoring employee impact during the transition. with the team.

Focusing on the “what” instead of the “how” is the biggest mistake, as execution determines the actual success of the plan..

Communication is critical. Continuous, transparent communication helps employees understand changes and stay aligned with goals.

Leaders can improve success by involving employees, addressing social impacts, managing workloads, and maintaining open communication.

Executive mentoring helping new leaders

The Chance of a Failed Hire Is a Coin Flip

Heidrick & Struggles conducted a study of 20,000 senior executive placements and found that 40% failed within 18 months. A failure meant the executive left, was asked to leave or was performing significantly below expectations.
This is not a “one-off.” In a Leadership IQ study with another 20,000 placements, the failure rate was 46%. The Corporate Leadership Council puts the failure rate at nearly 50%. The Harvard Business Review gave a range of failures on new management hires between 40-60%. Finally, the Center for Creative Leadership estimates a failure rate of 40% for new CEOs. Consistently, the chance of a new hire failure is close to even money. And the numbers are not appreciably better if that new hire comes from an internal promotion versus an outside placement.

The True Cost of a Failed Executive Hire

Want more bad news? Consider the costs associated with a failed hire. Hiring costs, compensation while on the job, investment in the executive, severance and a new search can easily get you to 3 times salary. Add departures from disgruntled staff, lost sales, damaged customer relationships, etc., and a failed hire can cost 6 times salary or more. A bad CEO hire in a start-up can doom a world-changing idea.

Why It’s Not the Search Firm’s Fault

A perfect match doesn’t guarantee a good marriage; you must work at it. A headhunter will find the candidate who checks off all the boxes and delivers on the intangibles. But the difference between success and failure is all with the exec and the company. Here are a few “watch outs” for companies to avoid, to improve the chance of success, even before the executive starts.

  • In the recruitment process, don’t sell so hard that expectations won’t match reality. It is tempting to do (and it happens on both sides). But the risk of losing an attractive candidate must be tempered with the risk of losing a promising hire who becomes disillusioned.
  • Don’t describe the role as a “change agent.” Applying this label is akin to handing a bull the keys to the china shop. It invites executive behavior that doesn’t fit the organization. Change will come from any executive. Change that the organization can’t handle is not a good idea.

Consider the message you send when you negotiate an offer. There are limits you cannot exceed, but zero-sum positioning can leave a bad taste in the executive’s mouth when the relationship is just beginning.

Why Executives Fail: Key Reasons

Executives fail for many reasons, but it is seldom a matter of skill. Why do new executives fail? It depends on whom you talk to. The University of North Carolina found that executives point out the following problems:

  • Confusion about role expectations
  • Failure to establish key connections or partnerships
  • Lack of political savvy or support to navigate throughout the organization
  • Ineffective people management and team building
  • Failure to establish cultural fit
  • Lack of internal feedback and coaching

And the Leadership IQ found that organizations see a different set of issues contributing to failed executive hires.

  • Not accepting feedback from those they work with Not understanding their own emotions or those of others
  • Not enough evidence of drive to succeed or excel on the job
  • General personality or temperament issues

The two lists don’t have much in common, which may not be surprising given the different points of view. But neither places the blame for an executive failure on a lack of expertise. The search process manages this very well. It’s the people issues that cause the problem.

A Prescription for Success: The External Mentor

Both the executive and the hiring company have responsibilities to ensure success. The exec should prepare a 90-day plan before starting, yet be ready to jettison all of it Day 1 when the reality of the job hits. He or she should learn where the power lies, who are key influencers and which values really count. And work should start immediately to build bridges in the organization, up, down and across. The company needs to offer a robust on-boarding process (most last for a week or less), provide open avenues of communication and invest in the executive’s integration.

Mentoring is a successful tool for retention and improving performance. A study conducted at Sun Microsystems showed a 72% improvement in retention over a 7-year period when employees had mentors. But mentoring is not effective at senior levels. A mentee must be willing to be vulnerable, and few executives will put themselves in that position with a peer or a potential point of conflict.

The default choice has been to use an executive coach. But, increasingly, external mentors are being hired instead of coaches when the need is not remedial. Author/professor/coach David Clutterbuck offered these critical reasons:

  • Execs want somebody who knows what it feels like to be in a leadership role. Mentors provide this and coaches do not.
  • Mentors can act as ‘sounding boards’ to help execs think through complex strategic decisions. Coaches are seldom equipped to do this.
  • Coaches provide remedial help to solve problems. Mentors develop wisdom and help executives reach their potential.

Peer networks are also effective sounding boards for executives and means to avoid the loneliness of the position. It is easier to establish an intensive cadence with a mentor early on in an executive’s tenure. This is harder to do with peer networks, which require the logistics of putting a group together. A reasonable approach is to start with a mentoring relationship and to move to peer networks when a once-a-month check-in is enough.

Summing Up: How to Improve Executive Success Rates

A new executive joins your company with every hope of making a contribution. And your vetting process ensures that they have all the necessary skills. But over the next year or so, people issues (corporate politics, organizational culture and “immune system,” team development, peer relationships and unmet expectations) crop up to derail even the most talented executive.
Having a mentor who has the scars of their own experiences, who as Carmichael Lynch CEO Marcus Fischer said, “tells you not to step on the rake in front of you” and who keeps the uncertainties and fears of the new executive confidential can be the difference between success and failure.

Schedule a Meeting

FREQUENTLY ASKED QUESTIONS

Studies consistently show that the failure rate of new executive hires ranges between 40% and 60%, making it almost a coin flip. Multiple organizations, including Heidrick & Struggles, Leadership IQ, and Harvard Business Review, report similar findings.

Executive failure is rarely due to lack of technical skills. Instead, it is driven by people-related issues such as poor cultural fit, ineffective team management, lack of political awareness, inability to accept feedback, and failure to build strong internal relationships.

The cost of a failed hire can be substantial typically around three times the executive’s salary when considering hiring, compensation, and severance. When factoring in indirect costs like lost sales, employee turnover, and damaged relationships, it can rise to six times the salary or more.

Companies can improve success rates by setting realistic expectations during hiring, providing strong onboarding processes, encouraging open communication, and supporting executives with external mentors who can guide them through challenges and organizational dynamics.

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