This article is written by Francis Goldwyn, Managing Director, Quorum Associates LLC

Think about the last time your company purchased a piece of capital equipment or computer system. Assume the purchase price was between $150,000 and $300,000. Then let’s add in the cost of installation, service contracts, additional hardware and software, and insurance. People will need to be trained on how to use the new equipment or computer. Lastly, there is the cost benefit analysis to monitor the investment against predetermined parameters.

Now think about the last time your companied hired a senior executive. Assume the salary and bonus was between $150,000 and $300,000. Add the direct costs of employee benefits and pension, and a multitude of indirect costs. And these are recurring costs where as the purchase price of the machine or computer is paid once.

When a costly piece of equipment or computer hardware is purchased, measures are taken to ensure correct installation. It is tested and checked to make sure it is working properly before putting it on line. Staff is trained to operate the new equipment and to understand why the company brought it in, but what about the investment in a new executive? Typically, when new executives arrive on the job, they are shown to their office, introduced around the company, meet with human resources, are taken to lunch, and then left to “get on with it.”

It is common for companies to view capital expenditures differently than employee compensation. They feel that senior executives should not need the same care and attention as a large capital investment. The long-term success of a new senior executive is often determined within the first 60 days of employment. First interactions with the rest of the senior management team are critical. Usually the new executive has no knowledge of the history or dynamics of the team. Consequently, these interactions are fraught with danger. In large companies, it can be compared to walking through a mine field, and sometimes new executives do not know they have blown themselves up for six months. If new executives are allowed to self-destruct, the investment becomes worthless. So how can a company protect its investment in a new executive hire?

There are two very effective ways to help ensure the long-term investment in a new senior executive. The first is a strong in-bounding program and the second is coaching. In-bounding is a program that maps out the first 45 – 60 days the new executive is with the company. It is designed to help the new executive integrate into the company quickly and successfully. In-bounding formalizes a process that is often left to the individual hired and to chance. Coaching helps the new executive better understand culture, personalities and style of the new company, and adjust to a new environment.

In-bounding
In-bounding should be a custom-designed program that helps new employees understand the company, the management, their peers and their reports. It should carefully map out everyone this individual needs to meet and what information the executive needs to know in order to have a full understanding of the company. In the beginning, this program would include a detailed schedule for the first two or three weeks with the company. It would provide a brief summary of the background of people to be met, their respective roles in the company, and how and why they and their department will interact with the new executive and his role. Having met the senior management team, the new executive should also meet key direct reports of each senior manager. This will serve to develop an understanding in the company of why the new executive was hired and to help the new executive understand how to get things done in a new company.

In addition to meeting key employees, the new executive should be walked through key business processes. Those senior managers responsible for each key segment or function of the business should personally provide this overview. The new executive should understand how the company goes to market, manufactures or provides its goods or services, develops and designs new products or services, and the relationship with key customers. This will facilitate for the new executive an understanding of key opportunities and challenges that will need to be addressed. It allows the new executive to develop a deeper understanding of the company so he or she can add immediate value.

Coaching
Organizations are organic, behaving like living organisms. Personalities, internal culture, egos and territory are all carefully protected. It is quite easy for a new executive to say or do something that seems completely neutral, but may, in fact, set off red alerts in other senior managers. This is where coaching can be of enormous value. Coaches should be very familiar with the company, but not an “insider.” They need their independence to be respected by the company in order to provide the new executive with an objective and confidential source of advice. The ability to discuss events, conversations, issues and concerns with an objective, well-informed third party can be crucial to the success of the new executive.

The coach can help the new executive understand how other managers react to new ideas, articulate the internal culture and how it work, and lay out potential “mine fields.” Behaviors and attitudes that were encouraged and successful at a former company may not work at the new company. In one recent example, a client, with a deep and complex culture, hired a talented key executive from another company and accepted the advice to also provide coaching. Over the course of three months, the coach was able to help the new executive adjust her own personal and management style to better fit with the culture of the new company. Consequently the executive learned how to raise issues and be heard, and quickly proved to be especially effective. She is considered to be one of the best hires the company has made.

The role of human resources
The role of human resources is important as they should play a critical part in the development of the in-bounding program. Working closely with the hiring manager, they can develop a plan that accelerates the value a new hire brings to the company. Just as importantly, they create the foundation for success and, therefore, help the company protect its investment. They can also provide the coach with important details and background information about the company and the management. Human resources should facilitate open communication and understanding in order to provide the coach with an appreciation of the nuances of the culture and its various management styles. By providing this consultative service, human resources can step into a virtuous cycle with management and strengthen their role as a valuable partner with the business.

In-bounding and coaching are important parts of a larger human capital effort. Some companies recognize that their people are just as valuable, if not more valuable, than their equipment and facilities. The care and feeding of these important assets is very important. These companies at the boardroom level understand the importance of organizational and human capital development. They approach it strategically from the top down and back again.

More and more potential candidates demand to know that a hiring company will commit to their success and development. They recognize the importance of knowing what processes and services a prospective employer has in place to help them grow and develop as professionals and as managers. They want to know how their success will be measured. In-bounding and coaching are two key elements of the successful integration of a new executive into your company. It’s the best insurance you can buy.