Executive transitions and real costs

It seems so simple, but so many people miss it....

We've had occasion to assist with several senior executive transitions for clients. The CEO/ED resigns (or is fired), and we're asked to assist with identifying an interim CEO/ED and/or recruiting a new CEO/ED.

We aren't an executive recruitment firm, but we do have a senior partner who is both an LPC and an SPHR. This, coupled with the relative lack of recruiting firms with nonprofit sector expertise, makes us a resource for nonprofits in transition.

The costs of the transition process are usually expressed in terms of dollars spent on severance pay, advertising for the new person, the costs of the interim exec, and, sometimes, even the costs of a good consultant to assist in the process.

The problem with this assessment is that the real costs should be expressed in terms of lost productivity and lost opportunities, both before the departure of the first executive and after the arrival of the new executive. Viewed in this light, the "hard dollar" costs of executive transition pale in comparison.

What to do? First, don't get too used to the "comfortable problem" executive. If the issue is addressed early, perhaps executive coaching can help the individual become more productive and happier. This may mean having a better employee, or it may mean knowing sooner rather than later than a change needs to be made. Earlier intervention, regardless of the outcome, is less expensive than living with the "comfortable problem."

If coaching doesn't work, or if it's too late for coaching, make the tough choice and free the executive to seek other opportunities. Worrying about severance pay, advertising costs, recruiter fees, etc., distracts from the mission-focused attention to true value or return on investment (ROI).