Leaders in transition: why coaching is critical for their success

When Jonathan[1] moved from Sydney to Hong Kong for a role as head of Hong Kong and China, his wife and three children moved with him. It was an exciting time – a fresh challenge in a new country and a big change in lifestyle for the whole family.

Unfortunately, that excitement started to fade once the reality of the job set in: Jonathan’s team was spread over Hong Kong, Shanghai, and Guangzhou, which meant he was on the road two weeks out of four. He would arrive home on a Friday night too exhausted to enjoy spending time with his family and would use the weekend to catch up on admin he hadn’t been able to do in the week. He had no time for exercise and his health suffered.

To make matters worse, Jonathan’s open style of management, which had served him well in Australia, simply didn’t work in China. He also struggled with the transition from being a technical specialist to a people manager – his detailed style of working made it difficult for him to delegate and let go. Work piled up and things eventually got so bad that his senior team in Shanghai left the company without explaining why. Jonathan’s dream of success in an important role in a new market was over – at great personal cost to him and his family - and at a huge price to his employer.

Change brings risk as well as opportunity

Jonathan’s story is not unusual. Receiving a promotion and taking on a new role – perhaps as the leader of a team, a department or an entire organisation - can be one of the highlights of an executive’s career. However, while moving to a new organisation, industry or location can be a great opportunity, there are always risks involved for the individual and their employer. And research tells us that the more elements of change are involved, the higher the risk of failure.

In Hong Kong, where I lived for 17 years, there is a large contingent of expatriate leaders who arrive full of hope, often with families in tow, to experience a new life in an exciting environment. Whether or not they make a successful transition is often determined by their employer’s commitment and support as they adapt to the additional challenges of living and managing in a new culture and environment, as much as their own ability and commitment to the role.

The high price of failure

Studies show that the failure rate for expatriate leaders is between 25 and 50 per cent.[2] Internal hires typically fail at a rate of 20-30 per cent. This rises to 50% when international expatriate assignments are included. The cost of this is enormous, particularly for the individual and his or her family, who are often unceremoniously repatriated.  A worrying 50 per cent of expat marriages end in divorce, accelerated by the stress of international assignments.[3]

There is also a huge cost to the employer organisation. I asked a handful of clients to estimate the cost of a senior leader failing in a new role. Their figures ranged from US$1.5 million to US$2.5 million per executive. This takes into account the direct costs of recruiting, relocating where necessary and loss of revenue from all aspects of the business as a leader transitions in and out taking staff and/or clients with him (or her) plus reduced productivity as a result. Other research shows that for an expatriate leader earning more than US$250,000 the cost of a failed assignment can be up to 40 times base salary.[4] This amounts to an alarming US$10 million.

8 significant stressors for executives in transition

Jonathan’s case may sound extreme, but the IECL sees plenty of executives who are new to a role and need support transitioning smoothly into a new environment. We work with hundreds of leaders in transition each year around the region and our coaches have identified eight major causes of stress, which may ultimately contribute to failure:

1. Having direct reports or a team to manage, but poor leadership skills.
2. Lack of confidence or feelings of unworthiness in the role (imposter syndrome).
3. An unsupportive manager and/or leader without people skills who doesn’t help set up the new executive for success.
4. Limited understanding of the organisation’s vision, purpose and culture and how this links to the role and deliverables.
5. Lack of clarity on goals – e.g. what success looks like – and what the pitfalls are to avoid.
6. Uncertainty about how to influence and communicate with colleagues and who to go to for advice without being judged.
7. Lack of time management skills. Leaders in transition may need to step away from ‘doing’ and learn how to delegate more effectively.
8. Constant pressure. Developing resilience and the ability to deal with the pressure of a 24/7 environment is essential to avoid burning out.

6 ways to ensure the success of new business leaders

In our experience, leaders in transition are most likely to succeed when they have:

1. A comprehensive onboarding and orientation process to introduce them to the organisation’s culture, values and leadership frameworks.
2. Clarity on what success looks like in the first 90 days plus a clearly articulated plan of who will help enable this success.
3. A strong and supportive manager who will check in regularly and provide timely and constructive feedback.
4. An internal mentor (or series of mentors) to provide guidance on key aspects of the role, the organisation and the cultural environment.
5. Organisational coaches (internal or external) who understand the organisation’s objectives and can help the executive align their priorities with the role.
6. Support when the transition involves relocating to a new country and/or working/living environment. It’s essential that the executive and his or her family understand what to expect from the culture, lifestyle and work demands. Where a spouse is involved, ongoing support is a wise investment for the first few months.

Great leadership is the key to organisational success, so every company, no matter how large or small, needs to invest in developing leaders to help it navigate the challenges ahead. Coaching is one of the most effective ways of developing leadership skills and increases the chances of success in a role. Organisations who don’t yet have coaching programmes in place for their leaders in transition should consider the high cost of failure in this area – as well as the exponential value of success.

About the author: Julie Parkinson is Director and Head of Asia for the Institute of Executive Coaching and Leadership. Contact her at [email protected]