How to make your due diligence before accepting your next position?
The so called romancing phase in an executive recruitment process is in fact the first of three executive onboarding phases designed to accelerate your transition into your next executive position and covers the period from when the first dialog between the executive and the company/recruiter has commenced, until a formal agreement between the executive and the company has been made. The three executive onboarding phases include:
The romancing phase – or pre-selection phase - where the principal (i.e., the future leader of the onboarding candidate) and the onboarding executive each individually, and sometimes in close collaboration, evaluate the inherent risks and opportunities in transitioning the candidate into the new position. This phase commences when the initial dialog between the involved parties (principal/company/recruiter and candidate) has taken place and ends when a formal agreement between them has been made/conducted.
The pre-entry phase or engagement phase is where the candidate—often in close collaboration with the principal—is preparing himself/herself for the new role by building insights, developing a 90-days transition plan and taking actions with the objective of making the candidate decision-making competent as soon as possible upon entering the new role. This phase commences when a formal agreement has been made/settled and ends when the candidate starts his/her new role.
The entry phase or marriage phase is where the candidate—in close alignment with the principal/company—is executing on the abovementioned 90-day transition plan. This phase commences when the candidate starts his/her new role and ends when the first 90 days have passed.
So, going back to the romancing phase—how can you efficiently navigate through this phase?
The romancing phase requires the executive to diligently uncover the inherent risks and opportunities related to transitioning into the new position. In our experience, the failure rate of executives can be significantly reduced if the due diligence process undertaken by all parties—not least by the executive—is done in the same meticulous manner as one would expect to undertake when deciding for a substantial high-risk investment. Particularly, the executive is likely to become extremely vulnerable if he/she has been part of a failed/unsuccessful recruitment since, for the remainder of his/her professional life, he/she will need to explain and answer to the reasons, premises and details that prompted the failed recruitment.
As a recruiter, we often see particularly male candidates moving into a “hunters mode” much too soon once the first genuine interest from the candidate has been sparked. While it can be compared to the image of a hunter tracking his prey and being within shooting range, such a scenario should be handled with great care since a wrong step may potentially scare off the prey. It is at this juncture that the hunter must make his detailed assessment—his due diligence—and not get carried away and take the first shot possible. Rather than risking taking a shot that may end up only wounding the animal, the hunter must keep calm, and assess the terrain, distance, conditions and suitability before deciding to take or not take a shot. Keeping one’s cool in the midst of the excitement is critical, as a candidate’s chance of a successful recruitment is based on thorough due diligence.
Inspired by Bradt et al. in their book, The New Leaders 100-Day Action Plan, the risks and opportunities related to the transition are now addressed—here classified into three categories:
organizational risks and opportunities;
role risks and opportunities; and
personal risks and opportunities.
For the remainder of the article, I will focus on the organizational risks and opportunities.
Often, companies are not true representations of what is publically portrayed to the outside world. In fact, many companies lack the ability or will to enact their defined vision, mission and values, often leaving executives who have not performed the necessary in-depth due diligence both frustrated and disappointed once they discover their actually enacted vision, mission and values. Unfortunately, the very same executives, when caught up in the everyday hectic life in a new role, tend to forget to adequately communicate the vision, mission and values to the organization and to help their own management team do it to their employees.
Therefore, a candidate should consider the following elements in relation to organizational risks and opportunities during the romancing phase.
Risks and opportunities with the 6 Cs:
customers: risks, opportunities and relationships in relation to the customer base (e.g., key customers [80/20 rule], distributors, dealers, end-users, consumers and key opinion leaders);
collaborators: risks, opportunities and relationships in relation to key collaborators (e.g., industry organizations, suppliers, allies and government/regulators/community stakeholders);
competitors: risks, opportunities and relationships in relation to the competitor base, including their bargaining power and competitiveness;
industry competitors (intensity of competitive rivalry);
suppliers (bargaining power of suppliers);
buyers (bargaining power of the customer base);
new entrants (threat of entrance of new competitors);
substitutes (threat of substitute products, services or channels);
capabilities: risks and opportunities in relation to the capability base (e.g., professional and leadership competencies within the organization, structures, systems, processes, financial, technical and brand equity);
conditions: risks and opportunities in relation to the macro environment (e.g., political / government/ regulatory, economic, social / demographic and technological);
capital: risks and opportunities in relation to the financial situation and prospects of the company. How solid is the investor base? What is the debt/equity ratio? How skilled is the company at generating earnings before interest tax depreciation and appreciation (EBITDA)?
The key to performing a proper due diligence process is based on the ability to separate manageable risk from the high-probability-of-failure risk while identifying opportunities that may present new growth platforms. A candidate’s ability to succeed in a new role rests on his/her ability to sense and seize relevant opportunities while possessing the necessary authority and resources to resolve or mitigate the identified risks.
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