The stakes are high when a new senior leader is selected. For the company, the process represents a major investment of time and resources. For the newly hired executive, joining a new organization represents an opportunity to advance their career and professional development. These transitions can be challenging for both parties; and many executives struggle to find their footing and leave the role, even when they are internal appointments.
To dig deeper into the reasons why leaders leave and what can be done to enhance the odds of new leaders sticking, we studied the experience of seven financial services companies and nearly two dozen current and former industry executives who joined or left one of the firms within the previous five years. We analyzed the cultural styles of the companies and the individual styles of executives. We then interviewed executives about their transition and reasons for leaving or staying. We identified some interesting themes.
- At the individual level: Executives were more likely to leave organizations when they felt there were limited opportunities to learn and grow or when their style didn’t align with the organizational culture. The greater the lack of alignment, the more likely the executive was to depart when there was little effort to acknowledge and bridge the gap.
- At the organizational level: Organizations that were more flexible, learning-oriented and open to change were overall more likely to retain executives, even when executives’ styles differed from the culture.
Interviews revealed a link between culture and growth opportunities. At companies with less flexible cultures, executives said they felt constrained and less able to grow and have an impact. One executive explained, “The company was change averse, which made it extremely difficult for me to do my job. I was unable to attain appropriate results because of the company’s unwillingness to adapt.”
Research finds that teams are better off when individuals with unique perspectives and styles are added and able to influence established ways of thinking. Especially when leaders are consciously trying to shift prevailing mindsets and ways of working, bringing on people who don’t fit the mold can help move the organization in the new direction. However, to get the most of these diverse perspectives, companies and individual leaders must take steps to ensure a smooth transition and provide ongoing development opportunities.