How Does the Double Diamond Framework Save Companies Millions in Transition Costs?

Why Do 40% of New Executives Fail in Their First 18 Months?

Is your company losing money on failed leadership transitions? Discover Navid Nazemian’s “Double Diamond Framework” for executive success. Learn the 7 crucial phases of the transition process—from Discovery to Development—and why the first 90 days are just the beginning of a year-long journey.

Don’t let a poor transition damage your reputation or your bottom line. Read the full summary to master the specific strategies, checklists, and coaching techniques that ensure new executives succeed long after their first 90 days are over.

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Executive transition coach Navid Nazemian explains that leadership transitions often fail because executives in today’s volatile business world face pressure to align their goals quickly with those of their companies. He draws on business classics – such as, for example, Michael D. Watkins’s The First 90 Days — for his coaching model, The Double Diamond Framework. This model outlines seven phases of adapting as a new executive: “Discover, Immerse, Adapt, Mobilize, Operate, Nourish, and Develop.” Nazemian covers research in the field, the value of targeted transition coaching, practical leadership realities, and how firms can support executives as they move up.

Take-Aways

• Poorly managed executive transitions can result in lost revenue and reputation damage.
• Executive transition coaching ensures smooth internal and external promotions and hires.
• A successful transition calls for coaching and interim leadership interventions, plus a handy checklist.
• The “Double Diamond Framework” helps ensure a successful executive transition.
• Conduct research and build rapport in the framework’s Discover and Immerse phases.
• Prepare changes for the organization during the Adapt and Mobilize phases.
• Pursue action and reflection during the Operate, Nourish, and Develop phases.
• Departing executives shouldn’t fall into “freeze mode.”

Summary

Poorly managed executive transitions can result in lost revenue and reputation damage.

Failed executive transition rates are shockingly high – 40% of new or promoted leaders on average. The cost to companies that provide failed executives with a golden parachute can be 10 to 30 times their salaries. In recent decades, new CEOs have struggled with high expectations, because companies stake so much on talent. As of 2018, CEO turnover rates had increased by a remarkable 80%, up from only 9.8% in 2003.

To keep up with accelerating changes in the business world, companies now rearrange their leadership ranks with increasing frequency. In the United States, Fortune 500 companies have 28.7 million employees, representing two-thirds of the economy, with revenues of $13.7 trillion. In the United States alone, there are currently 160 million working professionals; executives make up about three million to 4.8 million of those employees.

Organizations face enormous costs, reputational damage, and loss of workforce morale every time they decide to show a leader out the door. In the wake of such disruption, companies must find and onboard suitable long-term replacements. However, the worldwide talent shortage impedes companies from filling executive roles.

“Today, people almost have a career of transitions rather than a few transitions in their career.” (Michael D. Watkins, author, The First 90 Days)

Corporate leaders know they should do all they can to attract and retain their executives, but they face an uphill climb. And once your company promotes or hires a new leader, how much time should you allocate for his or her transition into an executive role? Estimates range from four to eighteen months. While popular in general discussion, 90-day transition timelines are not sufficient for someone at the top of an organization; that usually takes a year to a year-and-a-half. New executives need time to adapt to their company’s culture and put its goals into action.

Executive transition coaching ensures smooth internal and external promotions and hires.

New executives must engage their organizations’ stakeholders, who include (but aren’t limited to) line managers, peers, direct reports, stockholders, suppliers, and internal and external influencers. The pressure to please such a widespread, diverse audience can cause early burnout and imperil a sound executive transition.

“The executive in transition needs to quickly find out about the team members’ capabilites, behaviors, motivation, and mindset.”

Executives moving up to a higher leadership position can benefit from working with a transition coach. The best executive coaches help companies engage with and support their leaders at all levels, including direct and line managers. Executive transition coaches abet a person’s “vertical development.” Coaches can help newly hired or newly promoted executives learn and use more sophisticated, complex thinking processes. This prepares them for leadership challenges, such as holding many perspectives simultaneously and responding nimbly in uncertain situations.

A successful transition calls for coaching and interim leadership interventions, plus a handy checklist.

Leaders in transition benefit from executive coaching because most need assistance in honing their soft skills to do a better job of managing people, politics, and organizational cultures. Effective coaches identify problems and facilitate strategic solutions. Their tools include:

• Verified assessments.
• A process for executive assimilation.
• Stakeholder engagement plans.
• Executive elevator pitches.
• Preparations for crucial conversations.

Interim leaders can provide a short-term solution when a company has urgent leadership needs. Such leaders can conquer the challenges of incremental transitions by building relationships and amassing information. However, do not use the instrument of interim management to fill leadership gaps.

“The best organizations truly understand the ripple effects (both positive and negative) and orchestrate a structured and externally supported executive transition process.”

McKinsey, the strategy and management consultancy, developed a CEO transition checklist that lists a roster of executive goals:

• Seeing problems from a stakeholder perspective.
• Establishing a time frame and outcomes.
• Developing a priority list and sharing it with stakeholders.
• Managing a personal agenda.
• Selecting a team with intentionality.
• Building relationships with the board and the chair.
• Creating a robust office infrastructure.
• Assembling a coherent communications strategy.
• Implementing a mechanism for feedback.
• Exercising “personal ground rules.”

You want leaders in place who can execute action plans, establish long-term direction, and create a lasting upgrade in organizational capacity.

The Double Diamond Framework helps ensure a successful executive transition.

The Double Diamond Framework assembles and organizes the components of the executive transition process, which unfolds in two states – divergence and convergence – and seven phases (Discover, Immerse, Adapt, Mobilize, Operate, Nourish, and Develop).

In the divergence state, leaders can be experimental and explorative. But, when they reach the convergence state, they must simplify and translate their discoveries into action plans. An executive’s first 90 days on the job is an acceptable time frame for divergence, but after that initial three months, he or she should demonstrate an actionable agenda.

“The executive in transition must…build up and optimize the levels of intent, focus, and energy to endure and, some would say, survive and thrive.”

The Double Diamond Framework for executive transition is modular and not fixed in time. Certain phases may overlap, and its success is up to you. Each of the seven components relies on an executive’s individual effort guided by a transition coach.

Conduct research and build rapport in the framework’s Discover and Immerse phases.

In the Discover phase, leaders review their organization’s structure, collect data on performance, review annual reports and strategic direction documents, and study the relevant capital markets – as well as employee engagement data, talent profiles, and performance. Before beginning their job, leaders must become acquainted with their new company’s shareholder structure and its culture and leadership style. In addition to reviewing documents, incoming leaders should connect with their direct reports, the human resources department, and other stakeholders.

Tina St. Leger, chief human resources officer (CHRO) of GW Pharmaceuticals, explains that you cannot gather too much information. During her transition, she took notes, because some subjects kept recurring in her exploratory discussions. Executives should never presume they know everything, regardless of their expertise or status in their profession.

“I was never worried about asking too many questions beforehand. Presentations, briefings, and anything I could get hold of, any data …helped to start to shape my understanding of the organization.” (Tina St. Leger)

The Immerse phase usually takes up the first 90 or 120 days, though the overall transition takes much longer. During this time of accelerated learning, transitioning leaders come to understand the organization’s customers, suppliers, products, and systems more clearly. They establish trust and identify their own priorities. For Kathyrn Pritchard, CHRO at Nord Anglia Education, the most important agenda item was to understand her board’s priorities so she could determine how to implement their intentions.

Prepare changes for the organization during the Adapt and Mobilize phases.

With facts in hand, new leaders can orient themselves with their executive peers, including members of the board, and assess the leadership team that reports to them. This process can take three months or longer and should involve a coach and an HR leader. During this time, a new executive may carefully begin making certain personnel changes and renegotiating with pivotal stakeholders. This is also a time for identifying practices and initiatives that neither work nor make sense and for coordinating improvements with line managers. New leaders must be mindful of social and political cues during this sensitive time to avoid making impulsive changes or, conversely, avoiding change altogether.

“Make an informed decision on what you would like to be known for, what should change, and what should stay the same.”

“Mobilizing,” or taking action based on the Discovery, Immerse, and Adapt phases, is not without risks. No matter how educated new leaders may become about an organization’s practices, they must create a compelling, fresh narrative and solicit buy-in for major changes.

For example, when she participated in a panel by the management and leadership consulting firm Russell Reynolds Associates, Kathryn Pritchard said she was pleased when another CHRO joined its board as chairman, because they shared attitudes toward change. “He’s passionate about both [the talent and the leadership agenda], and he started talking about those quite early,” she explained. A new leader must find the company’s early adopters of change, and must learn who is going to be skeptical and oppose change – and then proceed accordingly.

Building trust during the Adapt and Mobilize phases serves new leaders when they must convert strategy to action.

Pursue action and reflection during the Operate, Nourish, and Develop phases.

When a leadership team meets, its members should be clear about their organization’s direction, deliverables, and support mechanisms. Depending on the company’s structure, sometimes a team of middle-to-high-ranking executives can make final decisions. Other times, they require the CEO’s input. The challenges new executives should embrace during the Operate phase include:

• Aligning their function with organizational strategy.
• Learning from their previous executive roles what is relevant in their new environment.
• Developing an engaging call for improvement and soliciting buy-in from stakeholders.
• Using feedback from team members and assessing if they need additional support to succeed.
• Checking in with stakeholders to ensure their priorities align with the corporation’s direction and goals.

The Nourish phase is when new executives become aspirational and invite people in the organization to consider the future. Leaders should demonstrate that the changes they first instigated have proven to be correct and necessary. They must show that while they can’t do everything at once, their new work practices are effective and scalable.

“It’s rare to find a CEO that’s transitioning into a private equity portfolio company where they don’t need to effect some sort of change. There’s always going to be a change agenda, and that often requires a reshaping of the culture.” (Sean Dineen, Russell Reynolds Associates)

During the Develop phase, leaders take stock and internalize what they have learned. They seek continuous ways to improve. This phase is the most demanding, and yet many new executives skip it because they face overwhelming time demands at the operational level. Failing to reflect on the transition process is foolhardy.

Departing executives shouldn’t fall into “freeze mode.”

Analyses of online searches reveal that far more people search for “Making the most of your first 90 days” than “Making the most of your last 90 days.” Perhaps this happens because outgoing leaders may believe they’re no longer relevant. The way people make their transition out of a company matters almost as much as how they transition into it. Organizations can’t risk reputational or bottom-line losses by making matters worse for a lame-duck executive.

“With some executives, during their last 90 days, other members of the organization have already started to ignore them or stopped talking about them or stopped inviting them to critical meetings. (Anton Fishman, coach) ”

Companies may let executives go but retain them temporarily in their current roles for six months to a year. These executives tend to adopt a neutral position or to “freeze” in place and refrain from making big decisions.While they may not want to step on their successor’s toes, they should assess which decisions they still have to make. Questions they might ask as they contemplate the company’s future without them include:

• If I had three more years in this role, what decisions would I make?
• Would it benefit my successor if I let unpopular team members go?
• Do we have enough operational excellence to keep functioning well during the transition?
• What advice would I give to the person I was when I first assumed this role?
• How can I show respect to my successor to help ensure a smooth transition?

Outgoing executives can continue to turn to the Double Diamond Framework for structure by skipping the Discover, Immerse, and Adapt stages. Their future reputation depends on being cooperative as they prepare to leave – since a bad transition could undermine a departing leader’s brand reputation and future trajectory and a good one can only enhance it.

About the Author

Navid Nazemian is a former HR executive and an executive coach with 26 years of experience working for Fortune 500 companies. In 2022, HR Magazine recognized him as HR’s Most Influential Practitioner, and CEO Today named him Coach of the Year in 2022 and 2023.