Leaving Cultures and Networks

Organizations and individuals often underestimate the difficulty of making the transition from one company to the next. When companies spend a lot of money to make a major hire, they assume that this person will be fully effective from day one. Even though they may grant him a brief period of adjustment—usually no more than three months—they expect their recruited high-performer to provide a fast return on investment. Companies frequently assume as well that because this senior leader has been so successful elsewhere, he’ll pick things up quickly and need little hand-holding before he starts delivering on his promise.

The individual, too, joins a new organization with great confidence that things will work out well. She fully expects that she will be able to match or exceed her earlier performance. She figures that if she works hard and draws on her past experience and expertise, success is a given.

In reality, both the organization and the individual are in for rude awakenings. According to the research of two of our colleagues, Dan Ciampa and Michael Watkins, authors of the seminal book Right From the Start, when people join companies, they immediately lose two resources from their old companies:

There’s a certain point in everyone’s life when you must look at yourself in the mirror and ask, “Am I what I want to be or am I becoming something else that this organization wants me to be?” You have to decide if you are going to sell out to the organization and become what it wants you to be. In that sense, you lose some major parts of yourself. It’s not overnight. It’s like stone that erodes as water washes over it over time and smoothes its sharp edges. I think that’s the process by which some people eventually sell out to the company. Then ten years later, they wake up and they say, “Now I can’t get out. I’ve got kids in college, university; I’m stuck and I can’t get out of this. I’ll just go for early retirement.

Bill George, Former Chairman And CEO, Medtronic

1. An understanding of the culture: They knew how to deal with its unwritten rules and biases in order to get things done.

2. A network: They had established relationships with people who could help them obtain information, ideas, money, and talent to overcome obstacles and achieve objectives.

Establishing these two resources in a new company takes time; without them, even the smartest, most accomplished leaders can flounder.

This problem is exacerbated when executives come from companies with strong cultures. Articles have documented the failures of top executives from General Electric when they leave to join other organizations. Most recently, Wall Street Journal articles have detailed some of the difficulties that former GE senior executive Bob Nardelli has encountered as CEO of Home Depot. According to published reports, he has attempted to impose GE solutions on Home Depot problems, assuming that what worked in the past will work in the present. What he hasn’t anticipated is that the imposition of this style would anger some veteran Home Depot employees. If Nardelli isn’t fully aware of the Home Depot culture and hasn’t established a strong network, this could account for the problems he’s been having.

It’s not surprising that Nardelli has encountered difficulties. In working with many companies, we have observed how many former GE leaders find the passage of joining another company to be challenging. At GE, from the moment they join, employees are steeped in the culture. New hires go through a formal orientation process that indoctrinates them about the company’s values, and the indoctrination process continues in more subtle ways throughout their tenure. Processes, systems, financial controls, audits, and other sophisticated management tools and techniques surrounded them at GE, which doesn’t happen often at other companies.

To make a successful transition, people need to unlearn some of what they know and learn what they don’t know. It’s very difficult to unlearn lessons taught by successful companies such as GE, however. Strong cultures provide rule systems that implicitly govern behavior and decision making. And not just at GE. Successful companies become adept at instilling their norms and values, using everything from formal training to individual mentoring to promotions and terminations. When joining a company, people often undergo a rite of passage that’s akin to joining a tribe.

Although this rite tends to be carried out informally in the United States, in Japan it is a formal process. In Japan, the first day in April is the traditional starting date for new college graduates to begin their careers. At one company we observed, graduates gathered in a conference room, dressed immaculately and similarly. The management team then entered in a grand procession. The chairman of the company welcomed the new hires in a formal address, and each member of the management group arose and passed on a piece of “wisdom” to the rookies. Each of the new people was then summoned by name to the front of the room, and each had to recite an oath of allegiance. We were told this was just the start of a six-month induction process. If this is the process used in most Japanese companies, it’s no wonder that people have intense affiliation with their organizations and rarely change companies.

Although companies in the United States and Europe generally don’t have such a formalized induction process, their orientation still encourages affiliation and identification with the company. The programs and policies that encourage affiliation—from company meetings and parties to rewards and recognitions to morale-building training sessions—bond employees to their employers. Even though they leave for other jobs much more readily than in Japan, they still retain what they’ve been taught. It’s not surprising, therefore, that when people go through this passage and run into resistance from individuals at their new company, they say, “When I was with my old company, this was how we handled X.” Not only does this reliance on past learning prevent them from learning anything new but it annoys fellow employees. Even the highest of high-potentials can get stuck in this passage, learning little that will help them succeed in their new company and grow as a leader.

In looking for companies, you don’t just go to the most prestigious companies. Go to the ones where there is an alignment of your values and focus with the company’s values and purpose. That’s hard to discern in advance but, as I say, you have to work hard at it. Honeywell had good values, but the way it operated you pretty much checked your values at the door. Your feelings and emotions fell on the downside.

Bill George, former chairman and ceo, medtronic