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Editor's note: This is the second of a two-part series.

Once again the perception/productivity paradox is at work. The new executive assumes a maximum vote of confidence at the very moment that his or her mandate is beginning to be withdrawn. However, it should be noted that the perception/productivity optimum point usually occurs at some point within this stage because it is within the growth stage that perception and productivity intersect, if only for a moment.Stage III - MATURITY: The maturity stage commonly consists of an added degree of concern, worry or misunderstanding on the part of the employer, accompanied by growing frustration, loss of effectiveness, defensive posturing and inconsistency of administration on the part of the senior executive.

In the maturity stage, too little authority is granted relative to the actual capability of the senior executive. Often, sufficient contact between executive and employer is curtailed as a consequence of the paradox, which exacerbates deterioration of the relationship.

This stage is titled "Maturity," however, because it is actually within this age that the productive capability of the senior executive is at its peak. It is within this stage that the employer could actually reap the highest profit, or return, on the initial hiring decision. Regrettably, this return is rarely realized due to the operation of the perception/productivity paradox, which blinds the unaware employer to the potential benefit.

Stage IV - DECLINE: Within Stage IV, decline occurs because, once again, the perceptions of the two parties in the relationship are at variance. The employer is plagued by increasing discomfort with the relationship, to the point of taking actions which may be described as "self-fulfilling prophecy." The executive employee by this time, seeing the handwriting on the wall, engages in activities that are largely unproductive to the organization. These activities include effort wasted on executive tasks that have little probability of coming to fruition, on self-justification that often involves criticism of his or her employer and on preparation for transition to a new job.

The result from the loss of mandate that occurs in the decline stage is at best an unproductive stand-off and at worst a truly deteriorating business situation while the bad relationship is finally defined and expunged, and the necessary accommodations of severance and transition accomplished.

What can be done to mitigate the effects of the very damaging perception/productivity paradox? Several successful methods are available. Promotion from within - where "known quantities" are almost always present, if unrecognized - is a very productive alternative.

If you must hire from the outside, some very sound hiring techniques have been developed and should be used wherever possible. These include the "Assessment Center" technique used for at least 20 years in larger organizations and now available to smaller companies locally.

Lastly, especially if you are in the middle of one of these relationships at the moment, you may take steps to expand the growth stage, and to slow or reverse the effects of the maturity and decline stages. This can be done by taking the perception portion of the paradox "head-on."

Because the destructive effects of the paradox compound as time passes, start talking NOW. As tempting as postponing a frank discussion may seem, the longer you procrastinate, the more destructive will be the result. Improved communications and training, more frequent performance reviews and adjustment of each person's expectations to fit reality are essential. Remember, senior executive talent is most often built, not discovered.

Ronald K. Mitchell is a CPA who researches and writes in the field of entrepreneurship, and serves as a management consultant.