What to Expect From Leadership Changes at the Top In many cases, a new CEO will be disruptive and unexpected and employees will have to deal with the uncertainty that can cause.
By Josh Bersin •
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Companies often get new CEOs. In fact, the median tenure of a CEO is only six years, so many employees are likely to experience this transition. What is likely to happen and what can you expect? I've not only studied this area in detail, but have experienced new CEO transitions firsthand throughout my career.
Related: 5 Ways Insightful Leaders Keep Their Teams Working Calmly During Tumultuous Change
Technology is changing the way we lead.
Let me set the stage for you. Digital technology is having a profound effect on organizations. It is fundamentally changing the way we work, the way we manage, where we work, how we organize, the products we use and how we communicate -- and the types of C-suite leaders needed to handle the new "organizations of the future." Leadership, as a whole, remains a critical issue for companies. In our 2017 Deloitte Global Human Capital report, nearly 80 percent of business and HR leaders surveyed identified leadership as a top priority.
New leadership may mean many changes to come.
The need for new leadership at the top of an organization happens for many reasons, but primarily because the company simply needed a change. In some cases CEO transition is orderly and carefully managed, but in many other cases the new CEO comes in to fix problems. In this latter case, you can expect the new leader to rapidly get to know the company, make changes as quickly as possible and likely change his or her top management team.
Once the new leader is in place, you are likely to see some or many changes in corporate culture. In many cases, the new CEO was hired because the company was struggling to grow, perhaps may have had a legal or regulatory problem, or the company's strategy was not producing the right results.
Related: How to Lead Your Team Through Change
When the CEO and founders at Sybase left in 1998, for example, and the new CEO John Chen joined, the company was struggling to grow and had failed to understand the rapidly growing market for enterprise applications. At the time, Sybase was primarily selling enterprise database and tools. Chen came in with a fresh perspective, brought in a whole new management team and took a skeptical eye to almost every product and sales strategy in the company. It took many years, but eventually Sybase became a powerhouse company selling mobile databases, and was later sold to SAP for $5.8 billion in 2010.
During that period of time, Sybase made many changes to the product strategy, many senior leaders from the prior regime left, the company headquarters were relocated and the target customer market changed. The company's workforce had to get comfortable with new senior leadership, help shift and adapt the business to the new product strategy, and re-establish their own internal brand among management. While some in a company may take a "wait and see" attitude, generally the better approach is to get ready for change, work hard and take the time to meet new management, making make sure they know what you're working on.
New leadership should understand how change affects employees.
One of the most stressful issues for employees to deal with might be the fact that their role, position and internal network may suddenly disappear overnight once a new CEO takes hold and starts making changes. They will need to have trust that the new leadership has the ability to steer them through uncharted territories. Only with that kind of confidence can employees feel safe enough to let go of some old biases about how the company should operate, quickly become comfortable with new product and go-to-market strategies, and humble themselves to the fact that much of the reputation and relationships they've built before may have to be rebuilt.
Related: When Leading Through Change, Adopt These 4 Strategies
These are difficult issues to deal with, and are often why many employees consider leaving when a new CEO and regime change takes place. On the positive side, however, a new CEO often means new energy, business growth and opportunities to move in new directions. Gain the trust and confidence of employees and they will be energized with new possibilities.
Perhaps the most important thing to understand is that, in many cases, a new CEO will be disruptive and unexpected and employees will have to deal with the uncertainty that that can cause. New leadership should make sure that they take the time to communicate how and why new decisions have been made. If employees find the new leadership impossible to accept or understand, the company may soon find itself facing the costly consequence of high turnover.
Of all the things I've learned in business over my 40-plus year career, the most important is that we all should learn to embrace change. A new CEO is often an exciting and inspirational event: Roll up your sleeves, pay attention to what's happening, and do your best to communicate the new agenda and win people's trust and confidence.
