Dos and Don'ts of Successful Leadership Transitions
3 July 2007 Peter Fischer
It is generally expected that successful executives will move on to new responsibilities every two or three years. Peter Fischer outlines some of the questions posed throughout an organisation as soon as a change in leadership is imminent.
A change in leadership can prompt many questions. When will the new executive be able to draw up a new strategy? Will their relationships with the staff be as close as their predecessor's? How will they deal with the expected market turbulence? Will they be able to establish the same credibility with our customers? Will they want to improve relationships with our internal clients? Will I get on with them?
These speculations about the newcomer's first decisions and likely approach form the focus of people's attention. They are the reason why past experiences with, and failures of, the new person are discussed in company cafeterias, and no finance journal misses out on stories about current or expected changes at the top.
They are also the reason why the newcomer needs to be aware of the stories circulating ahead of his start, as this forms part of a delicate yet decisive dynamic between hope for a 'better' future and uncertainty and concerns about what might be in store.
Considering that each change costs approximately two and a half times the newcomer's annual salary, it makes sense to ensure this investment pays off and to find out about the dos and don'ts of successful leadership transitions.
WHAT MAKES A SUCCESSFUL TRANSITION?
John Gabarro, a professor of human resource management at Harvard Business School, is one of the few academics to have studied the factors affecting the success of changes in leadership. His early research examining the process of top executives taking over their positions still holds true.
Industry 'insiders' were considerably more successful than industry 'outsiders'. Insiders succeeded more quickly than outsiders at adapting to the new situation and distinguishing between what was important and what was not. Of course, insiders were limited by insider vision, but their ability to respond quickly made up for that potential handicap.
The results refuted the myth of a quick change in leadership. In many cases, at senior levels the process of getting established in a new position extended over one to two years, as major structural and staff changes followed a change at the top.
Gabarro distinguished a typical pattern of activities and observations. After three to six months, most managers had launched their first major changes. This was followed by a phase of intense observation during which the newcomer gained in-depth knowledge of the organisation, which he or she applied during a second phase of change after 12–18 months.
A crucial factor distinguishing successful from less successful leaders in new positions was the relationship to key people. Three out of four managers who were not successful in their new roles after 12 months had poor working relationships with their key employees. They had conflicts over objectives, leadership style and the criteria of effective performance.
CREATING A VISION
Executives who make the transition successfully recognise and develop key relationships. They deal adroitly with secret rivals and predecessors, build networks in the company, and are much more successful at developing mutual expectations and communicating shared objectives.
Those who successfully assume new leadership roles also have a number of other competencies that set them apart from less successful counterparts. They are able to organise and communicate the many topics, issues and expectations in a clear, manageable concept. They rally employees to a vision of the road to be taken in the future and spur them on to unusual performance.
CALM UNDER FIRE
When it comes to changes in leadership, another characteristic that differentiates successful from less successful executives is their stamina, particularly in a crisis.
People who succeed in a transition immediately convey confidence that the chosen objectives will be achieved. They understand the importance of exhibiting self-confidence and are not dissuaded by obstacles that keep arising. These people have usually already changed jobs several times, so they have acquired broad knowledge about the course the process takes.
Knowing the territory, shaping the key relationships, developing a communicable vision, and imparting confidence and credibility are a few of the factors that differentiate people who take over a position successfully from those who are less successful at it. These characteristics are not innate; they are competencies acquired through practical experience.
People who are successful in making transitions work seem to have developed a special kind of know-how. It therefore makes good sense to pay attention to the newcomer's experience with similar situations, especially when a tricky transition is encountered.