Leadership transition: how are organisations getting it wrong?

“All change, all change,” as the electronic guard on a Tube train barks – always a tad too loudly – when the vehicle is about to head back to the depot for a night’s rest. The passengers get the message: everybody out – time for this thing to get cleaned up and then roll back on the tracks the next morning as good as new. And much the same can be said for the sentiments behind leadership transition within a private or public entity.

As a concept, transition conveys a sense of refreshment – the notion that what may have become a little stale, old or unworkable is about to receive, in the words of any popular TV medical drama, “10CCs of adrenalin and a crash cart”. In other words, a new lease of life – or perhaps even a new reason to live. Scenarios where the potential impacts of leadership transition will be uppermost in the minds of an organisation’s senior staff will be:

  • When a chief executive is on the way out, and another is incoming;
  • When the organisation is preparing to merge with another in the same industry, or
  • When a chunk of business goes into turnaround to another company.

Naturally, in the third scenario, the transition of that business will occupy the thoughts not only of one group of senior figures, but two. However, when the large personalities of high-profile individuals get bundled up with these sorts of changes, do we end up with a distorted perspective of what transition means? In my view: Yes – we do. And here are some thoughts on why I think it’s unhelpful for those individuals to become focal points.

Strategic signals
Arguably, we were all made hyper-aware of the machinery of transition in the weeks up to 20 January, thanks to copious coverage of Donald Trump’s attempts to dot ‘I’s, cross ‘T’s and generally square circles as he prepared to take the reins at the Oval Office.

Much as Trump himself managed to seize the lion’s share of media attention during that transition, the process itself circled primarily around his appointment of a team – one that will manage and coordinate all the various branches of his mission to ‘Make America Great Again’. Unsurprisingly, it’s a team freighted with head honchos from across the higher end of US industry, reflecting Trump’s oft-stated aim – reiterated during his inaugural address – to put domestic business first. And that’s really the crux of the matter: it’s the decisions of those people, not Trump, which will have the greatest bearing on whether the 45th President’s commerce-based pursuit of glory succeeds or fails.

Let’s face it: any leader of a large organisation – especially the vast sprawl of the US government – will bump up against significant limits in terms of the influence they can wield over every, tiny corner of the operation. And if a firm looks to its chief exec as the lone, strategic signaller whenever a sweeping change rolls across its industry – such as a disruptive technology, or an economic upheaval – then it’s bound to grind to a halt, when what it should be doing is leaping like an acrobat.

People talk a lot about how there’s no ‘I’ in ‘TEAM’. Well, there’s no ‘CEO’ in it either! And only a well-organised, well-coordinated senior management team (SMT) can provide a business with the agility it needs to endure turbulent times, or to respond to sector-wide shakeups. Each member of an SMT should be not only 100% on top of activities within their own sphere, but fully aware of how their area of the firm connects to and supports the surrounding divisions. That level of awareness is what provides an organisation with the ability to flex – and maintaining that suppleness is key to executing a successful transition.

Own goal
This is by no means an accurate figure, but it’s my hunch that 99 times out of 100, when a chief executive’s mission belly-flops, it’s because of flaws within the team structure around that individual. And critically, this can blight the career of a heavy hitter who has previously enjoyed a terrific track record – the kind of track record, in fact, that made that person worth hiring in the first place.

Remember David Moyes’ time as coach at Manchester United? (Okay, okay – I know a lot of Man U fans are trying to forget it…) Famously, Moyes’ predecessor – the legendary and long-serving Sir Alex Ferguson – was also his mentor, and advised him to keep assistant manager Mike Phelan, first-team coach Rene Meulensteen and goalkeeping coach Eric Steele on the books when he came onboard in May 2013, to preserve the continuity of the club’s playing style. This was a crucial transition for Man U: Ferguson had been at the helm since 1986. Many of the club’s backroom staff had never known anything else – and were reluctant to contemplate it. Nonetheless, Moyes reportedly ignored Sir Alex’s sage advice, and replaced the established trio with coaching assistants from his previous club, Everton.

The result? Man U made its worst league start in 24 years. Moyes and his team never properly gelled with the club’s infrastructure, and he was sacked in less than a year. The lesson: crafting a team that will buttress – and have chemistry with – a senior figure is not like spot-welding together big chunks of different cars. It’s more like delicate surgery – and the wrong incision can be fatal.

There’s also something to be said for the potential benefits of an incoming exec risking an initial spell of unfamiliarity with a team they’re not used to, rather than trying to cut and paste the people they’ve been with for years. You never know – the crew that’s already in situ may have a lot to teach someone with a lot to learn.

Can’t get the staff
Tensions of the sort that engulfed Moyes can also break out around department heads. You may well have seen the recent news about compliance veteran Peter Hazlewood’s abrupt departure from Deutsche Bank’s anti-financial crime and anti-money laundering unit. A seasoned, internal watchdog for many years at a several other, big-brand financial institutions (such as Standard Chartered, JP Morgan and HSBC), Hazlewood took off from Deutsche Bank after just six months.

The finer details of his decision to quit are opaque, to say the least – but a Wall Street Journal report indicates that he clashed with fellow executives over his desire to recruit hundreds of additional staff to the bank’s compliance wing.

If the Journal is to be taken at its word, then, the team issue here is twofold: those around Hazlewood didn’t support his vision for how he wanted to fulfil his brief – and he himself felt as though he lacked the team resources he required to work effectively. What could have been a fruitful transition ended up running aground, on the back of differing views that could have been addressed in the hiring process.

So as you can see, considerations behind the team factor, and its effect upon senior figures, are highly nuanced – and a lot more holistic than many people appreciate. For my money, if an organisation even realises that, then that’s a big win for progress. But it’s even better to practise it. There are too many subtleties involved – and far too much at stake – for boards to view transition as a blunt instrument that’s meant to deliver a quick blow for success.

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Image of an incredibly stressed-looking David Moyes by Jon Candy, via Wikipedia