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Leadership Transition – Harnessing the Power of Disruption (Part 2: Tactics)

By Margaretta Noonan and Evan Smith, Featured Contributors

In Part One of this article, we discussed setting strategic direction and context that we have helped organizations use effectively when going through a change at the top.  Orchestrating successful achievement of the transition can have many moving parts; here we share some of the tactical applications to take the inevitable disruption created by this change and use it to transform the company in an energizing way.

 Acknowledge and plan for the disruption of the exit

The departing CEO deserves a dignified exit unless compelling legal or ethical reasons prevent this.  Stakeholders inside and outside the organization take cues about the company from how this is handled. How is an important transition of power – including a considerate exit – orchestrated?

th-1First, understand the motivations, needs and goals of the departing CEO. What matters…money? status? reputation? legacy? next career move? Often, a combination of several of these or other factors drive the individual’s response to a proposed exit. Before beginning an exit conversation, prepare some scenarios on what drives the leader, and what elements of both form and substance related to the departure (and her next opportunities) might have real meaning.

Carrots are important. Once you understand the factors that matter, work to satisfy as many of these as possible. This can be done through cash separation payments, amended benefit terms, or the ability to craft the departure press release.  Other “carrots” might be intangible in terms of economic compensation but have important symbolic value: an “ambassadorship” to an industry association; a different, new position; a board seat.

But don’t forget sticks. One of the advantages of providing consideration through separation payments or other means is requiring a written release of claims in order to receive them.  These releases should stipulate not just that the individual not sue the company but also that she will not disparage it, release confidential information or solicit employees or clients.

The period between the announcement and the leader’s actual exit is a time when people may want to express appreciation for hard work, for the partnerships and teaming that were personally rewarding, for personal gifts of attention and insight; they may want to celebrate together the achievements great and small that the work together helped to create.

Allowing the exiting CEO to address the organization, to receive acknowledgement as an honored guest at a party to celebrate his tenure, to be visibly thanked by the board–These and similar actions are cathartic for the company and meaningful to the leader. They provide structure and ritual to what could otherwise be a chaotic time.

Capitalize to maximize disruption value of the entry

The disruption of a new CEO isn’t about throwing out what went before and building all over again. Nor is it about maintaining the status quo. Rather, the disruption allows the new leader to exploit some important opportunities that include:

  • Transferring Knowledge from the Old to the New: interrogate every conceivable resource – the departing CEO, employees, senior leaders, the board, outside consultants – to develop an enriched perspective on the past, present and future of the organization.  Aggressively soliciting a diversity of perspectives will provide a fuller picture of an array of cultural norms, internal execution capability and business opportunities.
  • Aligning the Executive Team:  A new CEO has the opportunity to turn a management group into a remarkable team by focusing its members on:
    • Creating the desired culture that maximizes the execution capabilities of the firm toward a clear strategy – what’s good of what the company has and should be kept; what new elements need to be built
    • Developing a shared vocabulary that does justice to the new direction of the company
    • Defining (or redefining) the core values, the mission, and the shared vision
    • Creating a team charter that specifies the important behaviors, service standards and commitments agreed upon by the leadership team
    • Of huge importance is defining the strategy – whether an extension of the old or a wholly new approach – and translating it to goals:  what represents the collective direction and what outcomes are we harnessing our efforts to create?
    • Cascading the outputs of this agreement to the rest of the organization
  • Assessing Talent – and Developing Leaders: Many managers and executives in the organization may have great passion for delivering superior customer service, say, or creating a positive work environment, though they may lack the technical skills. Others may have the skills but not the passion.  The new CEO has to address these gaps uncompromisingly by:
    • Formally assessing all leaders in key positions
    • Creating a professional development plan for each individual, which might include “classroom” time to address content gaps, periodic coaching and/or structured development experiences to create successful business results and test new ways of working
    • Setting clear expectations and relentlessly holding individuals accountable for results
    • Identifying other key roles in the company – most productive sales person? best product developer? customer service award winner? – and be sure they clearly understand and endorse any changes to strategy or culture – make them champions and change agents

Move from disruption to transformation

Orchestrating a high-stakes, successful leadership transition is a critical competence, and an important marker of organizational maturity for many company stakeholders – employees, vendors, and financial investors alike.  Doing it well, through creating a thoughtful exit for the departing leader and a transition period focused on knowledge, alignment, assessment and development for the new leader, send clear messages of consideration, value and values, principles, and other signals.  Using this framework can help to take a disordered time and bring not just order but improvement.  It generates the power to harness disruption and create a transformative moment for the company.


2012-Photo-150x150MARGARETTA Noonan is a member of our BizProphets Panel and is the founder of noonanWorks, a WBENC certified woman-owned business that helps companies “Reach Remarkable” through their human capital assets. Before becoming an entrepreneur, she had C-suite experience with Fortune 500 companies in all global functions of human resources. She has a proven track record of identifying troubling issues in complex organizations and implementing solutions.


Smith-Evan-web-photo-150x150EVAN Smith is a member of our BizProphets Panel and a Senior Partner with Schaffer Consulting; his affiliation with the firm began during his time as a client in the early 1990s.  Trained as an industrial engineer who also took deep dives into social sciences and liberal arts, he has been helping leaders to deliver measurable results by fostering successful organizational and individual change for more than 20 years. His consulting clients have included major pharmaceutical, medical devices, financial services, chemical, automotive, technology, energy, and professional services companies, among others.


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