My client, Karen, called at the end of a particularly frustrating year. She’d been hired six months earlier as the chief marketing officer of a manufacturing firm. The business had undergone three reorganizations over four years, each resulting in a top management change. The last reshuffle brought Karen to the company.
“I know exactly what we need to do to grow this business and lead in our market,” Karen stated. “But I’m tearing my hair out trying to get my team and colleagues focused on a plan for the way forward. We’ve sat in five meetings this month alone, yet nothing we agree on gets implemented by employees. We’re foot-dragging our way to a finish line that’s shifting daily, and our competitors have the advantage.”
As we unpacked the last four years, Karen’s challenge became clearer. The two previous CEOs had made errors in their approach to reorganizing the business, and the ramifications of those mistakes were at the root of Karen’s dilemma. Three business restructurings in such a short period, with a new slate of leaders appointed twice in 24 months, taught employees to resist change. When we examined the decisions made by the senior teams over three regime changes, we discovered consistent patterns that impacted employee confidence in management. It was confidence that unraveled over time, rather than overnight, driven by the following leadership actions:
- Wiping the slate clean: Two of the three incoming CEOs decided to replace everyone in a critical position on their team. While there are appropriate reasons for shifting players in the C-suite, firing everyone from a previous administration says a lot about a CEO’s belief in their ability to lead. Leaders risk building an organization lacking diverse viewpoints, passions and perspectives when everyone on the team is comfortable. It’s easy to hire someone who thinks like you do, but is that what’s best for the business?
- Lack of construct and involvement: The first new CEO implemented changes rapidly to appease a demanding board. Rather than involve the workforce in defining opportunities for systemic and process improvement, he and his new team simply directed the organization to move in the way they defined. By not considering or valuing the input of long-tenured employees with deep organizational wisdom, they failed to identify fatal flaws in some of their decisions. Their actions created significant rifts in customer relationships that are still unhealed today.
- Failure to understand capabilities: With so many new leaders at the top, there was little understanding of and appreciation for the organization’s capabilities at all levels. The newly appointed leadership team spent little time identifying, incentivizing and rewarding the hidden gem talent within the company. Given the lack of appreciation and missteps, competitors easily recruited some of the organization’s most valuable contributors, and the organization suffered a “brain drain.” At a crucial time, the strategic thinkers (who gained fulfillment from shaping the company’s future) went elsewhere.
- Not arresting the spreading of disillusionment: As employees struggled to overcome these mistakes by leadership, levels of disillusionment and ambivalence grew. “What’s the point of trying to comply with the latest restructuring scheme,” they thought. Many employees adopted a “just keep your head down” mentality and “wait for the storm to be over.” Leadership missteps stoked employee resistance to change further, and those leaders did little to address the growing cynicism in the workforce.
- Failure to inspire: More than 30 years ago, researchers proved that an inspirational appeal is the influence technique that best garners employee commitment to change. Employees who feel motivated and included in the organization’s future will devote discretionary effort to help the company achieve a vision in which everyone can take pride. Karen’s path forward is simple and yet complex. She, the CEO and his staff need to earn or regain employees’ confidence. Involving people at all levels to shape a better vision for the company inspires everyone to be part of a brighter future.
Opinions expressed by SmartBrief contributors are their own.
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