Managing change at the top
Luke Bowery and Kate Redshaw, July 05, 2018
The main issues to consider when changing key members of the leadership team
A change in leadership can be an exciting proposition for any organisation, offering up the opportunity for a repositioning and refocusing of the corporate agenda, and the chance to breathe new ideas and energy into the business. However, even when it is anticipated (which of course is not always the case), replacing an integral member of the leadership team isn't easy.
Take the time to identify the qualities and skills you are looking for
Identifying the right skills and experience needed for a leader isn't always easy as it requires a deep focus on the organisation’s strategy moving forwards and a commensurate matching of skills to meet that strategy. As such, it potentially needs the board to take some major business decisions. Are you looking for transformational change and a leader with the ability and appetite to shake things up, or is the brief a safe pair of hands to keep the ship on course? If you are working with executive search specialists or recruitment agents speak to them to get a feel for who might be available, what restrictions they might be subject to, and how straightforward (or not) it will be to meet your requirements. This should also give insight into how long the recruitment process might take to complete. At the same time consider the terms upon which any appointment will be made – how will the remuneration package be structured and what contractual terms and protections will you need to put in place so you can draw up a tailored, ‘fit for purpose’ service agreement at the appropriate time.
Don’t be afraid to test out senior candidates before making an appointment
No-one thinks twice about putting potential graduate recruits through a rigorous series of assessments, tests and interviews. However, in many organisations the more senior the appointment the fewer the checks and balances in place as competence is taken as read. A prestigious CV should not negate the need for pre-appointment rigour. An impressive track record does not necessarily indicate that the candidate is right for your organisation. Consider the brand and values of their previous employers – do they reflect how your organisation operates? If not, however credible the person is on paper their qualities may not match your requirements.
Set clear objectives and timeframes for delivery
When a new recruit joins the senior leadership team there can again be a tendency to assume that normal rules don’t apply when it comes to setting expectations and targets. It is taken as read that the new joiner will know exactly what to do and how to do it because of their existing track record. This is particularly common where the appointee has a brief to bring about change. However, people are not mind-readers and it is important, regardless of seniority, that the person has a clear set of objectives to work to and an understanding of how and when these will be measured.
Consider whether or not a probationary period might be appropriate or, as a minimum, build in interim reviews as a routine element to any senior appointment. Having this structure in place offers the opportunity to identify any mismatch in expectations at an early stage and, if performance does not ultimately meet your requirements, makes the situation much easier to address.
Demonstrate active support of change
If you are bringing in a new leader with the specific brief to implement change make sure the business knows that the person has the board’s full backing to do so. Take the time to work though the vision in advance to identify a strategy that the board will support and drive through. People are generally resistant to change and the ultimate success of any restructuring or change in strategic direction will be dependent on a united leadership team coupled with a comprehensive and meaningful stakeholder communication programme.
Departures at a senior level, however amicable, inevitably cause ructions and speculation both within the organisation and externally. Most boards will succession plan to a degree but senior-level departures can also occur unexpectedly. To reduce potential damage, map the risk and consequent path of action (as far as you can) in advance. You can also help minimise the fallout by always having the bigger picture in mind when managing the departure. How will the external market react? Will you need the executive to co-operate with the handover? Where are they likely to go? Take account of these factors when structuring any severance package, for example, by issuing an agreed press statement, staggering termination payments, and reaffirming or recasting restrictive covenants as required. Everyone benefits if a departure can be managed in a dignified manner so one of the most important things is to put emotions to one side to ensure the best end result all round.
Luke Bowery is a partner at Burges Salmon. Kate Redshaw is a senior associate at Burges Salmon