You’ve probably been following the recent news of Boeing as it navigates a seemingly endless stream of crises. Perhaps unsurprisingly, Boeing announced it will replace its CEO as a result. Making a big change at the top creates a shift into a new chapter and can often generate a much-needed sense of optimism for shareholders. Boeing is not alone. In fact, other major corporations—most notably Bayer and Chemours—also announced new CEOs mandated to lead course-correcting, business-saving interventions after difficulties arose for these corporations.
These transitions at the top are just the most recent examples of new CEOs stepping into companies experiencing daunting problems to turn things around, thus the term “turn-around CEOs.” In other circumstances, new CEOs are consulted to focus at least their first 90 days on listening, learning, and building relationships. Turnaround CEOs do not have this luxury. A recent McKinsey report indicates that new CEOs who move quickly to make changes generate better returns than leaders who slowroll their adjustments. In these moments of change, the response of talent and HR plays a big role in the potential outcomes the new CEO can achieve. Let’s explore what talent and HR leaders can do to make this transition as smooth and successful as possible.
Understand the Mindset of Your New CEO
When a turnaround CEO comes in, they usually have been selected based on their willingness to be bold and make big course-correcting bets. They are coming in under unusual and drastic situations. In the case of Boeing, it is following extreme and continuous crises related to its manufacturing process for the 787 Dreamliner planes. In these instances, the board will be creating pressure to take a big swing to restore the company’s reputation and posture as an industry leader.Although replacing a large corporation’s leader is no easy feat, the move stems from wanting a fresh perspective. Due to the gravity of the crises at hand, this new leader often comes into the role more focused on business strategy and systems than people—a response to their mandate to right the ship. As a result, they are somewhat detached from any sense of loyalty to how operations have been. They may come across as ruthless and myopically focusing on the business’s health and success. What they need more than anything is support for this approach from the inside.
In the face of impending change, employees of the organization often go into fear-based modes (fight, flight, or freeze). It makes sense to feel fear in a state of uncertainty. Unsurprisingly, none of these help signal partnership to the new leader. This is where a strong talent function can play the crucial role of becoming a partner to the incoming CEO in accomplishing their goals, however drastic, strategically and swiftly. While the CEO takes accountability for moving beyond past failures that led to crisis, an understanding HR team can use change management strategies to motivate teams to get on board with the changes and support the company’s new direction.
Prioritize Effectiveness Amid Change
To be truly effective requires all hands on deck, from the top down. For many, this comes from revisiting first principles, or the fundamental concepts that originally shaped the company. Lego CEO Jorgen Vig Knudstorp is one example of this. He brought the treasured toy company back from the brink of bankruptcy to become arguably the most successfully privately held company in the world. He did this by resetting the company’s foundational principles that the founder crafted initially, notes the Inc. Magazine article, " How Looking Backward Helped Lego’s CEO Save His Company."By revisiting what originally drove the company forward, Knudstorp refocused everyone on the original essence of the brand—tiny bricks. A less well-known element of this turnaround story is how Lego’s HR team successfully positioned themselves as an integral contributor, rather than just administrative or transactional, according to “Building Lego’s HR Structure, Brick by Brick.”
When talent leaders demonstrate their willingness to be a part of the solution with a forward-focused mindset, they can quickly become essential assets for the new CEO. This may involve pulling company data, assessing productivity levels, helping everyone depersonalize the change process, and supporting whatever drives the most valuable outcomes. Such responsibilities may pose a challenge to many HR professionals who are trained with a people-first mindset. Although it may feel like a departure from your usual roles, this can be a valuable learning experience. Those who adapt and follow the lead of the new CEO can establish themselves as true business partners—a reputation and experience set that will last well beyond a single chapter of a business’s trajectory.
Mitigate Challenges With These Takeaways
Talent professionals are uniquely positioned to support the new leader during crisis-driven CEO transitions and help shape the path forward. In my experience coaching turnaround CEOs, I have found the following tips to be most effective in making their jobs easier.1. Be Proactive—We always hope our company won’t face a crisis. There is a benefit, however, to thinking about how we would handle a contingency before it ever becomes a reality. Consider your workplace and how you can proactively prepare to navigate crisis if it occurs. This may include learning about change management or business metrics, identifying inefficiencies in current operations, evaluating employee effectiveness, or upskilling current staff to meet the company’s future needs.
2. Leverage Networks— As a talent professional, your network of external peers is a crucial tool for learning. Speak to others in your field who may have navigated a crisis-driven transition to learn their best practices.
3. Adopt a Coaching Mindset—In all conversations, especially with a new CEO, use active listening, powerful questions, and a solution-oriented approach, to gather information that can help find answers to current problems.
Despite being tied to a crisis, a change in leadership can create real opportunity for everyone with a solution orientation. The window to prove your value is short, so scan for opportunities to be bold and showcase your expertise as a business leader.
