Is your CEO stepping down? Follow these tips to ease the transition.
- There have recently been major changes in the business sector. In particular, a record number of CEOs have officially stepped down from their positions.
- A CEO stepping down can cause confusion or even panic. Therefore, creating a plan to help your company manage through this stage of transition is vital.
- Some of the top things that are important to navigate through this transitional phase are to keep a positive attitude, be transparent, and create an action plan.
While the world is struggling to get used to the so-called "new normal," this involves getting caught up on various things that have been unfolding in the business sector in recent years. In fact, according to 24/7 Wall Street, there was a record-breaking number of chief executive officers who either lost their jobs or resigned from their positions – 39.5% higher year compared to last year.
This mass exodus of leadership within the business realm has transformed the world of business as we know it. Therefore, there are plenty of companies that have found themselves scrambling to find a replacement for CEOs who have been leading companies for many years.
A CEO stepping down from their role might cause panic and confusion. Their responsibilities now must be delegated or assumed by new management, which can impact the structure the company worked hard to build over time. Additionally, CEOs are often viewed as the core of a business, and changes in upper management often lead to upset among staff.
As important as CEO leadership is, shifts are normal, and your CEO may not be a permanent fixture at the company forever. The good news is that changes in management don't have to lead to widespread alarm, so long as you communicate with your team and act like the leader they need. Here's how to do it.
Maintain a positive attitude.
Before your team jumps to conclusions, address your employees in a calm, empathetic manner. Be sensitive to their anxieties, and approach the matter with confidence and positivity.
"People might … think that their jobs and careers are on the line and [that] they must leave immediately before they feel humiliated about being asked to leave," said Ketan Kapoor, CEO and co-founder of Mettl. "One negative thought can lead to the other that quickly becomes a vicious circle. So, it's important to address the audience and assure them that the situation is under control, and there's nothing to panic about. With a small effort, you can prevent the workplace from being toxic."
While you don't want to be blindly optimistic with your team, you should explore the positive sides of each challenge. Peter Thies, president and founder of The River Group, advised being prepared to balance concerns with opportunities.
"The goal is for the team to have a shared understanding of the opportunities, a common view of nature of the changes that will likely happen and an open discussion of any risks," Thies said. "In most cases, the actual impact on teams in the near term is far less than most people make up when they first hear the news of a new CEO. An open discussion of this is very comforting to most teams. Change will happen, but it rarely occurs overnight."
Open communication is crucial through any company change. Respect your employees enough to alleviate their concerns without disclosing any private information and do so before there's time for gossip to spread or panic to rise. Be upfront and transparent with them as soon as the news breaks.
"Unfortunately, there are rumor mongers at every workplace, and you must keep them in check," Kapoor said. "Maintaining openness and transparency is the key here. Before the employees approach you for answers to a thousand questions clouding in their mind, be proactive and announce a team meeting with the different departments."
During these meetings, he added, ask them to share any thoughts or concerns they might have, and answer what you can. This might include the changes in hierarchy, how it will impact their positions and what to expect in the upcoming weeks.
Create an action plan.
If you don't already have one in place, you should form a plan to transition your team through the process. This will give them some stability in a situation that might breed uncertainties.
"It is likely that the departure of your CEO will seriously disrupt the company, so it's worth creating an action plan to be implemented during the transition period," said Steve Pritchard, business consultant for ASPLI. "Having a plan will help you to be ready for the potential changes a lot quicker."
To do this, Pritchard advised developing a timeline, calculating the amount of time it will take for a new CEO to fill the position.
From there, you can determine how to spend that time efficiently while being open with your team about changes. Don't rely on upper management to come to you; be proactive in getting your questions and those of your team questions answered and offering a strategy for the upcoming weeks.
"Take the opportunity to understand the new CEO's values, agenda and intentions for the company," said Thies. "Are these in line with the strategy you support? Do you believe that he or she will be the right kind of leader? In a managerial role, you want to answer these questions for yourself so that you can then prepare to discuss this with others."