Bridging the Uncertainty Gap
The right leadership is critical to an effective Whole Revenue Strategy. Here's how to use the Leadership Transition Framework to turn a crisis into an inflection point.
“Ben we’re going to need to help with an announcement and strategic communications strategy for an executive transitioning into a CEO role.”
“No problem,” I said. “We’ve only done that dozens of times before across every industry.”
“It might be contentious though.”
I brushed it off, “That’s fine, not every change is going to be viewed by the incumbent and certain stakeholders as positive.”
“We’re 50 hours before the announcement.”
My eyes grew wide: “I’m sorry, what?”
“Yea….”
“Well alright, let’s get to it then. No one is sleeping,” I replied and went to brew a cup of coffee.
Not every CEO transition is this intense. Not every transition is contentious. And not every transition has such a small window for execution. That said, they all have the specter of uncertainty and pitfalls hanging over them. Succeed, and an incoming CEO can set the company on a course towards growth and prosperity. Fail and the company can unravel out of existence.
In this post, we’ll go over:
How the situation can result in an unraveling of the company or a boosted upward trajectory.
What to focus on to ensure crisis mitigation.
Actions to take to establish trust with all stakeholders.
How is a CEO change a crisis?
The most commonly used description for a crisis is a time of intense difficulty, trouble, or danger. In a corporate environment, it could mean a reputational issue, product issue, financial fraud, employee strike, workplace harassment, and a host of other issues that put business continuity at risk. Similarly, during a CEO transition, whether amicable or contentious, it has the potential to put the future of the company at risk. Even well-received executive changes are unsettling and can be shocking when announced suddenly.
Within a working environment we, as humans, crave structure, routine, systems, processes. Having an intimate understanding of what we need to do and what is expected of us to do well is the cornerstone of any company, from startup to Fortune 500. Along the way, we introduce aspects that tribalize our culture, making it both similar to other corporate structures while simultaneously specific to our particular company, such as giving employee groups a name i.e. Googlers. In addition, the permeance of jargon – i.e. circling back, touching base, bandwidth, low-hanging fruit is an example of shared language that allows us to create a common and specific understanding of what we mean when we seek to communicate our thoughts, and the context-specific language makes teams feel more bonded. That said, is it really that hard to just say “I’ll email you when I’m done” instead of “I’ll circle back”? But I digress and will save eradicating corporate jargon for another piece.
“The Uncertainty Gap: the period of time in between the current state of routine and the end of the transition.”
The point is that routine is everything and the bottom line is that a change at the very top means that change will permeate and flow down to every level of the company. The change itself creates a dangerous time of limbo that we’ll call The Uncertainty Gap. That is the period of time in between the current state of routine and the end of the transition of the new CEO 90 days later. How one manages The Uncertainty Gap can either galvanize internal teams and excite investors/shareholders and external partners, or, if managed poorly, lead to the unraveling of the company, thread by thread. That means mass voluntary employee exists, clients pursuing other providers, shareholders & investors losing trust in the leadership team and direction of the company. This could be a quick blow or a slow bleed, but the end results are the same: loss of market share, being overtaken by competitors, sales taking a dive, loss of customers, investment flow halted, quality of employee applicants reduced, and struggling to stay afloat instead of driving progress.
The way in which to view CEO transitions is as much of a crisis as it is an inflection point in the company’s trajectory. Will it trend upwards or crash? The angle of that trajectory is in your hands – and with the below framework, you can ensure that your crisis will be viewed as the beginning of an upward trajectory for your company.
Change is hard, but you can make it easy:
While every company is different – varying industries, size, market share, culture – all transitions follow a similar pattern in the stress they cause internally and with external stakeholders.
Internal Stress
In the same way that we crave structure and processes (i.e. the known routine factors) at work, we are similarly self-interested first. When such news breaks the internal monologue and subsequent questions from leadership and employees are always the same:
Is my job safe?
Will there be mass layoffs?
Are we changing strategic direction?
Will the CEO bring in a completely new team?
Do I fit into the future vision?
External Stress
At the same time, the market will ask questions about why the change took place, explore what might be wrong at the company that required this change, and whether the new CEO has the experience and capability to lead the company forward. The handling and execution of the transition will be the first indication of that. Customers and partners will begin to question whether they will receive the same quality of service, and, worse, if there will be a disruption to the service altogether. Shareholders/investors may question whether their investment is safe with the company or whether they should explore other investment vehicles.
How to show a steady hand at the helm
So how do you actually allay these issues? The key is to mitigate the stress around the transition and demonstrate that the new CEO is the right leader at the right time to drive the company towards its corporate objectives. It might seem painfully obvious, but the ability to achieve both of those goals is among the most difficult tasks in strategic and crisis communications.
Should you find yourself in a transition, the Primary Objectives should be:
Reduce employee anxiety and stress relating to their jobs and the stability of the company;
Excite employees for the new CEO’s leadership and company vision;
Ensure business continuity with customers and partners; and
Manage external perception of change with investors/shareholders, press, and market.
The following is how you implement tactics against the strategy to achieve mission success.
Control the narrative, control the rollout
The only way to achieve the primary objectives is to have complete control of the situation, how the news unfolds, and the narrative surrounding the transition. This requires the highest level of alignment by a working group that ought to consist of the incoming CEO, their trusted no.2, legal counsel (internal/external as appropriate), and the transition communications advisors. The larger the working group, the greater the chance of information leaks as well as the added hindrance of slower decision-making.
In these situations, it is advisable to use an external strategy and communication advisors to manage the announcement and associated work around it. Despite the great work that in-house corporate communications teams do, the risk of leaks far outweighs the benefits. The last thing you want is for the narrative around the change to be controlled by other players, and worse, to not know the identity of those individuals.
In the same vein, the rollout of all the announcement and post-announcement activities needs to be executed flawlessly. This includes an internal letter to employees, top leadership meetings, a first town hall event, calls to priority customers, partners, and vendors, an announcement press release, media interviews and many other pieces of internal and external communication.
A well-executed, systematic rollout allows for both a demonstration of control and feeling of finality with internal and external stakeholders, as well as acting as a tidal wave against those who may be opposed to the change by not allowing any space for misunderstanding of how the power dynamic has permanently shifted.
Own the first 90 days
Following a successful announcement and activities in the subsequent days, the focus needs to shift towards an action-oriented 90-day plan. Those first 90 days are the chance to win by delivering on promises made during the announcement: this is the foundation of trust-building that will serve the CEO over the course of their entire time at the helm. In tandem, it is the key time to stabilize the internal structures (leadership and employees) to avoid unwanted attrition, garner trust by keeping promises made, instituting new cultural norms and operating principles, demonstrating to customers that they remain a priority, and setting the company on a new path.
Some critical tactics include:
Town Halls – This format provides the most effective form of communication at the intersection of mass audience and authenticity by providing employees a chance to hear from the CEO directly. Employees need to see, hear, and feel the CEO’s presence at every part of the company. This is needed more than ever in times of transition and perceived instability as employees need to know that there is a steady hand at the helm with a plan to keep their jobs safe, business stable, and future bright.
Employee Listening Tour – A listening tour is a set period during which a new executive meets with a significant number of key stakeholders to ask questions, hear concerns, identify obstacles, build rapport, and get a feel for the culture. Ultimately, this is a chance to earn the trust of every employee across the company through transparent, open, and authentic engagements.
Customer Listening Tour – Honoring one’s commitment to customers requires a similar undertaking with a listening tour focusing on what is working, issues they face, dream list of features /improvements they would like to see, acknowledging those requests and quickly demonstrating action against them.
Rapport and Trust Building with Leadership – As with employees, leadership require rapport and trust-building, especially as the incoming CEO transitions in their mind from a stranger (if an external hire) or a core executive (if internal) to the CEO.
Employee Surveys – Creating two-way communication is key to maintaining a finger on the pulse of employees. Surveys are a powerful tool to receive truthful employee feedback (especially if made anonymous), while making employees feel heard and that their voices matter.
Let’s recap
A CEO transition can be the start of a great new chapter or the unraveling of the company
Strategic communications are the spearhead to manage internal and external stakeholder anxiety and stress around the transition
Controlling the narrative and rollout is crucial for a successful transition that mitigates potential negative consequences
The first 90 days are critical for establishing the new operating style and garnering trust for the new CEO with all stakeholders.
Let us know how you get on in the comments, or contact us directly if you’d like further support on this.
Feel free to email us at enquire@revelesco.com at any point.
Ben & the Revelesco team.